Commodity Online
MUMBAI: There are perishable commodities, there are commodities that lose value on storage and perhaps other than precious metals and wine there isn’t anything whose value goes up over time.
But Hermes Birkin bags are an exception. Even at ranges that begin from $7500 and above, the bags are not easy to get as there is a two year waiting list. It adorns the wrists of celebrites worldwide and the fact that precious metals adorn it may add to charm and market value.
Recently the Daily Mail reported that the former Spice Girl,Victoria Beckham is in possession of 100 Hermes Birkin bags, worth more than $2 mn altogether. Posh Spice Girl has been seen carrying the pink ostrich skin and black crocodile versions. She also owns a Silver Himalayan style, that comes with a 3-carat diamond and is worth 1,20,000 dollars. More recently the Birkin has received some notoriety as Ruth Madoff, wife of scamster Bernie Madoff is also counted as being a fan of Birkin bags as she bought a $7500 piece reportedly after Madoff admitted to his scam activities.
The Birkin bag, named after actress Jane Birkin and designed by French fashion house Hermes, is usually priced upwards of Rs 4 lakh in India. The elusiveness of the Birkin has ensured it has remained one of the world's most coveted bags with prices starting at about $9,000 and rising to about $34,000 for a crocodile skin bag, Reuters reported.
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One of the reasons why it is expensive is the fact that they are not factory made but by experienced craftsmen who take 48 hours to complete one piece. They are distributed worldwide to Hermès boutiques on intentionally unpredictable schedules and in even fewer reliable quantities, creating a sense of scarcity and exclusivity around the product. Although the company’s claim of two year waiting for a Hermes bag was dispelled by Michael Tonello, a beautician turned fashion buyer, who says he devised a system to bypass the much-talked about list and spent five years traveling between different Hermes stores to snap up Birkin bags to meet -- and profit from -- this pent-up demand.
The metallic hardware on a Birkin bag (the lock, keys, buckle hardware and feet studs) are typically plated with Gold or other precious metals, such as palladium, which, unlike silver, will not tarnish. The metal lock may be covered with leather as an option when custom ordering. Certain notable Hermès clients have paved buckle hardware with diamonds, notoriously resulting in one black crocodile skin Birkin which notably sold for close to $65,000 at auction in 2005.
Hermes claims that recession hasn’t dented its sales worldwide with 3.2 percent growth at current exchange rates in the first quarter of 2009.
Sales for the Group's own stores expanded by a robust 16% at current exchange rates (6% at constant rates) while sales to specialised distribution networks were adversely affected by poor economic conditions. By sector, sales growth was driven by silk scarves, fashion accessories and the Leather Goods & Saddlery division, with persistently brisk demand for leather bags.
Hermès will continue to invest significantly in expanding its distribution network. It will open or renovate over twenty stores in 2009, primarily in Asia and in the United States.
