Melania Trump and Nita Ambani’s beloved Hermès Birkins hold their value ‘better than gold’ during Covid-19 – here’s why

Jan 8 , 2021

Covid-19 has brought uncertainty at the direction of global financial markets, but Hermès Birkin bags are holding their value “better than gold” in these uncertain times. Photo: Jing Daily

While luxury items like Rolex watches may lose value in uncertain times, a Hermès Birkin continues to grow in price even during Covid-19 – online platforms like Rally Road and Privé Porter are even selling them as investments, not accessories

Big-ticket items like Hermès Birkin bags and Rolex watches are often seen as barometers for the luxury business. But how each is being perceived during this crisis couldn’t be more different. Throughout the Covid-19 pandemic, reports have shown that secondary market prices for Birkin bags have gone up, while the values of Rolex watches has dropped.

The number of Birkins that appear on the resale market during a recession usually goes up, as trading a high-value item for cash flow is common during a market downturn. But what is surprising about the Birkin bag is how its price remains strong, even in times of oversupply – the basic economic principle of supply and demand doesn’t seem to apply when it comes to the price of this bag.

According to the financial publication Nikkei one of the oldest second-hand luxury shops in Hong Kong, Milan Station, reported a 30 per cent increase in transactions involving Hermès Birkins over the past two months.

While the French luxury titan has not been unaffected by the Covid-19 crisis, it fared much better than its competing luxury groups. According to its most recent financial report, Hermès reported first-quarter sales of US$1.64 billion – down from US$1.74 billion a year earlier – and revenue at a constant exchange rate dropped by 7.7 per cent. This drop was less dramatic than those of rival luxury groups like LVMH and Kering, who both posted a sales decline of 15 per cent or more for the first three months of 2020.

As Covid-19 has shown, owning a Birkin bag is not just a token of status, but it has also become an investment that holds its value during the economic downturn. So how has the Birkin managed to not just stay afloat, but act as currency during this world-shaking crisis?

A Hermès Birkin handbag. Photo: Christie’s

Exclusivity: the discreet allure of Birkin bags

Birkins are crafted in a range of different styles, colours and models so that each bag feels unique. A traditionally long wait-list, the length of which ranges between months and years, along with recent store closings due to halted production lines from Covid-19, means it has taken even longer to place and receive a Birkin order than usual.

This heightened exclusivity has boosted bag prices on primary and secondary markets, particularly in China. Upon reopening, Hermès’ Guangzhou flagship store made record-breaking sales: US$2.7 million in a day. The store received a shipment of rare Hermès products that lured Chinese influencers and luxury consumers alike out of their homes to spend money on bags. Women‘s Wear Daily (WWD) reported that included a diamond-studded Himalaya Birkin, a model perhaps similar to that flaunted by billionaires Nita Ambani.

In the past, Birkins were more comparable to a Rolex watch. Despite being no less of a status symbol, the average unit price of a Rolex isn’t as high as that of a Birkin. However, it usually isn’t as difficult to purchase a Rolex because there’s no comparable waiting list. Therefore, the bargaining room for a Rolex watch-owner is limited.