Hermes: not just a bag, an investment

IT MAY be the Age of Austerity but there are still waiting lists for Hermès handbags at Dublin’s most luxurious department store, Brown Thomas. Women – or their partners – willing to pay from €4,000 for one of the distinctive French leather bags could be making a shrewd investment. B Because demand outstrips supply, the bags not only retain their value but some offer the potential for significant capital appreciation. They are eagerly sought by collectors worldwide. A secondary market has arisen and the handbags are appearing at fine art auctions. Earlier this month, Christie’s in London featured a selection of Hermès handbags in its Elegance sale and nine sold for in excess of £30,000 (€35,300) each. Pat Frost, a Christie’s director and head of fashion and textiles, said that in order “to make mega-money, the handbags must tick all the boxes”. She explained that they should be from either of two ranges: the Kelly, made popular by movie star-to-princess Grace Kelly, or the Birkin, designed for the English-born French actress and singer Jane Birkin; be in immaculate condition; be made from exotic skin such as crocodile, alligator, or ostrich; and have an unusual colour which is achieved by dyeing the skins to create jewel-like tones. The highest prices paid at the Christie’s sale were for handbags in the Birkin style and alligator pipped crocodile as the most desirable leather. An Asian private buyer paid £49,250 (€58,460) for “a rouge moyen alligator skin Birkin Hermès bag” made in 1998. Unusually for the world of collectibles, the bags don’t have to be “vintage”. An almost new, 2010 model of the Birkin in crocodile skin, dyed a pale green “vert anis” made £44,450 (€52,762). An orange-coloured 2009 Birkin sold for £39,650 (€47,065). Ms Frost said most of the exotic skin handbags manufactured every year are destined for the VIP waiting list with only a handful available for general sale at any Hermès shop. She explained that some of the re-sales were made by women who were unhappy with a bag they had received as a gift. Ms Frost had some appropriately seasonal advice for any rich man thinking of a last-minute Christmas surprise. She said some of the handbags were “bought by wealthy husbands and the wives just didn’t like the colour” and she cautioned men about the perils of buying handbags as gifts: “It’s a tricky business buying for a wife.” Apparently Victoria Beckham, is one of the most high-profile collectors of Hermès handbags and reputedly owns 180. Ms Frost said “the quality of Hermès handbags is superb” and they tend to be passed from mother to daughter and then granddaughter.

