The development of the resale market

Over the past few decades, the luxury handbag market has experienced significant growth, with top brands developing their reputations for exceptional style and craftsmanship. Hermès bags are no exception. For example, their Birkin and Kelly bags are widely recognised as making a statement while also serving a practical purpose – but they are also highly regarded as investment pieces. That’s because the Hermès collection of bags is timeless and will always remain in style, despite high price tags that can reach up to six figures. The brand’s distinguished reputation, hard-earned over many years, remains undiminished. However, the rise of the resale market means that more people have the opportunity to invest in a pre-loved Hermès bag.

Hermès – the latest luxury brand to hit the €200 billion mark

This year Hermès International, the French luxury fashion conglomerate, is just one of several European corporations that has benefited from the surge in interest in luxury investments. In fact, Hermès has become the eighth most valuable firm in the pan-European Stoxx 600 index, having surpassed €200 billion in market value for the first time.

This means that the manufacturer, best known for its iconic classic bags, outperformed several other prominent French trendsetters including big names like Airbus and Renault. While Hermès enjoys a reputation for being one of the most exclusive brands in the luxury industry, the Dumas family, which controls the company and is the major shareholder, has taken a conservative approach to managing the company’s expansion. This has helped determine the direction of the Hermès bag market.

Auction prices are trending higher

When it comes to Hermès Kelly bags, the most significant price hikes are for the Kelly 28. The Kelly 28 Retourne bag, for instance, has seen auction prices grow by 18% on average. Auction prices for Birkin 35 bags in leather (the best-selling handbags of any size), crocodile, alligator, and ostrich have all increased so far in 2023 too. While the prices for larger Birkin and Hermès Kelly bags are expected to remain stable, every serious collector is thinking about the extremely rare VIP Birkin Sac Faubourg 20.

Key factors that set the Hermès strategy apart

•         Hermès has consistently prioritised the quality and exclusivity of its leather goods. In contrast to its competitors, the brand places a strong emphasis on top-quality leather products, opting to steer clear of cheaper canvas lines that many of its rivals have embraced.
•         Hermès is dedicated to preserving traditional manufacturing methods and rejects assembly-line production, emphasising the value of handmade craftsmanship. The leather workers at Hermès maintain the tradition of hand-stitching bags, resulting in a product that is renowned for its exceptional quality.
•         Unlike other luxury brands that rely heavily on celebrity endorsements and digital influencers, Hermès has chosen a more subtle approach by cultivating a deliberately understated image. Instead of seeking external promotion, Hermès relies on its loyal customers to spread positive word-of-mouth.
•         Perhaps most importantly, in contrast with the rigidly centralised approach typically seen in the luxury market, Hermès empowers store managers and sales associates with substantial control over sales.

Which Hermès bag should I buy?

Whether you are new to Hermès or a seasoned collector, the bag you select should be a reflection of your personal character and preferences. However, when substantiating the value of Hermès handbags, certain collections and models are worth considering more than others. Some Birkin styles – for example, the Himalayan Birkin which combines the sought-after design with the use of extremely rare and high-priced material from the Nile crocodile – attract more attention due to their investment potential and value. The Hermès Kelly is another. Due to its intricate hardware, detailing, and high-quality materials, it holds greater financial value in comparison with other handbags.

The Hermès bag as an investment

Contrary to what some believe, the handbag industry operates on the same basic principle as any other market: supply and demand. Items that are hard to come by are considered more exclusive and thus valuable. This is why collectors are drawn to pre-owned Hermès Birkins and Kellys, especially those in rare or discontinued colours or leathers, and particularly so if the bag is in immaculate condition. A flawless Hermès bag will be sure to hold its value for many years.