The Times Newspaper: The investment that outstrips gold: a Hermès Birkin handbag

The Times

4th March 2020

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It may seem like misguided decadence to splash cash on a designer handbag but it could prove to be a better investment than the stock market or gold.

While the FTSE 100 index gained 12% last year, Hermès Birkin handbags increased in value by 13%, outperforming other collecatble items such as fine wine, art, watches, jewellery or whisky.

Birkin bags are so popular at auctions that an index has been created by Art Market Research to track their growing value.  Over the past ten years the FTSE 100 and gold, often regarded as a safe haven for wealth, both increased by 39% while Birkin bags grew in value by 108%, according to the Wealth Report published by Knight Frank.

The annual report on the status of the world’s wealthy, shows that last year there were 14,367 people worth $30 million (£23 million) or more living in Britain and 71 billionaires, which is expected to grow to 18,818 and 96 respectively by 2024.  The investment plans of the world’s wealthy include an average of 5% of their money in collectables such as handbags, wine and art.

The majority of their investment portfolios, 27%, was invested in residential and commercial property, while 23% was in stock market shares, 17% in bonds and 11% in cash.  Only 3% was in gold and 1% in cryptocurrencies.

A Birkin bag made of crocodile skin with gold and diamonds is the most expensive handbag auctioned to date. It was sold by Christie’s in 2017 for almost HK$3 million, nearly £300,000 at the present exchange rate.  The bags can be worth as little as a tenth of the price if they are scuffed or scratched. The only person who has got away with mistreating theirs was Jane Birkin. The actress sold one of her battered bags complete with stickers and tied on worry beads for £100,100 on eBay for charity in 2011. Her namesake bag was created after she sat next to Jean-Louis Dumas, chairman of Hermès, on a flight in 1984 and told him that she couldn’t find a shopping bag big enough to carry her daughter’s bottles.

Rachel Koffsky, head of sales for Christie’s handbag department, said that the price of the bags, from £12,000, was justified: “The Birkin is made by hand in an atelier and can take up to 40 hours using a double-needle saddle stitch that cannot be replicated by a machine.”

Article by Carol Lewis, The Times
Photo by Rebecca Naden

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