Piece of old croc could put you in pound seats

An elderly but extremely handsome woman in pink, trailing a fur coat and a very young husband behind her, wafts in to Christie’s grand hall and tries to find a seat in the auction room. There, the crowd - mostly men in suits and women wearing silk scarves and expensive blow-dries - sit in reverential silence, their faces hardened in focus. All of them are here to buy one thing. No, not a classical painting nor an antique vase - they’re here for a handbag. So, what’s so special about this bag? Victoria Beckham is rumoured to own 100 of them worth £1.5 million (R16.1m), Lady Gaga enraged fashion lovers across the world by defacing one, there’s a six-year waiting list to have one made, but now you can own your very own (albeit secondhand) version… if you’ve got a spare £49 000 (R527 558), that is. Yes, you read that right. At Christie’s, an anonymous bidder paid £49 000 for a secondhand bag. But this was no ordinary bag: this was a limited-edition Hermes Birkin bag and, it appears, women will do (or pay) whatever it takes to get one over their arm - even in the middle of a recession. Forget the British Fashion Awards, the bi-annual auction of Hermes bags at Christie’s is the real fashion event of the year. Fifty-one handbags went under the hammer, and the Rouge Moyen alligator Birkin, 1998, which sold for £49 250, broke Christie’s records as the most expensive handbag ever sold. “The most sought-after bags are always the Birkins and Kellys (named after actresses Jane Birkin and Grace Kelly),” says Pat Frost, Christie’s director of fashion and textiles. “And the interesting thing is that yes, of course, they’re bought by wealthy people, but we don’t see the same people coming back over and over again. The mentality seems to be that you search for your perfect Hermes bag and once you find it, you’re done.” So why the eye-watering price tags? “The really expensive bags are the ones made of exotic leathers: crocodile, lizard, alligator and ostrich. “With the croc bags, which command the very highest prices, the paler the colour, the more the bag is worth because it’s extremely hard to dye the skins successfully. “In addition to that, there is only a limited supply of crocodile in the first place. “Hermes don’t give us the details of their distribution and production but, for example, we know that the Sloane Square store gets only four crocodile bags to sell off the shelf each year.” And the buyers at the auction know that all too well. An elegant woman in her 60s, dressed in purple, fought with an internet bidder to snap up a black matte alligator Birkin for a mere £32 450 - an anniversary present from her husband. “I’ve always loved Hermes bags, I had my eye on a few here today. I particularly wanted crocodile or alligator skin - they’re almost impossible to come by,” she said. Right. Understood. Material limited and production tricky - but you could say the same thing about state-of-the-art computers or cars, and they don’t seem to be holding their value so well. In fact, the Hermes bag is almost unique in its position as a “recession-proof status accessory”. While most designers have conspicuously not shown “It” bags on their catwalks of late, the Hermes bag fever continues unabated. “The point about Hermes bags is that they’re more than fashion accessories,” says Rebecca Lowthorpe, Elle magazine’s fashion features director. “They’re more comparable to collectable works of art. We are talking about the absolute pinnacle of heritage luxury… We just wouldn’t be having this conversation about a bag made by, say, Chanel.” So how did so many of these bags - 16 Kellys and 19 Birkins, to be precise - make their way to auction if they’re so beloved by their owners? As well as some antiques from the ’60s, quite a few of these bags were made only this year or last. Leonie Ashfield, press officer for Christie’s, explains that many end up at auction for the same reason that eBay is bursting with unwanted presents in January. “Often brand new bags end up here because a husband has bought it for his wife in the wrong colour or style,” she says. “You want to make sure you get it right because it’s a real investment.” Other fashion insiders tell me that the stories behind the bags help bolster the seemingly unstoppable cult of Hermes: the Birkin story being the most famous. So are you sitting comfortably? Once upon a time on a flight from Paris to London in the early ’80s, Jane Birkin was wrestling with a tattered old straw bag (or a plastic bag, depending on which version of this fashion myth you subscribe to) from which her possessions were spewing forth. Complaining that she just couldn’t find a good size handbag and musing upon how nice it would be if Hermes were to make one, she discovered that the man next to her was none other than Hermes boss, Jean-Louis Dumas.

Khloe Kardashian, who collaborated with sisters Kourtney and Kim Kardashian to create a collection for Bebe, wore a navy Hermes Birkin to a Bebe in-store appearance in Los Angeles earlier this week. The Kardashian Bebe Collection includes holiday apparel

Khloe Kardashian, who collaborated with sisters Kourtney and Kim Kardashian to create a collection for Bebe, wore a navy Hermes Birkin to a Bebe in-store appearance in Los Angeles earlier this week. The Kardashian Bebe Collection includes holiday apparel, jewelry, shoes and handbags. Khloe and Kourtney Kardashian signed autographs for Bebe customers and Kardashian fans and also described their favorite pieces from the Kardashian Bebe Collection. Both Khloe and Kourtney Kardashian took a liking to sequins as well as gold bangles during the presentation. Unfortunately, the Kardashian Bebe handbag collection was not promoted as well as handbag fans would have liked to see it. With Khloe wearing her Hermes Birkin instead of a Kardashian Bebe bag, the focus was pulled away from the Kardashian Bebe handbags and thrown more into other items from the line such as clothing and jewelry. Khloe and Kourtney Kardashian did look dashing in their Kardashian Bebe attire embellished with holiday sequins. Too bad handbag fans did not get a chance to see Khloe and Kourtney with Kardashian Bebe handbags paired with their outfits.

