Hermes Birkin handbags, the study by Baghunter shows, offer an average annual increase in value of 14.2%.
News.com.au reported in March that someone bought a 2014 Himalaya Birkin handbag by Hermes for A$496,000 (RM1.5 million) at a Christie’s auction. The handbag was crafted from Nilo crocodile hide, an albino crocodile specifically bred by Hermes, and finished with 18-carat white gold and diamond detail.
The report said that for the same price one could buy a two bedroom/two bathroom apartment in the centre of Brisbane.
So, it is not just a status symbol for the rich and famous, which could explain why some women buy lots of Hermes Birkin handbags like those seized by police here.
The police yesterday confiscated 284 handbags, including Hermes Birkins, in an operation at three luxury apartments in Bukit Bintang as part of investigations linked to 1MDB. They also seized 72 luggage bags containing cash and jewellery.
There have been reports that Rosmah Mansor, the wife of former prime minister Najib Razak, has a collection of Birkins. She has been photographed carrying various Hermes Birkins over the years.
Baghunter reported in 2016 that it compared three different types of investments – the Standard and Poor’s (S&P) 500, gold, and Hermes Birkin bags.
These three investments were chosen as they represented distinct and popular forms of investments.
Baghunter said the S&P 500 represented the overall return characteristics of the stock market as a whole, gold was the most popular commodity for investors, and Hermes Birkin bags were a collectible and tangible investment.
It checked the figures over 35 years, from the time production of Hermes Birkin bags began.
“Between 1980 and 2015, the S&P 500 has returned a nominal average of 11.66%, which equates to a real return average of 8.65%. However, these averages do not take into consideration the fluctuation of the markets during this period and assume the investor has chosen to neither buy nor sell for 35 years. For instance, the S&P 500 annual returns peaked during this period in 1995 at 37.20%, but also reached an average low of -36.55% in 2008.”
During the same period, gold offered an average annual return of 1.9%, equal to a real return average of -1.5%.
Once again, Baghunter said, the averages did not take into account the fluctuation of the price of gold during this period. It also assumed investors had chosen to stick rather than buy or sell during this period. For instance, gold reached a peak average price during this period in 2011 at US$1,571.52, but also reached an average low of US$271.04 in 2001.
“In the same time frame, Hermes Birkin handbags have increased in value year on year, offering an average annual increase in value of 14.2%.
“However, unlike the S&P 500 and gold markets, the value of Hermes Birkin handbags has never fluctuated downwards and has steadily and consistently increased. The bags experienced a peak surge in value in 2001, increasing in value by 25%, and with the lowest increase in 1986 when the value went up by 2.1%.”
Baghunter said that in 2016, the safest and least volatile investment market was the Hermes Birkin handbag.
Baghunter noted that S&P 500 stocks and gold were subject to both positive and negative fluctuations but that Hermes Birkin handbags had only experienced various levels of positive fluctuation since their introduction 35 years ago.
This also demonstrated the risk involved in investing in the S&P 500 and gold markets, it said, adding: “On the other hand, an investor who purchased a Hermes Birkin handbag would enjoy a profitable return regardless of when they decided to cash in as the value has only risen since 1980. This makes Hermes Birkin handbags by far the least risky investment of the three. While economic factors affect the value of the S&P 500 and gold, the exclusivity of Hermes Birkin bags has seen them maintain and increase their value, even during times of recession.”
According to the Baghunter report, the waiting list implemented by Hermes for a Birkin bag was sometimes as long as six years. This has also contributed to driving the resale value of Birkin bags upwards “with bags regularly selling on the secondary market for more than their original price”.
“As a status symbol for the elite and ultra-rich, the main factor affecting the secondary market for Birkins is desire. All signs point to that desire remaining as strong throughout 2016 as it has been since the bag was released in 1985, with media outlets fawning over celebrities such as Kim Kardashian and Victoria Beckham who regularly sport their Birkin bags in paparazzi pictures.”
According to a 2015 report in Fortune, the cost of new Birkins range from US$12,000 to more than US$200,000, and they regularly sell on the secondary market for more than their original sales price.
Purseblog, which claims to offer the international Hermès Birkin price guide, says a 25cm handbag costs US$9,400 (both Clemence and Togo leather) and US$9,250 (Epsom leather). The 30cm handbag costs US$10,900 (Clemence and Togo) and US$10,800 (Epsom) and the 40cm handbag costs US$13,200 (Clemence and Togo) and US12,900 (Epsom).