Hermès Birkin Bag's Resale Value Declines Amidst Increased Supply

The resale market for Hermès' iconic Birkin bag is facing a downturn, with prices falling significantly from their peak in 2022. This shift is attributed to an increasing supply of the bags on the secondary market, challenging the scarcity-driven strategy that has long been a cornerstone of Hermès' success and profitability.

London-based reseller Cai Baochun, who previously profited by selling unworn Birkins for more than double their retail price, has stopped stockpiling the bags. He noted that second-hand prices have dropped by more than $6,000 from their 2022 peak, leading him to avoid potential losses. Resellers and industry analysts suggest that this increased supply is directly impacting resale premiums, raising questions about a model that has contributed to Hermès becoming one of the world's most profitable luxury companies.

Named after the late British-French actor Jane Birkin, the handbag has been instrumental in the brand's financial performance. Between 2015 and 2025, Hermès' annual sales tripled to €16 billion ($18 billion), with the company reporting an operating margin of 41% last year, surpassing competitors like Chanel, Gucci, and Louis Vuitton.

Resale Market Under Pressure

The allure of the Birkin has historically been tied to its exclusivity, with access often linked to significant spending on other Hermès products like scarves and clothing. Resellers estimate that customers typically spend between $10,000 to $20,000 before being offered the chance to purchase a Birkin or Kelly bag. Hermès, which states a Birkin takes 15 hours to craft, does not disclose its sales policies or production numbers and declined to comment for this story.

Across the U.S., Europe, and Asia, six out of nine Birkin resellers interviewed reported a decline in resale prices over the past year, with five also noting softer demand. Antoinette Hunter, founder of luxury handbag reseller Lilac Blue, stated that while sourcing Birkins is no longer a challenge, profitability on resales has decreased. She observed that the price for an unworn black Birkin 25, a highly sought-after model, has fallen by approximately £4,000 ($5,336) since 2022 to around £24,000. In contrast, Hermès sells the same model in Britain for £9,390.

Brokers like Bernstein have noted this trend, with the average resale price for Birkin 25 bags in the third quarter being about 1.7 times the retail price, down from approximately 2.6 times in 2022. This compression of the resale market margin could potentially make purchasing directly from Hermès less appealing if the brand continues to increase its retail prices.

Business Model Under Scrutiny

For over a decade, the combination of limited supply and high demand allowed Birkin bags to command substantial resale premiums, a situation that benefited both Hermès and resellers. The prospect of profit in the secondary market incentivized Hermès clients to make additional purchases from the brand. Sarah Davis, founder of Fashionphile, described this as a "win-win" scenario, noting a 32-fold increase in Birkin listings on her platform over 15 years.

However, Hermès has been gradually expanding its production capacity, opening one workshop annually. Concurrently, the proliferation of resale platforms like Vestiaire Collective and The RealReal, along with online vintage boutiques and social media channels, has made reselling more accessible than ever.

Despite the continued demand for Hermès items, the brand's stock has experienced a notable decline, losing nearly 40% of its market value this year, making it one of the poorest-performing luxury stocks. UBS analysts downgraded Hermès shares to "sell" earlier this month, citing concerns that the growing supply of Birkin and Kelly bags on the secondary market could undermine the brand's scarcity-based business model. They estimate that the number of these handbags listed for sale globally is now six to seven times higher than pre-pandemic levels.

Analysts anticipate that Hermès will report its weakest quarterly sales growth in six years when it releases its earnings, with Visible Alpha estimates projecting a 5.2% increase. While the leather goods division is still expected to grow, demand for clothing, silk scarves, and perfumes is reportedly cooling, suggesting fewer customers are making the initial purchases typically required to qualify for Birkin bag acquisition.

In response to questions about whether Hermès should slow production to protect the brand's exclusivity, CEO Axel Dumas stated in July that production is contingent on the availability of trained artisans and high-quality leather. Some resellers, like Sarah Davis, maintain a more optimistic outlook, noting that prices for Birkin bags on the Fashionphile platform have remained stable and even seen a slight increase this year, partly due to renewed interest generated by celebrity endorsements.