Hermes family creates majority holding company

The family shareholders of leather bag maker Hermes announced on Sunday the creation of a holding firm with more than 50% of Hermes International's capital, in a move to defend it against takeover by luxury giant LVMH. The family said in a statement that its new holding company would be distinct from Emile Hermes SARL and would have preference rights on the remaining stock owned by the family members, who together hold about 73.4% of the stock. "The family's commitment to create this majority holding is irrevocable," it said. "This internal reclassification will not have any effect on the family's stake in the capital of Hermes International or its partnership." LVMH, led by billionaire businessman Bernard Arnault, rattled Hermes in October when it revealed it had taken a surprise 17.1% stake in its smaller peer, later saying it wanted to buy more shares. The family shareholders, who number around 60, have said they consider Arnault's move unwelcome and have called for him to withdraw from Hermes' capital. One of the strategies discussed to defend Hermes from a takeover was to create an unlisted holding company for the family shareholding and agreeing shareholder pacts, a person familiar with the matter told Reuters on Friday. Hermes stock was down 7% on Friday, surrendering only a portion of the 16% gains made earlier this week as massive volume on Tuesday sparked market speculation of a big block trade ahead of the family meeting. LVMH had declined to comment on the share price moves. The family said it would appeal for the definitive approval of France's AMF stock market regulator before setting it up. It may then need to ask France's AMF stock market regulator for a special exemption from rules forcing it to make a public takeover offer for the whole company. The threshold in such cases is 33% ownership. But French minority shareholder association Adam warned this week it would demand that the family make a full offer. Hermes said last month it expected to post further double-digit percentage sales growth next year, though this would not match the record level expected for 2010.

Piece of old croc could put you in pound seats

An elderly but extremely handsome woman in pink, trailing a fur coat and a very young husband behind her, wafts in to Christie’s grand hall and tries to find a seat in the auction room. There, the crowd - mostly men in suits and women wearing silk scarves and expensive blow-dries - sit in reverential silence, their faces hardened in focus. All of them are here to buy one thing. No, not a classical painting nor an antique vase - they’re here for a handbag. So, what’s so special about this bag? Victoria Beckham is rumoured to own 100 of them worth £1.5 million (R16.1m), Lady Gaga enraged fashion lovers across the world by defacing one, there’s a six-year waiting list to have one made, but now you can own your very own (albeit secondhand) version… if you’ve got a spare £49 000 (R527 558), that is. Yes, you read that right. At Christie’s, an anonymous bidder paid £49 000 for a secondhand bag. But this was no ordinary bag: this was a limited-edition Hermes Birkin bag and, it appears, women will do (or pay) whatever it takes to get one over their arm - even in the middle of a recession. Forget the British Fashion Awards, the bi-annual auction of Hermes bags at Christie’s is the real fashion event of the year. Fifty-one handbags went under the hammer, and the Rouge Moyen alligator Birkin, 1998, which sold for £49 250, broke Christie’s records as the most expensive handbag ever sold. “The most sought-after bags are always the Birkins and Kellys (named after actresses Jane Birkin and Grace Kelly),” says Pat Frost, Christie’s director of fashion and textiles. “And the interesting thing is that yes, of course, they’re bought by wealthy people, but we don’t see the same people coming back over and over again. The mentality seems to be that you search for your perfect Hermes bag and once you find it, you’re done.” So why the eye-watering price tags? “The really expensive bags are the ones made of exotic leathers: crocodile, lizard, alligator and ostrich. “With the croc bags, which command the very highest prices, the paler the colour, the more the bag is worth because it’s extremely hard to dye the skins successfully. “In addition to that, there is only a limited supply of crocodile in the first place. “Hermes don’t give us the details of their distribution and production but, for example, we know that the Sloane Square store gets only four crocodile bags to sell off the shelf each year.” And the buyers at the auction know that all too well. An elegant woman in her 60s, dressed in purple, fought with an internet bidder to snap up a black matte alligator Birkin for a mere £32 450 - an anniversary present from her husband. “I’ve always loved Hermes bags, I had my eye on a few here today. I particularly wanted crocodile or alligator skin - they’re almost impossible to come by,” she said. Right. Understood. Material limited and production tricky - but you could say the same thing about state-of-the-art computers or cars, and they don’t seem to be holding their value so well. In fact, the Hermes bag is almost unique in its position as a “recession-proof status accessory”. While most designers have conspicuously not shown “It” bags on their catwalks of late, the Hermes bag fever continues unabated. “The point about Hermes bags is that they’re more than fashion accessories,” says Rebecca Lowthorpe, Elle magazine’s fashion features director. “They’re more comparable to collectable works of art. We are talking about the absolute pinnacle of heritage luxury… We just wouldn’t be having this conversation about a bag made by, say, Chanel.” So how did so many of these bags - 16 Kellys and 19 Birkins, to be precise - make their way to auction if they’re so beloved by their owners? As well as some antiques from the ’60s, quite a few of these bags were made only this year or last. Leonie Ashfield, press officer for Christie’s, explains that many end up at auction for the same reason that eBay is bursting with unwanted presents in January.

