Why doesn't Hermes fine jewelry hold its value?

[QuelleFromage]

This topic reminds me a lot of the thread about Hermes watches depreciating. I agree with everything said above. Yet, I do not fully understand why depreciation is seen as out of the ordinary? RTW depreciates, watches depreciate, homeware depreciates, and even most bags depreciate.

For example, a Bolide 31 sells for just about 50% or less of its msrp. This belief that everything Hermes ought to appreciate in value or at least not lose any value is quite a novel concept for me. Especially, the fine jewelry depreciates a lot due to how inflated the prices have become. This is true for all brands, but alas Hermes is not seen as a jeweler. Now, I have bought many pieces including some recent high jewelry at retail, and never do I expect them to become pseudo financial investments. Most Hermes jewelry is not limited and will continue to be made for a while (likely undergoing significant price increases), so scarcity really is not at play. I see their jewelry and all pieces as investment in having something nice to wear that I fell in love with.

My (very) unpopular opinion on the subject of this is that a bundle of goods (quota bag + fine jewelry) at retail or second hand totals just about the same. The huge discount one gets on fine jewelry can easily hedge the resale price of a quota bag.

I do agree that all this "doesn't hold its value" stuff seems off-base. Want something to hold value? Buy a value stock.

Most fine jewelry does not hold value. Even Cartier outside the Love and the Juste un Clou loses a ton of value as soon as you buy it (and even those iconic pieces do depreciate from new retail). VCA loses as soon as you leave the store, unless it's super rare. Graff (which I think is so well made) doesn't hold value.

Somewhere along the line, someone did a great job of changing the concept of "investment dressing" (you "invest" in a piece that will reward you not with a value increase but in a lasting, wearable choice) to folks actually believing that bags, jewelry, and even to some extent clothing should somehow appreciate. Maybe it was that stupid chart about Birkins appreciating faster than gold? I'd say that was faulty economics, but it wasn't even economics at all.

ETA: As far as H jewelry specifically not retaining value, look at the resale on Cartier handbags.....

 

[WhiteBus]

Right??? So that begs the question….what should I get for prespend??

nothing

admittedly some items seem to count more
you and your attitude is what really swings the balance

 

[WhiteBus]

I do agree that all this "doesn't hold its value" stuff seems off-base. Want something to hold value? Buy a value stock.

Most fine jewelry does not hold value. Even Cartier outside the Love and the Juste un Clou loses a ton of value as soon as you buy it (and even those iconic pieces do depreciate from new retail). VCA loses as soon as you leave the store, unless it's super rare. Graff (which I think is so well made) doesn't hold value.

Somewhere along the line, someone did a great job of changing the concept of "investment dressing" (you "invest" in a piece that will reward you not with a value increase but in a lasting, wearable choice) to folks actually believing that bags, jewelry, and even to some extent clothing should somehow appreciate. Maybe it was that stupid chart about Birkins appreciating faster than gold? I'd say that was faulty economics, but it wasn't even economics at all.

ETA: As far as H jewelry specifically not retaining value, look at the resale on Cartier handbags.....

I so agree with your definition of investment vis a vis clothing.

 

[Suncatcher]

Consumption goods are not investment. As someone said buy a value stock or a GIC if you want appreciation. If you are only looking to buy other Hermes items for pre spend purposes (that you then offload) to buy a birkin you are better off buying a birkin in the second hand market where there is no prespend.

 

[addiCCted]

Nothing then if you're going by this logic. The only items that yugenerally hold value are the items that don't count

I don’t think I would be as bothered by the loss of value (as most retail items lose their value ) if they weren’t so readily available for sale second hand. Its just shocking to me that the scarves, coffee mugs and shoes hold pretty close to retail value (at least they are listed as such, what they actually go for who knows..) while its such a shave on fine jewelry. I guess demand is just not there, which is better for me....

What is weird is somehow it doesn't bother me that RTW loses significant value. Logic need not apply here.

 

[addiCCted]

Consumption goods are not investment. As someone said buy a value stock or a GIC if you want appreciation. If you are only looking to buy other Hermes items for pre spend purposes (that you then offload) to buy a birkin you are better off buying a birkin in the second hand market where there is no prespend.

I agree with all that. I never understood when people say handbags are investments.

