Hermès Himalayan Niloticus Birkin, sold at auction by Christie's. Image credit: Christie's
With supply of the iconic Birkin bag by French leather goods maker Hermès dwindling on the resale market, demand only continues to grow.
A new report from handbag consignment platform Baghunter finds a growing gap between demand and supply of Birkin handbags, leading to a "mini-Hermès drought" in the resale market. The booming popularity of Birkins coincides with economic growth in the United States and more visibility as the handbag of choice among celebrities.
"With all indicators showing Hermès have not increased production of the Birkin bag, the value of the Birkin is set to spike soon," said Evelyn Fox, CEO at Baghunter, Beverly Hills.
Birkin boost
Baghunter is one of the largest consigners of Hermès handbags in the U.S.
From January through August 2018, inquires from consigners have dropped 40 percent year-over-year. Inquires to purchase, however, grew by more than 25 percent in the same timeframe.
The most coveted Birkin bags are the smaller ones at size 25, according to Baghunter. Sizes range up to 40 centimeters, while travel sets measure 50 to 55 centimeters.
Selection of Birkin handbags available on Baghunter. Image credit: Baghunter
Public figures including Michelle Obama, Sarah Jessica Parker and Kim Kardashian West have all been seen toting Birkins recently.
In the same time frame, the U.S. economy is growing at a record annual rate of 4.1 percent.
Outside of the resale market, Hermès saw its reoccurring operating profits reach an “all-time high” at 34.5 percent of sales in the first half of 2018.
Hermès saw revenues of 2.8 million euros, or $3.3 million, an 11 percent growth at constant exchange rates and 5 percent at current exchange. The group’s recurring operating income saw 6 percent growth to 985 million euros, or $1 billion at current exchange (see story).
Additional insights
In 2017, a report from Baghunter suggested the Birkin was due for another pricing tweak.
A price increase on the Birkin will keep the handbag's status as a wealth symbol and beneficial financial investment. The expected price hike will come after the Birkin had a record-breaking sales year in 2016 (see story).
Since the release of its 2016 “Birkin Values Study,” Baghunter found that the Hermès Birkin remains on a positive growth trend and has exceeded even the most optimistic expectations in the last 18 months.
Baghunter’s original Birkin Values Study found that purchasing an Hermès Birkin is a sounder investment than both the S&P 500 and gold markets because the handbags’ value has never decreased (see story).