The Hermès Birkin bag has become even more desirable after its price doubled in just five years. James Fierstein, the founder of the luxury resale and authentication platform OpenLuxury, told Fortune that this was the sharpest price increase he had ever seen.
For example, the price of a Black Togo 30 on resale platforms varies widely depending on the condition of the bag, the type of metal hardware, and the year it was purchased from Hermès: from $30,500 for a "like new" bag on Sotheby’s to $10,900 on The RealReal.
"I know several cases where people doubled their money by buying a Birkin 10 years ago and reselling it today in pristine condition," said Fierstein. "The resale value, especially of Birkin and Kelly bags, has outperformed the value of gold over the past 10 years."
In 2020, when the luxury market stalled due to COVID, Birkin bags showed an impressive 38% profit. As a result, according to Fierstein's estimates, 25% of Birkin buyers keep the bags as investments, while the remaining 75% actually use them.
Most buyers turn to the secondary market to purchase Birkin bags because buying a luxury item directly from Hermès can be a cumbersome process that does not guarantee buyers will get the exact style they want.
Hermès allows stores and boutiques around the world to purchase a certain number of Birkin bags per season. However, according to the auction house Sotheby’s, the color and size of the bags are rarely known in advance.
For new Birkin owners who do not yet have a relationship with retailers, it is more difficult to ensure that a salesperson will try to reserve the bag they need, Sotheby’s says. As a result, Birkins are often sold at prices far exceeding their starting price of $12,000.
Prices mainly change due to scarcity. According to Sotheby’s, which sold a Himalaya Birkin 30 encrusted with diamonds for $450,000, common leather models in good condition typically cost $25–30,000.
Meanwhile, Hermès is accused of making it too difficult for the average buyer to purchase their own Birkin model. Two plaintiffs from California alleged in a class-action lawsuit that the French fashion house uses "unfair business practices," including requiring clients to purchase other accompanying goods, such as shoes, scarves, belts, jewelry, and home goods, before being given the opportunity to buy the "coveted, unattainable handbag."
To qualify for the purchase of a Birkin, as alleged in the lawsuit, buyers must have a "sufficient purchase history" with the luxury brand. After that, "clients deemed worthy" are offered a Birkin that is not on public display and is kept in a separate room.
"The unique appeal, incredible demand, and limited supply of Birkin bags give the defendants incredible market power," the lawyers wrote in their statement.
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