 

[addiCCted]

I do agree that all this "doesn't hold its value" stuff seems off-base. Want something to hold value? Buy a value stock.

Most fine jewelry does not hold value. Even Cartier outside the Love and the Juste un Clou loses a ton of value as soon as you buy it (and even those iconic pieces do depreciate from new retail). VCA loses as soon as you leave the store, unless it's super rare. Graff (which I think is so well made) doesn't hold value.

Somewhere along the line, someone did a great job of changing the concept of "investment dressing" (you "invest" in a piece that will reward you not with a value increase but in a lasting, wearable choice) to folks actually believing that bags, jewelry, and even to some extent clothing should somehow appreciate. Maybe it was that stupid chart about Birkins appreciating faster than gold? I'd say that was faulty economics, but it wasn't even economics at all.

ETA: As far as H jewelry specifically not retaining value, look at the resale on Cartier handbags.....

I wonder when Cartier will make you buy their bag before they sell you their jewelry.

I should have just did one post to reply to everyone...but alas here we are three posts deep...Sorry everyone. I will stop now...

 

[caruava]

Want something to hold value? Only buy what you love.

 

[SDC2003]

Want something to hold value? Only buy what you love.

Agree - It won’t hold value in terms of cost but it holds value in the eye of the owner. I sometimes see my rings for sale in these fb groups and while annoying it doesn’t make me think any less of my rings because I love them. But this is easy to say for low dollar value items. Now if I owned and saw a full pave kelly or h d’Ancre bangle listed at a fraction of their value I’d be annoyed - not because I didn’t like the item but because I should have bought it through fp or rr and saved myself a boatload. Recently I saw that fp has these bangles which retail over 44k for a mere 15-16k. I am guessing whoever sold these took a mighty hit and maybe even fp. I don’t recall the jewelry going so low before. Right now it’s priced just a touch more than the semi pave Kelly bangle.

The only other thing I’ll add is that I am frustrated at the brand for its price increases over the last couple years. I understand some of it may be due to rising costs but I have a suspicion it also has to do with their knowledge that clients buy the jewelry for bag offers. Whether they’re encouraging or deterring I don’t know. I had been wanting to add a couple small pave pieces but the prices are so crazy now I just can’t bring myself to pull the trigger for new and from the boutique.

 

[addiCCted]

Agree - It won’t hold value in terms of cost but it holds value in the eye of the owner. I sometimes see my rings for sale in these fb groups and while annoying it doesn’t make me think any less of my rings because I love them. But this is easy to say for low dollar value items. Now if I owned and saw a full pave kelly or h d’Ancre bangle listed at a fraction of their value I’d be annoyed - not because I didn’t like the item but because I should have bought it through fp or rr and saved myself a boatload. Recently I saw that fp has these bangles which retail over 44k for a mere 15-16k. I am guessing whoever sold these took a mighty hit and maybe even fp. I don’t recall the jewelry going so low before. Right now it’s priced just a touch more than the semi pave Kelly bangle.

The only other thing I’ll add is that I am frustrated at the brand for its price increases over the last couple years. I understand some of it may be due to rising costs but I have a suspicion it also has to do with their knowledge that clients buy the jewelry for bag offers. Whether they’re encouraging or deterring I don’t know. I had been wanting to add a couple small pave pieces but the prices are so crazy now I just can’t bring myself to pull the trigger for new and from the boutique.

My sentiments exactly. BTW.... I don't understand who is buying 40k+ jewelry just to get 10k back? I feel that if you're able to spend at that level already, who cares about that 10k, just keep the bangle?

 

[EmilyM11]

Somewhere along the line, someone did a great job of changing the concept of "investment dressing" (you "invest" in a piece that will reward you not with a value increase but in a lasting, wearable choice) to folks actually believing that bags, jewelry, and even to some extent clothing should somehow appreciate. Maybe it was that stupid chart about Birkins appreciating faster than gold? I'd say that was faulty economics, but it wasn't even economics at all.

THIS! And that's one of the reasons for that insane demand for H (or Chanel) bags. I witnessed that people who actually are not in position to buy and just use such bag buy regardless and anticipate to wear it a bit and then sell at least at the purchase price or more. Sorry for off topic but you just verbalised what I thought (actually many of us).

