Hermès Birkin Second-Hand Premium Falls from 2.6x to 1.7x
The premium for Hermès Birkin bags in the second-hand market has significantly decreased. According to tracking data from Bernstein, the average transaction price for the Birkin 25 was about 2.6 times the retail price during the peak in 2022, but it has dropped to about 1.7 times by the third quarter of 2026.
Many second-hand dealers report that the price of unused black Birkin 25 and other popular models has fallen by about £4,000 since 2022, with current quotes in London ranging from £20,000 to £24,000, while the retail price in the UK is about £9,390. Some professional resellers have stopped stockpiling due to reduced profit margins.
Among nine second-hand dealers interviewed by Reuters in the U.S., Europe, and Asia, six confirmed that prices have dropped over the past year, and five mentioned weakened demand. UBS estimates that the global listings of Birkin and Kelly bags in the second-hand market have reached 6 to 7 times pre-pandemic levels, with platforms like Fashionphile seeing significant increases in listings over the years.
The company's stock price has fallen about 40% this year, and UBS downgraded its rating to sell this month, citing that increased second-hand supply may weaken the business model driven by scarcity. The company expects sales growth of about 5.2% this quarter, the slowest in six years, but still anticipates growth in its leather goods business.
Overall demand in the Chinese market is weak, with some channels reporting that the allocation and waiting thresholds for popular models have significantly decreased compared to before. The company has not commented on changes in second-hand prices and emphasized that each Birkin takes about 15 hours to make by hand.
In terms of market mechanisms, the narrative of scarcity has supported high premiums and in-store consumption tiers. After the expansion of second-hand supply, the arbitrage space has narrowed, with funds shifting from reselling stockpiles to direct consumption or other categories. The beneficiaries are buyers focused on actual use, while professional dealers and the brand's scarcity pricing model are under pressure.
Source: Public Information
ABAB AI Insight
Hermès has long relied on strict quotas and consumption thresholds to maintain the scarcity of Birkin and Kelly bags. Historically, customers had to accumulate spending in other categories before having the chance to obtain these bags. The surge in demand during the pandemic from 2020 to 2022 caused second-hand premiums to spike, making reselling a primary profit model for some channels, with the company's annual sales increasing from about €5 billion to higher levels during that period.
In terms of capital pathways, the company locks in high profits by controlling production and in-store tiered consumption, while high premiums in the second-hand market reinforce in-store demand. Currently, second-hand supply has significantly increased due to platformization and the release of previously stockpiled items. With arbitrageurs exiting, the brand needs to rely more on genuine consumption rather than resale expectations to support growth.
This is similar to the process seen in other luxury goods that depend on scarcity (such as certain limited edition watches or sneakers) where premiums fall after supply increases. The market is currently in a normalization phase from the pandemic peak, with leather goods remaining a core high-profit business, but overall growth is slowing.
Essentially, this represents a transfer of pricing power. Scarcity once concentrated pricing power within the brand and quota system, but after the expansion of the second-hand market, some pricing power has shifted to supply-demand balance and platform liquidity; when arbitrage profits disappear, consumer pricing on "investment attributes" declines, and brands need to rebalance production and exclusivity narratives.
ABAB News · Law of Cognition
Scarcity supports premiums, supply expansion compresses arbitrage
Reselling profits come from expectations, real demand sets the floor
Quotas are thresholds, second-hand liquidity is the pricing anchor