Super wealthy individuals are spending big on the highest end of luxury
Luxury brand Hermes has set a new European record for the most expensive handbag sold at auction. The bag in question – a ten year old Himalaya Birkin, featuring an 18-carat gold diamond encrusted lock – was snapped up for £162,500 ($217,144). If ever anyone needed proof that the super rich walk among us and are continuing to spend freely, this is it!
The high end of luxury as represented in Dominion’s Luxury Fund is having a great year so far
SOURCE: Yahoo Finance
Hermes is not the only company in demand. Last year, Ferrari set a new record on the number of luxury supercars it shipped. French fashion titan LVMH, best known for high-end brands like Louis Vuitton, Dior and Givenchy, also set a new sales record in 2017. And Kering – another giant French luxury conglomerate – started this year with a decision to focus exclusively on the highest end of high luxury. Each of these companies is reaping the rewards of catering to the super wealthy.
Back to Birkin: The Himalaya bag is just 30cm wide (smaller than the original Birkin), made from nilo crocodile hide and featuring diamonds, and takes its name from its colour, which conjures up visions of the snow-capped mountain range. £162,500 might sound like a ridiculous amount of money to pay for a 30cm bag – but the one sold this week is not the most expensive Birkin bag, or the most expensive bag ever sold at auction worldwide.
Both of those records were set in Hong Kong last year, when another Birkin bag by Hermes sold for £253,700 ($380,000). On Tuesday, when the Himalaya bag was sold, another Birkin was sold for £100,000. It’s easy to understand, then, why Christies (the auction house responsible) describes the Birkin bag as the “undisputed most valuable bag in the world”.
The Birkin bag dates back to 1981, when French fashion house Hermes designed it for actress and singer Jane Birkin. It is the luxury world’s most exclusive handbag – you can get a new one for as low as £7,000 – provided you don’t mind joining a years-long waiting list.
As is becoming increasingly clear, the richest luxury customers among us are willing to pay a premium to avoid those queues. And where demand exists, the market will follow.
Dominion holds a number of companies in its Global Trends Luxury Fund that benefit from the trend towards high net worth individuals’ luxury spending.
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