 

[papertiger]

I agree with your disagree haha. I meant that it is a sad story that people are buying the FJ the way they are, i'm definitely not supportive of that haha.

I buy those that appeal to me from the stores too, whilst resisting to check what prices they sell for second hand. Out of sight, out of mind! Also because i prefer the whole store experience and my jewelry brand new!

We are agreeing then I have bought pre-loved and antique jewellery and inherited some too. BUT, Jewellery has to very special and/or meaningful or there's no point. Some of H's jewellery can be cost effective (CPW). It has to actually be worn for CPW to work though.

The point of new jewellery is contemporary styling (in-between finger or kinetic rings, mis-matched earrings etc) or superior design. I love Pierre Hardy designs - I wish I'd splashed out more on a Large gold Gallop (I bought it in silver).

I don't understand the idea of buying at top price (retail) and then expect profit/break-even. We have to forgive ourselves for not 'winning' on everything we do. Shopping is not gambling.

Holidays, food, trips around town? Club subscriptions? Money down the drain? Just enjoying 'stuff' is just another pastime. If someone flips something and makes a profit, they're probably going to lose on the next item.

Why are we all suddenly supposed to be dealers? Most of us are consumers.

 

[AnnaE]

I think Hermes jewelry, especially the pavé pieces, are overpriced for what they are. So are the other well-known brands. Why the hell is a VCA pendant made with little gold and with the tiniest bit of mother of pearl almost $3k?!

The issue with precious metal jewelry is that it has inherent value, so we tend to think it has some resell value. When I buy a scarf, it doesn’t have much inherent value other than keeping me warm. I can’t exactly recycle the silk into another fancy scarf. Same with a bag — I can’t sell the leather to make money. With jewelry, theoretically, there is some inherent bullion / stone value. The issue is that the gap between the inherent label and the price tag is very high. I once did the math of the cost of silver in some of my Hermes pieces and the markup was at least 10x (possibly more). I still buy the Hermes pieces I love, but I think of it as buying a scarf or another accessory — no hopes it will appreciate. It’s just there for me to enjoy.

The truth is, no one should be buying jewelry as an investment. Buy the bullion instead. Or at least the 22-24k gold jewelry more common in some Asian countries and the Middle East. Jewelry is way too fragile and easy to lose for an investment. Just buy what you love and don’t worry about perceived value.

 

[DeepSubmerge]

I do agree that all this "doesn't hold its value" stuff seems off-base. Want something to hold value? Buy a value stock.

Most fine jewelry does not hold value. Even Cartier outside the Love and the Juste un Clou loses a ton of value as soon as you buy it (and even those iconic pieces do depreciate from new retail). VCA loses as soon as you leave the store, unless it's super rare. Graff (which I think is so well made) doesn't hold value.

Somewhere along the line, someone did a great job of changing the concept of "investment dressing" (you "invest" in a piece that will reward you not with a value increase but in a lasting, wearable choice) to folks actually believing that bags, jewelry, and even to some extent clothing should somehow appreciate. Maybe it was that stupid chart about Birkins appreciating faster than gold? I'd say that was faulty economics, but it wasn't even economics at all.

ETA: As far as H jewelry specifically not retaining value, look at the resale on Cartier handbags.....

All you ladies out here make a wonderful point! I actually joined TPF to get jewelry buying tips. I'm a young professional looking into "investment" pieces and honestly had a financial perspective of it. All your inputs have dissuaded me from that. And yes that Birkin and gold chart....

 

[A.Ali]

I wouldn't mind some H furniture at half off retail too!

But I honestly find it quite sad that such lovely pieces are selling for half off (sometimes even more than that) retail for brand new, unworn pieces. All the craftsmanship and thought that goes into these designs just devalued like that.

I guess another thing is while H jewelry is nice, they aren't as comfortable to wear as VCA or Cartier pieces, and there's a difference in the workmanship level.

Sorry if this sounds paradoxical. I just had this internal monologue in my head.

I understand where you're coming from. It's true that some people may prefer the workmanship of brands like VCA, Cartier, Chaumet, or Boucheron over Hermes. It can be a bit daunting to consider purchasing a Hermes piece when it's priced similarly, if not more, than these other brands.