Why is Hermès skipping out on the second-hand luxury market? Like LVMH, the Birkin bag maker is disinterested in sustainable, pre-owned fashion platforms

Aug 2 , 2022

Unlike some of its competitors, Hermès came out against the second-hand luxury fashion market in a statement. Photo: Reuters

Birkin bag maker Hermès is not interested in getting involved in the fast-growing second-hand luxury market which has attracted some its rivals, its chief Axel Dumas said on Friday, July 29.

Unlike Kering, which has invested in reseller Vestiaire Collective and sells some of its labels on platforms for pre-owned wares, Hermès sees the second-hand market as a threat, saying it drives up prices and can fuel counterfeiting.

“It would be to the detriment of our regular client who comes to the store,” Dumas told analysts following strong first half results when asked if he had engaged with any reseller.

People look at a watch on the Hermès booth at the Watches and Wonders exhibition in Geneva, Switzerland, on March 30. Photo: Reuters

Luxury brands have traditionally been wary of second-hand dealers, but rising interest in pre-owned fashion from younger, environmentally conscious shoppers has prompted some labels to reconsider their position.

Hermès is renowned in the industry for its careful management of production and stocks, which have helped maintain its aura of exclusivity.

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An employee working on a leather handbag at the leather goods workshop of French high fashion luxury goods manufacturer Hermès in Montbron, some 28 kms East of Angouleme, on January 6. Photo: AFP

It has output caps so that demand for its high-end handbags always exceeds supply. Its coveted US$10,000 plus Birkin model generates waiting lists and can sometimes cost more on the resale market than in Hermès stores.

The group does not sell its prized handbags online.

Shoppers exit an Hermès International SA store in the Ginza area of Tokyo, Japan, on February 12. Photo: Bloomberg

“Demand has always been higher than our offer, we’ve been confronted with this for years,” Dumas said, adding the group would not produce more if it meant compromising on quality.

The company has limited growth in its leather goods production 6 per cent to 7 per cent annually. It is currently building five new leather workshops in France due to come into use over the next five years.

A piece titled, “a rare, matt white himalaya niloticus crocodile Birkin 25 with palladium hardware, Hermès, 2013” on display as part of Handbags Online: The London Edit at Christie’s in London, Britain, in November 2021. Photo: Reuters

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“We produce with one thing in mind, quality, if we don’t manage to have this in terms of know-how or beauty of materials, I prefer not to produce,” even if this leads to bottlenecks, he said, adding that it takes 15 hours of labour to make a Birkin bag.

Larger rival LVMH has also said it does not intend to participate in the second-hand market and has emphasised efforts to offer repair services for its products instead.

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Fashion

In light of growing consumer interest in preloved fashion, especially environmentally conscious millennials and Gen Z shoppers, some luxury brands like Kering are embracing the practice
Not Hermès, though – the maison is well-known for its ultra-exclusive leather goods, such as the US$10,000-plus Birkin, which has output caps so demand always exceeds supply