Hermes: not just a bag, an investment

IT MAY be the Age of Austerity but there are still waiting lists for Hermès handbags at Dublin’s most luxurious department store, Brown Thomas. Women – or their partners – willing to pay from €4,000 for one of the distinctive French leather bags could be making a shrewd investment. B Because demand outstrips supply, the bags not only retain their value but some offer the potential for significant capital appreciation. They are eagerly sought by collectors worldwide. A secondary market has arisen and the handbags are appearing at fine art auctions. Earlier this month, Christie’s in London featured a selection of Hermès handbags in its Elegance sale and nine sold for in excess of £30,000 (€35,300) each. Pat Frost, a Christie’s director and head of fashion and textiles, said that in order “to make mega-money, the handbags must tick all the boxes”. She explained that they should be from either of two ranges: the Kelly, made popular by movie star-to-princess Grace Kelly, or the Birkin, designed for the English-born French actress and singer Jane Birkin; be in immaculate condition; be made from exotic skin such as crocodile, alligator, or ostrich; and have an unusual colour which is achieved by dyeing the skins to create jewel-like tones. The highest prices paid at the Christie’s sale were for handbags in the Birkin style and alligator pipped crocodile as the most desirable leather. An Asian private buyer paid £49,250 (€58,460) for “a rouge moyen alligator skin Birkin Hermès bag” made in 1998. Unusually for the world of collectibles, the bags don’t have to be “vintage”. An almost new, 2010 model of the Birkin in crocodile skin, dyed a pale green “vert anis” made £44,450 (€52,762). An orange-coloured 2009 Birkin sold for £39,650 (€47,065). Ms Frost said most of the exotic skin handbags manufactured every year are destined for the VIP waiting list with only a handful available for general sale at any Hermès shop. She explained that some of the re-sales were made by women who were unhappy with a bag they had received as a gift. Ms Frost had some appropriately seasonal advice for any rich man thinking of a last-minute Christmas surprise. She said some of the handbags were “bought by wealthy husbands and the wives just didn’t like the colour” and she cautioned men about the perils of buying handbags as gifts: “It’s a tricky business buying for a wife.” Apparently Victoria Beckham, is one of the most high-profile collectors of Hermès handbags and reputedly owns 180. Ms Frost said “the quality of Hermès handbags is superb” and they tend to be passed from mother to daughter and then granddaughter.

Hermes family to guard shares from Louis Vuitton Moet Hennessy

The move will allow the descendants of Thierry Hermes, a French saddlemaker who founded the company in 1837, to sell their shares without seeing them scooped up by LVMH chairman Bernard Arnault. The founding family owns more than 73 per cent of Hermes, whose handmade Birkin bags typically require waiting periods and five-digit price tags from clients. While the family's 60-plus members are said to sometimes have diverging interests, Sunday's move to create a majority holding "reaffirmed their unity" and was "irrevocable," according to a statement. In September, the hard-charging Arnault -- whose firm owns labels including Fendi, Marc Jacobs and Christian Dior -- shocked Hermes when he disclosed he had bought 17.1 per cent of the company and signalled he might enlarge his stake further. Arnault acquired his shares on the sly through the use of complex derivatives -- a maneuver that sparked an investigation by France's stock market regulator.