Birkin Bags as an Investment

Posted on May 30, 2009

Could your Birkin bag actually be a stylish form of investment? Perhaps this investment angle could be used as an excuse for purchasing more fabulous handbags. An interesting post on the Big Money blog about luxury items as an investment started a string of stories about Victoria Beckham's Birkin bag collection. The blogger at Big Money estimated that Posh's Birkin bag collection could be worth as much as $2 million.

Big Money says in its post (which has since been removed), "Pop icon Victoria 'Posh Spice' Beckam reportedly owns about 100 of them, a collection perhaps worth $2 million. The more basic Birkin bags from Hermes retail for between $6,000 and $7,000 but Forbes listed a crocodile Birkin (with nearly 10 carats of diamonds on the hardware) as being one of the world's most extravagant handbags when it sold for $120,000 at auction house Doyle New York."

It's not clear exactly how much Posh's collection of Birkin bags is worth but it is certainly a big collection that is worth a lot of money. Paparazzi photos have shown her carrying many different Birkin bags including a diamond-encrusted Birkin bag called the Himilayan, which is said to be worth $120,000.

There is a book called Bringing Home The Birkin out by Michael Tonello, who has made money reselling Birkin bags to people who don't want to wait on the Hermes waiting list. The Boston Globe has an interesting story about this Birkin hunter. Tonello tells the Globe, "When I bring a Birkin to an event, women go crazy over it. It gets more attention than a newborn baby."

The Daily Mail discusses the idea of Birkin bags as an investment. The bags actually depreciate in value but much more slowly than many luxury items. Part of the reason the Birkin bags depreciate in value slowly is because of the long wait time at Hermes to get one. Hermes says they are working to reduce the wait time. Hermes told the Daily Mail that the lead time is less if a customer wants a classic Birkin and not a custom bag. Some color options and skins are more limited and require a longer wait time.

Hermes communications director Fiona Rushton tells the Daily Mail, "If someone is looking for a classic Birkin bag - in a regular leather, colour and size - the lead time is significantly lower. It is not and has never been, Hermes intention to create an artificial waiting list. All long lead times experienced by customers are the consequence of capacity limitations or shortage in certain types, sizes or colours of skins."

Hermes also says they have been training more craftsmen over the past few years in an effort to increase production and reduce the lead time for customers wanting a Birkin bag.

The bottom line for investors and Birkin fans is that Birkin bags will retain more of their value than other bags because of the demand, but luxury handbags cannot be considered an investment because they generally decrease in value.

Here's a video from Business Insider about why Birkin bags are so expensive.

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