- Pandemic fails to slow luxury spending as the rich shop online or buy through personal shoppers based in Paris and London.
- The lockdown sparked a buying frenzy of Hermés designer bags, pushing prices and scarcity to a new high.
- The high demand for the Birkin bag by French luxury house Hermés, according to Knight Frank Luxury Investment Index, pushed prices up by 17 percent.
The Hermés bag is now the most desirable thing that the wealthiest people in the world are investing in.
The luxury industry may have been hit by few people travelling abroad, and lockdowns keeping many away from shopping malls, but the super-rich kept themselves busy on online stores and WhatsApp calls with international personal shoppers.
The high demand for the Birkin bag by French luxury house Hermés, according to Knight Frank Luxury Investment Index, pushed prices up by 17 percent.
But what is this Birkin bag? Why is it so famous? Why is it so hard to buy? What makes it expensive? Who buys these bags? And, why are there so many counterfeits in Kenya and the world? Why did its sales and demand increase during Covid-19? Is it a good investment option as a collectible?
Starting price of the bag is at least $10,000 (Sh1 million) and it can go beyond $300,000 (Sh32.9 million) depending on the material used (crocodile, lamb, ostrich, lizard, and alligator), the hardware (gold or palladium) and also the additional items such as diamonds.
In Africa, a lot of Birkin bag owners are from Cote d'Ivoire, Nigeria, the Democratic Republic of Congo, and South Africa.
“I purchase Birkin bags for a lot of female private clients in Africa. During Covid, as it was difficult to travel, the demand for the bags increased and I made sales through my WhatsApp,” says Rosemary Ewané, a personal shopper based in London.
“Most of my clients come from Nigeria, Cote d'Ivoire, and DRC. They bought the bags measuring 25 centimetres (cm) and 30cm, mostly made from lambskin, and retailing from $17,600 (Sh1.9 million) each. I also had two orders for Birkin bags made from crocodile skin. One bag cost $65,000 (Sh7.1 million) and the second bag cost $75, 000 (Sh8.2 million),” she said.
Several wealthy buyers also bought from auction houses such as Christie’s which sold an extremely rare Hermès Diamond Himalaya Birkin measuring 25 centimetres for Sh32.9 million during the first online only auction.
Production of Birkin bags is highly controlled that you cannot walk into a Hermés boutique and walk out with one, unless you have a history of high spending with the company. The bags are never advertised to maintain their scarcity. This has led to a crazy demand for the bags. If you see many Birkin bags in Nairobi or many other countries, many of them are often fake bags.
Femi Young, the founder of Swan Maison Concierge in Paris, France, who shops for the super-rich all over the world says most of her African clients live in South Africa, Kenya, Nigeria, Cote d'Ivoire, and Congo.
“During Covid especially after July, we had a large demand for Hermés bags especially the Birkin bags. As we have very good connections with resale companies globally and the Hermés boutiques, we have been able to source several bags,” says Femi.
Most clients from Gabon, Nigeria, DRC, and South Africa spent $18,000 to $60,000 (Sh1.97 million to Sh6.5 million) on a Birkin bag.
“The cost depends on various factors such as rarity and the leather used. The African clients buy the bags for collection, non-investment purposes,” Femi adds.
With a new emphasis on home working, there was a surge in demand from collectors sprucing up their wardrobes and themselves.
One collector of the bags explained her love for the bags.
“I have been buying the bags for five years and I have 12 of them in different sizes and colours. The cheapest cost $12,000 (Sh1.3 million). It is a maroon lambskin Birkin bag measuring 30 centimetres. I bought it in Italy. I bought three more bags during Covid-19. My most expensive bag is in Ostrich skin and gold hardware at 30cm. It cost $39,900 (Sh4.3 million). I bought it through a personal shopper in Paris. I collect for pleasure and now I am searching for a crocodile skin bag,” says Yvette Evariste, from Senegal.
The steady value growth for Birkin bags is certainly a contributing factor in the high price. Since the launch of the Birkin bag, the price has risen by an average of 14.2 percent every year, outperforming traditional investments such as the S&P 500 and gold markets
Andrew Shirley, editor of The Wealth Report at Knight Frank said, “The market for luxury collectibles, which relies on the auction market for much of its profile, is badly affected by the Covid-19 pandemic. But some sectors like handbags are weathering the storm better than higher-value assets like the top end of the art market where no painting sold for over $100 million for the first time in several years.”
The few people who own Birkin bags include Floyd Mayweather, a former professional boxer being, who has a collection.
Mayweather has in crocodile skin, ranging from Sh13 million Birkin in limited edition white crocodile leather, one in black crocodile leather for at least Sh3.8 million, another in red crocodile and a fourth in ostrich leather, each retailing at the same amount.
Drake, an American rapper has a collection of Birkin bags which he will give to his future wife. His collection including the Hermès Himalaya Birkin amounts to Sh41.9 million. It has 8-karat white gold hardware and more than 200 diamonds.
The largest collection of Birkin bags belongs to a Singaporean socialite Jamie Chua who owns more than 200 bags that are kept in a large safe that cost more than $150,000 (Sh16.4 million) to build to guard all her bags.
Ms Maina is a luxury advisor and expert in Paris, France.