From today's Wall Street Journal

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    Is an Hermès Birkin a handbag or an investment? A rare fire-engine-red Birkin has sold for $298,000, topping the previous price paid for a resold Birkin. WSJ's Christina Binkley joins Tanya Rivero with exclusive details. Photo: Prive' Porter

    By CHRISTINA BINKLEY
    April 13, 2016 6:55 p.m. ET
    0 COMMENTS
    A rare Hermès Birkin handbag with diamonds on its hardware has sold for $298,000, breaking the previous record for a resold handbag of $222,000.

    The bag features 18K white gold and diamond hardware. ENLARGE
    The bag features 18K white gold and diamond hardware. PHOTO: PRIVÉ PORTER
    Never used, the crocodile bag, in a fire-engine color that Hermès calls “braise,” had been kept in store-bought condition by two former owners, each of whom bought it with profit in mind.

    This raises an interesting question. Is the Birkin a handbag or an investment? Most handbags are like cars: They devalue rapidly once purchased. Birkins, and some other Hermès bags, like the Kelly, can be the rare exception if they’re well-maintained; the previous record-breaking bag was also a Birkin.

    ROAD TO A RECORD

    1. A rare Hermès 35cm Birkin shiny porosus crocodile bag in a fire-engine red called ‘braise’ is manufactured in France in 2008. Its hardware features 10.08 carats of round brilliant-cut diamonds in 171 grams of 18K white gold.
    2. The bag is sold at a Hermès store in New York City in 2008 to a private American collector for $160,000.
    3. Jeffrey Berk acquires the never-carried bag in May 2015 from that customer in ‘store fresh’ condition. He sets the sale price at $360,000.
    4. In September 2015, the bag is shown by appointment aboard a yacht during the Fort Lauderdale International Boat Show.
    5. After two earlier deals fall through, the bag sells in March 2016 for $298,000, beating the former record of $222,000, set at a Christie’s auction in June 2015. (The Christie’s price also included commissions to the auction house.)
    6. A few days later, the Birkin is delivered by Brinks armored air transport to a Los Angeles buyer’s representative, who describes his client as an American billionaire.
    The bag was an investment for Jeffrey Berk, the founder of Boca Raton, Fla.-based reseller Privé Porter. He sold it via a personal representative of the buyer and says he doesn’t know who the buyer is. “Will it go into that warehouse full of crates like in Indiana Jones? I don’t know,” says Mr. Berk.

    In 2008, the bag was sold for $160,000 at an Hermès boutique in New York City, according to the original sales receipt. The dealer declines to say how much he paid for the bag, arguing that Christie’s didn’t divulge the profit of the previous record-breaker.

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    A reseller specializing in Hermès handbags, Privé Porter is on track to sell $24 million of the purses this year, Mr. Berk says. About 90% of his inventory is sold via Instagram, and 60% goes to Asian and Middle Eastern customers.

    There is a reason he deals almost exclusively in Hermès. It is the brand most likely to command investment-worthy obsessions. In his experience, “no one is kicking down the door for Chanel,” Mr. Berk says.
     
    Jeffrey Berk likes this.
  2. Wow!
     
  3. Last time I asked here on tpf if you want a diamond croc Birkin you can get it from the boutique. If they think you can pay for it they will sell it to you. I don't get why someone would pay that much over for a type of Birkin you can get fairly easily. Even I have been offered a croc one without really trying. It's a different story that I cannot afford one!
     
  4. #4 Apr 14, 2016
    Last edited: Apr 14, 2016
    You have to be careful about auctions. first, the auction price they say often includes the 25% commission of the auction house that the buyer has to pay. So in reality the hammer price is US$238,400. then you have to subtract out the commission fee the auction charges the seller plus the insurance which for something like a handbag is probably around 15%. then it means the seller gets back US$207,300...and if the boutique held it since 2008, that is a 7-8yrs with only a US$40,000 profit. This is not good in business sense since the boutique had160k held up for 7-8yrs. Meaning each year only earned 5k for 160k. That is not very good at all...
     
  5. The real winner is the auction house. They make a revenue of almost 90k on that bag. So it is in their interest to highlight that ONE bag that hits a high mark. Many bags don't even break even for the seller --back and forth the real money the seller gets is about 40-45% lower than final auction price listed.

    Anyway, auction houses will always advertise and want publicity for that ONE high ticket item. It is so irresponsible of WSJ to even say a bag is an investment. It is like cars, 99.9% are not investments and for that 0.1% of cars that might appreciate, you really need to be financially already very very wealthy to take that risk.
     
  6. The real winners are the auction house and Hermes. This kind of hype is priceless for the brand.
     
  7. This seems like such a waste. These bags aren't really that beautiful on their own like a painting or other fine art; I feel like if nobody carries it it's really pointless.
     
    autumnandwinter likes this.
  8. :yes:

    Also, add insurance for 8 years

    Plus you can't use it since it must be 'mint' or 'pristine'

    I've got a better mark-up on my vintage non-H bag and had fun using them
     
    dharma likes this.
  9. :tup:
     
  10. I remember when prive porter posted a picture of that red birkin with the price at $500K if I remember it correctly. Everyone scoffed and criticized and ridiculed the heck out of it, prompting prive porter to delete the post.
     
  11. #11 Apr 14, 2016
    Last edited: Apr 14, 2016
    To me it's not even about the price per se. After you taking off the commissions etc, it was sold less than the store price from a sellers perspective, yet the buyer paid more than the store price because of the same said commission.

    The point is if you want a bag like that, contact any Hermes store and they will be more than happy to order you one. Granted that you have to wait for it but you get to choose whatever the heck specs you want. Why buy from an auction house?

    Too right only auction house and Hermes benefit from this.
     
  12. :tup::tup:
     
  13. I think they actually started it at a million!

    Luxury accessories won't be in play in this market until/unless there are enough people who value the truly rare and unusual - it's easy enough to appreciate a red croc Birkin with diamonds while knowing zero about Hermès - but the history and craftsmanship of, say, a Barenia sellier Kelly or a vintage Passe-Guide doesn't command a premium per se.

    It makes great media, though, because most readers can't imagine that there are bags actually retailing above $200K, so it sounds like a great sale.
     
  14. this actually makes me wonder..
    along with those "personal shoppers"
    why do people pay a mark-up esp. socialite..
     
  15. Indeed, we deleted it because this is the $500,000 one: https://www.purseblog.com/exclusive/hermes-gris-cendre-diamond-himalaya-crocodile-birkin/
     
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