The world today is crazy, topsy-turvy, and increasingly seems to be going to the dogs. With that in mind, now is as good a time as ever to rethink global currency, and perhaps consider luxury handbags on the same level as gold or diamonds. Do I understand the economy? A little. But I definitely know that Hermès Birkin bags are oft auctioned at Christie's, and can run upwards of $10, even $20 grand. I also know that re-pricing a Ferrari as “16 Birkins” has a nice ring to it.
Recently, Bloomberg reported that the sales numbers for Hermès leather goods have increased—quite a feat in the declining luxury market. Hermès did this by allowing more bags to be sold in the first place. The storied French brand initially created exclusivity by deliberately making its products scarce (who hasn’t heard of the fabled Birkin waiting list?). But the brand doesn’t need to rely on scarcity to ensure exclusivity anymore—in this economy, its products’ price points already do that.
Chanel, meanwhile, has employed a different tactic to ensure exclusivity: raise the prices. Last month, Baghunter reported that Chanel’s 2.55 bag (its Medium Classic Flap Bag) had increased in value by 70% in the last six years, rising eight times faster than inflation in the United States.
Chanel 2.55 Classic Flap Bag / Photo: Courtesy of Chanel
You may be thinking, but fashion is unstable! Currency can’t be considered “in” one day, and “out” another! But luxury is not always the same thing as fashion. Chanel and Hermès are increasing the value of products that have not changed since their inception. In the case of the 2.55 bag, that’s 61 years (it first came out in 1955). Can we really consider them items of fashion at this point? What the hell is “fashion,” anyway?
To many, a large part of the definition of fashion is constant change. Economist and sociologist Thorstein Veblen theorized that what drives fashion is the upper class feeling the need to constantly differentiate itself from the middle class, which felt the need to emulate upper class. Arguably, this is what drives fashion—upper classes setting trends, middle classes adopting them in an attempt to project a higher social status, and the upper classes subsequently changing trends once something becomes mainstream. Save for the times fashion trickles “up” (like when street trends become “cool” and high fashion wants to follow suit), the cycle continues. These luxury bags haven’t changed, and have been (and always will be) desirable.
With that being said, once people start amassing handbags in bank accounts (rather than for personal use), their depreciation in value will no longer be an issue, and you can buy your son’s admission to an Ivy by making his school of choice a donation of 25 Medium Flap Bags. Or, you can just continue to wear them on your arm to prove to everyone that you can afford them. Either way, it seems that handbags are forever. For now, anyway.