Better Than Gold? How the Hermès Birkin Became the Smartest Luxury Investment You Can Carry

Gold and Bitcoin prices reached new highs, driven by macroeconomic volatility amid the ongoing US government shutdown, as investors flock to time-tested and alternative asset classes.

However, the founder of luxury resale platform OpenLuxury, James Firestein, believes that the value of Hermès Birkin handbags has continued to defy the rules of fashion economics, outpacing gold over the past 10 years.

Named for the actress Jane Birkin, the Birkin bag showcases a mix of function and glamour. Many buyers view Birkin bags as a worthwhile investment, with nearly a quarter of them purchasing them for storage rather than regular use. The original Birkin was created for Jane Birkin after an encounter with Hermès' Jean-Louis Dumas on a flight in the early 1980s, during which she expressed that she could not find a bag that suited her needs. Jane reportedly sketched her design on a bag, and Dumas infused the bag with equestrian elements.

Her extended use of that bag only added to its allure, helping it fetch a record $10.1 million (£7.5 million) at auction last summer.

'It's similar to buying a Piccaso and holding it in your home, because you can look at it, you can enjoy it,' Firestein said. 'But then you ship it off in a couple of years and trade it for something else.'

He believes the value of these bags can surge considerably over time, depending on colour, material, and condition. Furthermore, the demand for secondhand Birkin bags is very high in part because the resale market offers buyers more options than the Hermès store. Generally, shoppers are allowed one quota bag per year in Hermès stores and barely get to select the model they want.

Birkin bags have joined the ranks of gold, art, and real estate as a store of value. 'It's something that doesn't lose its value the way most fashion items do. Like driving a new car off the lot and instantly losing half its value. It's more like real estate or gold in that sense, and I think that right now people are interested in hard goods as investments," said Marisa Meltzer, author of the new book 'It Girl: The Life and Legacy of Jane Birkin.'

'There's this mystique to Hermès,' said Meltzer, adding that the process of buying one of these handbags is 'deliberately confusing and mysterious.'

'There are no easy shortcuts, she added. 'People can try to buy a bag online that looks like a Birkin, or choose another designer's version that seems suspiciously similar, but there's no real substitute for the real thing.'

According to Rebag, the average Togo Birkin bag retail price rose 36% from 2009 to 2019. For instance, the retail price of a 25 cm Togo Birkin increased by 46% during that period, while the price of a 40 cm Togo Birkin rose by 34%.

Interestingly, between 2019 and 2020, the price of a 25 cm Birkin Togo Palladium increased by 14%, while the 30 cm Birkin Togo Gold bag surged in value by 13%.

Disclaimer: Our digital media content is for informational purposes only and not investment advice. Please conduct your own analysis or seek professional advice before investing. Remember, investments are subject to market risks and past performance doesn't indicate future returns.