How much is your collection worth? Do you keep a running tab? Are you worried about its value?
So many of you (us) justify our Hermès (and other luxury) bag purchases with the belief that our collections retain value… that should we need to liquidate, we can cash out for significant sums. With Hermès, many have experienced an increase in worth; that is, being able to sell a used Birkin or Kelly for more than was paid.
There are plenty of reasons you may need to put a number on your bags – to buy or collect on insurance, asset division in a divorce, divestment and more. In that light, perhaps you should consider the brand strategy. Or maybe a bag is just a bag.
This is serious business, this business of bags… especially Hermès bags. For those of you racking up the B’s and K’s it really matters what the Hermès strategies for expansion are… you have 4-5 bags you say? We are talking 50-60K, 10-12?… then we are looking at 150K… 10-12 exotics?… then we are talking half a million dollars invested in Birkins and Kellys.
You may be wondering what this has to do with the Hermès sales but, as we ponder in our piece, if Hermès becomes less exclusive and more attainable, the value of what you own may drop as well. In very simple economic terms, when supply exceeds demand, prices should decline. Conversely, and as has historically been the case with Birkins and Kellys, if demand is greater than the supply, prices should rise. For these bags, unmet demand also created and sustained a secondary or resale market to which luxury consumers could turn to attain an otherwise unobtainable purse.
Although getting your first Birkin or Kelly from an Hermès store remains difficult, long-time established customers report that they find the supply of bags more plentiful than ever. Hermès’s increase in production facilities has, of course, increased production of the bags. These devotees now post multiple acquisitions and marvel that they’ve rejected bags only to be offered yet another. One thing is clear – the number of Birkins and Kellys in the original market has increased. A recent Bloomberg article quotes the Hermès President and says “increased production is a key aim for Hermès as it seeks to reduce waiting lists for its signature handbags.”
If you can bag it at the Hermès store, there seems little reason to go to a reseller – unless it’s an unusual and rare fabrication. If fewer people are interested in buying, price should go down. Good news for resale buyers; not so good for resale sellers. In other words, you may not be able to sell your bag for what you want, when you want.
Something to consider, isn’t it?
We’ve loved your hearty and honest comments (literally hundreds of you taking the time to write well thought out replies) in response to the latest discussions. In case you are just joining in, we highly urge you to see what our community is saying… peruse replies for Question #1 and Question #2.
And now Question #3: Are you worried about the value of your collection in light of the increased production and availability?