Can a stock exchange be a good investment? An expert decrypts the why and the how

With the accumulation of climatic, political and economic crises, is it better to invest in gold, in stone or … in stock exchanges? This is the (f) useful question that we can ask ourselves in the face of a recent record acquisition in Paris: at Sotheby’s a Hermès bag in crocodile torn for 352,800 euros on September 29, 2022. C This is the highest figure carried by a luxury bag in the history of this auction house. It was a Kelly 25 (number which refers to its dimensions in centimeters) Himalaya (this is how white crocodile skins are called), initially estimated at Sotheby’s between 100,000 and 130,000 euros.

And if that sum can already make you dizzy, it seems almost meager compared to a record sale at Christie’s: a Kelly Himalaya 28 by Hermès, sold for four million Hong Kong dollars, that is, almost. € 524,000, as of November 2021. This turned out to be diamond-studded at the level of the metal frame and its lock.

But how can the stock exchanges reach such sums? Is it possible to use other luxury leather goods as an investment to make incredible capital gains? Can we find treasures in our grandparents’ closets to sell fortunes at auction? Alice Léger, head of Hermès sales in the fashion and luxury accessories department of the French auction house Artcurial, sheds some light.

Interview with Alice Léger, Artcurial’s Hermès specialist

To miss. Are you surprised at the price at which this Kelly 25 Himalaya bag was sold?

Alice Leger. Yes and no. No wonder, because it is a highly sought after, extremely rare piece. And because tiny bags have been all the rage in recent years, size 25 is proving even more coveted. Where I am most surprised is the height of the amount. This record for a bag at Sotheby’s rivals that at Christie’s, where it was studded with diamonds, which further explained its price. It’s the auction game.

Why are Hermès Kelly and Birkin bags so coveted?

Because they are iconic and very complicated models to get from Hermès. Production is very limited, which has an impact on the resale market: the rarer it is, the more expensive it is. We feel it strongly in the middle of the second hand and the temples. These are models that have been coveted for generations and on all continents, constantly reinvented by Hermès through new sets of colors and materials, to always stay up to date.

Hermès’ status as a French luxury house also plays a significant role in the desire for these products. The quality is second to none and far above other luxury homes.

Unlike a car that loses value as soon as you leave the garage after buying it, is it true that Hermès Kelly and Birkin gain value immediately after being bought in a store?

Once purchased in the store, the Kelly and Birkin models do not lose value, as long as you take care of them, protect them from the signs of aging, wear, humidity, etc. They can also gain value in some cases, yes. So much so that the Hermès market is extremely speculative on used cars. It is a niche market.

For this it is necessary to respect certain criteria, such as the fashions of the time. If you buy a size 40 Birkin now you risk earning less by reselling it tomorrow, because at the moment the trend is towards small bags, for example. But we can wait for fashion to turn around, to return to large bags, and then realize a significant added value. And whatever the color, it is above all the state at the time of resale that counts.

Is any luxury bag necessarily an investment that can increase in value over time?

Currently, on the side of luxury houses in general, it is mainly leather goods Hermes which sells more on the second market than in the store. Chanel has significantly increased its prices in recent years, which is sure to have an impact on the resale market. Some limited editions of Louis Vuitton and the collaboration with great artists can sometimes allow to realize a capital gain, especially if they are resold shortly after their release.

At the moment, these are the three houses with which you can have the best chance of realizing a return on investment, even a capital gain, by reselling their most emblematic handbag models. For example, the cost of Hermès Constance models has been increasing gradually for several years: they are now resold at the same price as those bought new in stores.

How to recognize a bag model that will increase in value over time?

It all depends on the purchase you want to make. If it’s a bag you want to carry, you need to buy something updated. At the moment, rather small formats. In terms of color, there are no shades that will sell more than another, although pink and green are very popular these days. It is especially important to pay attention to the condition of the bag and the newer it is, the more expensive it will be (re) sold.

For example, while Jean-Paul Gaultier was the artistic director of Hermès [de 2004 à 2010, ndrl]has released a “So Black” collection. [caractérisé par une métallerie noire, ton sur ton avec le reste du sac en cuir noir]. This collection is still selling fast today at exorbitant prices. Thereby, in July 2021 we sold a Birkin So Black in black alligator, size 30, 115,000 euros. It is still the record for leather goods sales at Artcurial today..

And if you find a luxury bag at a flea market or grandparents’ closet, where can you have it authenticated and assessed to assess its value?

Few houses agree to authenticate a bag, and their policies may change over time, therefore there are no general rules, case by case. You can send it in for restoration / repair under the brand, which will no doubt inform you if it is a counterfeit (in which case, it may offer to destroy it) or not. Other, if it is a bag branded by the big houses, you can contact an auction house that will authenticate it and evaluate its current value on the market. For example, Hermès tends to refer customers to us for this authentication job. This is not their seller’s job (but their crafters can do it if a bag is sent in for repair / restoration).

What advice would you give to those who want to buy a second-hand luxury bag and make a “good investment”?

I do not recommend buying high-value bags on sites like Vinted or LeBonCoin. It is imperative that there is an authentication service worthy of the name upstream of the sale. It is a protection in the interest of the buyer, in my view. All the more so as fewer and fewer people keep their bills, and a well done counterfeit [surnommée « superfake » dans le jargon, ndlr] can replace a real bag with cards.

Don’t hesitate to push the door of the auction houses, which also offer more and more online sales, much less intimidating than in theaters. For example, at Artcurial, from 3 to 9 November 2022, we offer a Hermès Vintage sale: fashion, jewelry, lifestyle, leather goods. There is a large selection of vintage Kelly, around € 2,000, and vintage Birkin, around € 6,000. There will also be less iconic models, but at more attractive prices that are worth a look. To bid, simply register on the site, it’s free. And we can come across priceless nuggets.

Title photo credit: Christie’s; Instagram screenshot.