Why Prices of the World’s Most Expensive Handbags Keep Rising
The price of a basic Hermès Birkin handbag has jumped $1,000. This first-world problem for fashionistas is a sign that luxury brands are playing harder to get with their most sought-after products. Hermès recently raised the cost of a basic Birkin 25-centimeter handbag in its U.S.
stores by 10% to $11,400 before sales tax, according to data from luxury handbag forum PurseBop. Rarer Birkins made with exotic skins such as crocodile have jumped more than 20%. The Paris brand says it only increases prices to offset higher manufacturing costs, but this year’s increase is its largest in at least a decade.
The brand may feel under pressure to defend its reputation as the maker of the world’s most expensive handbags. The “Birkin premium"—the price difference between the Hermès bag and its closest competitor, the Chanel Classic Flap in medium—shrank from 70% in 2019 to 2% last year, according to PurseBop founder Monika Arora. Privately owned Chanel has jacked up the price of its most popular handbag by 75% since before the pandemic.
Eye-watering price increases on luxury brands’ benchmark products are a wider trend. Prada’s Galleria bag will set shoppers back a cool $4,600—85% more than in 2019, according to the Wayback Machine internet archive. Christian Dior’s Lady Dior bag and the Louis Vuitton Neverfull are both 45% more expensive, PurseBop data show.
With the U.S. consumer-price index up a fifth since 2019, luxury brands do need to offset higher wage and materials costs. But the inflation-beating increases are also a way to manage the challenge presented by their own success: how to maintain an aura of exclusivity at the same time as strong sales.
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