London-based Cai Baochun used to make a hefty revenue reselling Hermès’ famed Birkin baggage for more than double their $10,000 retail value. Now he has stopped stockpiling them as second-hand costs fall.
“I don’t want to lose money,” said Cai, who began promoting the baggage on on-line platforms such as Vestiaire Collective and on social media in 2020 and rode a pandemic-era luxurious spending growth.
The resale worth of unworn Birkins bought as second-hand on-line has dropped by more than $6,000 from its 2022 peak, he said.
The decline Birkins bought as second-hand on-line displays a broader shift in the market for one of luxurious’s most unique merchandise whose enchantment and success have been pushed by shortage. REUTERS
The decline displays a broader shift in the market for one of luxurious’s most unique merchandise whose enchantment and success have been pushed by shortage.
Increasing provide of Birkin baggage in the second-hand market is miserable resale premiums, according to resellers, trade consultants and analysts interviewed by Reuters, elevating questions about a technique that helped propel Hermès to become one of the world’s most worthwhile luxurious corporations.
Named after the late British-French actor Jane Birkin, the purse has been central to Hermès’ efficiency. Between 2015 and 2025, group annual gross sales tripled to €16 billion ($18 billion) while its market worth surged. Last yr, Hermès posted an working margin of 41%, above that of rivals including Chanel, Kering-owned Gucci and LVMH’s leather-based and trend division, which consists of Louis Vuitton and Dior.
Named after the late British-French actor Jane Birkin, the purse has been central to Hermès’ efficiency. Birkin in 1967, above. Getty Images
Resale market under strain
All of that was underpinned by an aura of exclusivity.
Six resellers who supply baggage instantly from Hermès consumers said entry to a Birkin is typically linked to spending on Hermès scarves, garments and footwear, although the actual coverage differs between areas and shops. Two estimated prospects usually spend $10,000 to $20,000 before being provided the Birkin or the Kelly, the model’s other common bag.
Hermès, which says a Birkin takes 15 hours to craft, does not disclose its promoting insurance policies or how many baggage it makes. It declined to remark for this story.
Acquiring Birkins is no longer a problem, said Antoinette Hunter, who based luxurious purse reseller Lilac Blue in 2007. REUTERS
Of the 9 Birkin resellers Reuters interviewed in the US, Europe and Asia, six said resale costs had fallen over the previous yr as more purses grew to become out there, while 5 reported softer demand.
Antoinette Hunter, who based luxurious purse reseller Lilac Blue in 2007, said when she got the first request for a Birkin, few individuals knew the bag. She ultimately sourced one from a member of Japan’s royal household.
Acquiring Birkins is no longer a problem, Hunter said, but it’s more durable to make cash from resales. She said the value for an unworn black Birkin 25 bag, one of the most sought-after fashions, has fallen by around £4,000 ($5,336) since 2022, to around £24,000. Cai, who sells via Vestiaire Collective and Instagram, says his value for the bag is around £20,000.
Hermès sells the same mannequin for £9,390 in Britain, a Hermès gross sales assistant in London said.
“I don’t want to lose money,” said Cai aochun, who began promoting the baggage on on-line platforms such as Vestiaire Collective and on social media in 2020 and rode a pandemic-era luxurious spending growth. REUTERS
Although Hunter still sees a lot of demand for Hermès baggage, significantly the most high-end ones, she said the decline in resale costs might dissuade some from shopping for instantly from Hermès.
“If Hermès continues to raise the prices, and the prices on the resale market continue to drop, that margin gets squeezed, and perhaps it will become less appealing,” she said.
Brokerage Bernstein, which tracks particular person public sale outcomes, said in a September notice the resale value on Birkin 25 baggage averaged about 1.7 instances the retail tag in the third quarter, down from about 2.6 instances at their 2022 peak.
Brokerage Bernstein, which tracks particular person public sale outcomes, said in a September notice the resale value on Birkin 25 baggage averaged about 1.7 instances the retail tag in the third quarter, down from about 2.6 instances at their 2022 peak. REUTERS
Business mannequin under scrutiny
Hermès’ leather-based items division, which consists of other purse fashions, generates 44% of annual group income.
For more than a decade, restricted provide and robust demand allowed Birkins to command hefty resale premiums, benefiting both Hermès and resellers as the prospects of making a revenue via the secondary market inspired Hermès shoppers to purchase more from the model.
“It was a win-win,” said Sarah Davis, founder of California-based Fashionphile. The firm said its Birkin listings have grown 32-fold in 15 years. The firm’s web site at the moment lists 212 Birkins on sale.
Hermès has step by step expanded the manufacturing of its handcrafted objects, opening one workshop per yr on common. Meanwhile, the rise of resale platforms such as Vestiaire Collective and The RealReal, alongside classic boutiques with on-line outlets and social media channels, has made it simpler than ever to resell.
For more than a decade, restricted provide and robust demand allowed Birkins to command hefty resale premiums. REUTERS
The baggage and other Hermès objects stay extremely sought after, resellers said, but the model is displaying some pressure.
Hermès’ shares have lost almost 40% of their market worth this yr, making the model one of the worst performers among listed luxurious corporations.
Earlier this month, UBS analysts downgraded Hermès shares to “sell,” saying that rising secondary-market provide of Birkins and Kellys could weaken the model’s scarcity-driven enterprise mannequin.
“We believe the nature of the business is changing,” they said in a notice, estimating that the quantity of the purses listed for sale worldwide is now six to seven instances greater than before the pandemic.
The firm is expected to report quarterly gross sales progress of 5.2% on Thursday, which would mark its weakest quarterly progress in six years, according to Visible Alpha estimates.
Hermès’ shares have lost almost 40% of their market worth this yr, making the model one of the worst performers among listed luxurious corporations. REUTERS
While leather-based items income is still expected to develop by 10%, demand for clothes, silk scarves and perfumes is cooling, a signal fewer prospects are making the purchases historically required to purchase a Birkin at a later stage, two equities analysts and two trade consultants said.
Asked in July whether Hermès should sluggish manufacturing to defend the model, Hermès CEO Axel Dumas advised reporters that some individuals feared making too many baggage would harm its exclusivity, while others questioned why it was not making more.
He added that output depended largely on the quantity of totally educated artisans and out there high-quality leather-based.
Not all resellers see weak spot. Davis said costs for the bag on the Fashionphile platform have remained agency and even risen barely this yr, pointing to renewed consideration generated by Norwegian soccer star Erling Haaland’s purse assortment.
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