Hermès Birkin bags flood resale market as prices tumble, shares fall 40%

The Hermès Birkin bag — long synonymous with exclusivity so extreme that money alone could not guarantee a purchase — is losing its mystique. Resale prices have fallen more than $6,000 from their 2022 peak as supply on the secondhand market grows, and Hermès shares have dropped roughly 40 percent this year, raising questions about the brand's scarcity-driven business model.

Chai Baochun, a London-based Birkin reseller, has abandoned his strategy of buying up large quantities of bags to hold in inventory after resale prices recently declined, according to Reuters on Wednesday (local time).

Chai has sold Birkin bags through online platforms and social media since 2020. He once resold bags with a retail price of around $10,000 for more than twice that amount, earning a substantial profit — but those days are over.

"I don't want to lose money," Chai said. Online resale prices for unused Birkin bags have fallen more than $6,000 from their 2022 peak, he added.

The price decline stems from a surge in secondhand supply. Reuters interviewed nine resellers across the United States, Europe and Asia; six said prices had fallen over the past year, and five reported a slowdown in demand.

The Birkin bag has long maintained its exclusivity through Hermès's strict sales practices and limited supply. Resellers often had to buy scarves, clothing, shoes and other products at Hermès stores before they could secure a Birkin.

But as sales through resale platforms and social media have grown, the number of bags circulating in the market has increased. According to research firm Bernstein, the resale price of the Birkin 25 model stood at roughly 1.7 times its retail price in the third quarter of this year, down from about 2.6 times at the 2022 peak.

The shift could also weigh on Hermès's business model. If buyers can no longer expect a significant premium on the resale market, the incentive to purchase other Hermès products just to secure a Birkin may weaken.

Hermès's leather goods division — which includes the Birkin and Kelly bags — accounts for 44 percent of the group's annual sales. Resale platform FashionPhile said the number of Birkin bag listings on its site has grown 32-fold over the past 15 years, with 212 bags currently listed for sale.

Hermès shares have fallen roughly 40 percent this year. Earlier this month, UBS analysts downgraded Hermès stock to sell, warning that rising secondhand supply of Birkin and Kelly bags could undermine the brand's scarcity-based business model. The analysts estimated that the number of the two models listed for sale worldwide has grown six to seven times compared with pre-pandemic levels.

The Birkin bag has not lost its appeal entirely, however. Some resellers say demand for high-end models remains strong, and Hermès maintains that output is constrained by the availability of skilled craftspeople and high-quality leather.