Home / Business and Economy / Hermes Faces Challenge as Birkin Scarcity Declines
Hermes Faces Challenge as Birkin Scarcity Declines
26 Oct
Summary
- Hermes Birkin resale values have dropped over $6,000 from 2022 peaks.
- Increased production and online platforms make Birkins more available.
- Hermes' leather goods division is crucial, comprising 44% of revenue.
The once-unobtainable Hermes Birkin bag is experiencing a shift in its market appeal. Resale prices have declined significantly from their pandemic-era peaks, with unworn Birkins falling by over $6,000 from their 2022 high. This decrease in value is attributed to a growing second-hand supply and increased production by Hermès.
The scarcity that once defined the Birkin as a status symbol and investment is waning. This trend puts pressure on Hermès' luxury strategy, which historically linked bag availability to a customer's overall spending with the brand. The company's leather goods division, a substantial 44% of group revenue, is now navigating this evolving market.
Expanded online resale platforms and Hermès' gradual increase in production have made the bags more accessible. Consequently, resale prices for models like the Birkin 25 now average around 1.7 times retail, down from 2.6 times in 2022. Investor confidence has also seen a dip, with shares losing nearly 40% of their market value as they assess slower growth and the sustainability of the scarcity-driven model.
