All hail the most expensive bag in the world. A rare Himalaya Kelly bag made of crocodile hide recently broke all records when it sold at a Christie’s auction in Hong Kong for a whopping $437,330, making it the most expensive bag ever sold at auction.
Renowned as the ‘rarest bag in the world,’ the Himalaya Kelly, named after Princess Kelly of Monaco, is one that collectors are always on the lookout for.
The Christie's auction was held on November 27 in Hong Kong, and it showcased some of the most collectible pieces currently on the market. The collectibles included limited edition pieces from Hermès, Chanel, to the iconic Louis Vuitton trunks.
The highlight of the auction, however, was the limited edition Birkin bag. The blue-coloured bag, that mimics the façade of the Hermès' store in Paris at night time, was sold for sold for $259,159 in the same auction. Before the auction, the bag's estimated price was between $78,000 to $100,000.
Last year more than 3,500 designer handbags were sold at auction, raking in a massive $32.9 million.
Even the pandemic has not impacted the enthusiasm of handbag collectors. Christie’s last designer handbag online sale, held in New York in July, raised $2.26 million, achieving the highest total for an online handbag sale at Christie’s. It saw global participation with bidders from 29 countries. The highlight of that sale was another limited edition Birkin bag which sold for $300,000, setting a new record for a handbag sold in an online auction in the U.S.
The ‘holy trinity’ of Hermès bags—the Birkin, the Kelly, and the Constance—is what makes collectors around the world go weak in their knees and shell out huge amounts of money for what, at the end of the day, is just a bag.
Although the Himalaya Kelly is regarded popularly as the 'rarest handbag in the world,' it is its sister, the the Himalaya Birkin, which has the reputation as being the 'holy grail' for bag connoisseurs. One such specimen sold for $388,738, in Friday’s auction, breaking the previous world auction record set by Christie’s Hong Kong in 2017, when a Himalaya Birkin sold for $383,000.
These insane price tags is a regular affair. In 2016, at a Christie’s Hong Kong auction, a Himalaya Birkin bag, with white gold and diamond hardware, went for record price of $300,168. A few months later, the Birkin, encrusted with 10.23 carats of diamonds, raked in $383,000.
A year later, in December 2018, Christies London sold the most expensive handbag in a European auction when a Himalaya Birkin with 18k white gold and diamond hardware, made by Hermes in 2010, sold for $296,000, almost double its estimated price.
The bag that fetched $300,000 in the New York sale was also a Himalaya Birkin.
So what is it that makes the Himalaya Birkin the ‘holy grail’ of handbag collections? The answer lies in its exclusivity and rarity, which makes it a status symbol for the super-rich. The ‘Himalaya’ does not refer to the origin of the bag, but rather to the subtle gradation of colour. The grey fades into white, resembling the snow-capped Himalayas. The process of dyeing a crocodile hide is time-consuming, and exponentially more difficult, as the shades lighten requiring great skill. Nearly all the Himalaya Birkins are accentuated with 18k white gold and diamonds.
Their rarity also adds to their appeal. It’s not known exactly how many Himalayan Birkins, Hermès has made, but as per experts their numbers are small. Market sources reveal that Hermes makes only around 12,000 Birkins, which are priced between $10,000 and $200,000 in total a year, and these are generally offered to their top clients. Unlike other bags, you cannot walk into an Hermes store and buy a Birkin. You are put on a waiting list that can be up to six years long, and are then invited to purchase one. Even then it’s unlikely you will get your preferred colour or model.
“The value has increased over time as these pieces are made in a very specific way and hold their value due to expert construction. They are immune to runway trends—the iconic model is more desirable today than it has ever been,” says Rachel Koffsky, head of sale, handbags and accessories, Christie's.
All these reasons have created a secondary market for Birkins with people willing to pay a premium to be able to purchase one that they like without having to wait for it forever.
Birkins—not just arm candy but an investment
Birkins are also the darling of the collectors as they are considered an investment along with their sister bag, the Kelly named after Grace Kelly.
According to the Knight Frank Luxury Investment Index, published by real-estate brokerage giant and wealth-researcher Knight Frank, handbags were a far better investment in 2019 than art. While art had an overall return of 5%, handbags clocked in a 13% gain, making them the number one collectible investment for the year.
What’s more, over a 10-year-time period, handbags have more than doubled in value, up 108%.
As per the report, while the handbag market is being driven by a variety of brands, the Hermes Birkin dominates the high-end of the market. Birkin bags increased 13% in value in 2019.
In 2016, Baghunter, a US-based marketplace for pre-owned luxury bags, came out with a report that took the luxury handbag market by storm. According to them, the Birkin bag outpaced both the S&P 500 and the price of gold between 1981 and 2016. They say that the annual return on a Birkin was 14.2%, compared to the S&P average of 8.7% a year, and gold’s -1.5%.
While handbags have found their way to auctions for more than four decades—Christies sold its first handbag at auction in 1978, a navy blue flap bag from Coco Chanel’s collection to the Smithsonian Institution for $800—it was only in 2007 that they came to be recognised as an asset class. In a London auction, a red Kelly bag was sold for £31,700, setting a record in Europe. The success of that handbag sale signalled to the market that handbags had become a serious collectible.
Will the Himalaya Birkin and the limited edition blue-coloured Birkin, up for auction on Friday, break more records? Bag collectors and investors will be watching closely.