Hermes handbag pricing power hits new high
Christie’s auctioneers in Hong Kong recently sold a matte white Himalaya Niloticus crocodile diamond Birkin 30 handbag for $377,000. This sets a new record for the most expensive handbag ever sold at auction, demonstrating the pricing power that Hermes’ most exclusive bags command.
It overtakes a similar bag sold by the auction house last year for $300,000. The later-sold bag featured higher-grade diamonds and more gold than its predecessor.
Hermes’ share price is up 13% this year so far
SOURCE: Yahoo Finance
Birkin bags are considered to be the ultimate status symbol for fashionistas worldwide, usually reserved for celebrities and the super rich. For this reason, it makes obvious sense that Hermes maintains the exclusivity of the product by producing only one or two pieces a year. Currently, there is a six-year waiting list to purchase one, and prices start at $20,000.
Hermes bags – at all price points – are associated with the kind of exclusivity that the Birkin name commands. Originally created for style icon Jane Birkin in the 1980s, the bags have an enduring legacy in the luxury world. But the company is increasingly risking that perception of exclusivity by diversifying into bags that start as low as $1,000. That has played out well in quarterly earnings reports, causing profit to jump, but it has caused some analysts to wonder whether the company can sustain its perception as an exclusivity status symbol.
From a branding perspective, big wins at the auction house might be an antidote to that threat.
Dominion holds Hermes in its Global Trends Luxury Fund.
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