Fallout from the coronavirus and lockdowns to contain it have pounded financial markets and sparked surging unemployment. But the economic gloom has yet to deter collectors of some of the French luxury industry’s most sought-after products, resellers say.
Sales of pre-owned Hermes and Chanel handbags have been stable in price and volume since the start of the crisis, excluding an initial slowdown when European lockdown measures went into place, according to Max Bittner, chief executive officer of Paris-based luxury resale website Vestiaire Collective.
Hermes’s Birkin and Kelly models — which start at just under $10,000 — have increasingly been seen as an investment vehicle as the online resale market pushed prices into the spotlight. There are more buyers than bags, and well-maintained specimens can often be flipped for a profit online.
“It’s a generally accepted principle that these items hold their value,” said Jeffrey Berk, co-founder of Prive Porter, who says its resale service is moving more of the handbags than ever. For some wealthy consumers, “it can be a way to park your money while indulging in a hobby.”
While the economic turmoil could lead some people to cash in on the value of their fashion collections, that supply is being offset by the fact that Hermes’s own stores and factories are closed, Berk said.
Another sign of the luxury resale market’s resilience is the success of Vestiaire Collective’s 59 million-euro ($64 million) funding round, which the company announced Tuesday. High-end items are performing well since the crisis, as are the most accessibly priced items on the site, Bittner said. The mid-range segment between 300 and 1,000 euros is growing more slowly, he said.
The coronavirus outbreak is widening the gap between traditional wholesalers and online players, including resellers, who were already on the rise, according to Sanford C. Bernstein analyst Luca Solca. Online demand for items like the Birkin might benefit from wealthy shoppers trading down from bigger purchases, like a beach villa, he added.
Another brand whose cachet has proven resilient in the face of the downturn is closely held Chanel, whose quilted leather cross-body bags have been a signature of the brand since it debuted them in 1955.
“We’ve seen some initial indicators that classic models are performing better now,” Bittner said. Chanel and Hermes bags made up 17% of Vestiaire Collective’s sales last year.
Chanel and Hermes declined to comment. Hermes will report first-quarter sales Thursday.
By Robert Williams, Bloomberg
April 20, 2020