Christie’s on Vintage Handbags as an Investment

On February 23rd, the Compagnie Monégasque de Banque (CMB) proposed to its private banking clients an unusual conference entitled “Why go vintage?”. Matthew Rubbinger, Senior Vice-President at Christie’s, head of the handbags and accessories division, gave a talk on the value of vintage handbags. In four years, the market has tripled to reach 27,780,776 € in 2015 (sales of three major players Christie’s, Heritage and Artcurial).

The vintage handbag market benefits from a post-financial crisis syndrome: since 2008, many luxury clients look for value purchases. They wish to invest in classical models that will be transmitted from generations to generations and will not lose their financial value with time. The rarest pieces by Hermès can go up to 221,912 €, the world record in June 2015 for a fuchsia crocodile diamond Birkin.  Those rare pieces include discontinued models (A So Black Birkin 2010 sold 100,812 € at Christie’s Honk Kong, Dec. 2015), models sought-after because they are produced in very limited quantities (An Himalaya Birkin 35 sold for 157,500 € Christie’s Paris, March 2015) and limited editions (A Kelly Nuage dating back 20 years sold 32,475 € at Artcurial Monaco, July 2013). Several limited editions have multiplied their value by 10, such as the Quelle Idole handbag (aka Kelly Doll). Custom-made pieces can be a good investment for clients in need for uniqueness, when the color selection works…

Pieces which are technically difficult to produce are highly valued (A Picnic Kelly sold 49,500 € at Christie’s Paris, March 2015). Exceptional pieces include Sellier Birkin bags.  Indeed, unlike Kelly bags made in Sellier or Retourné constructions, Birkin’s have been produced historically in Retourné only. In 2015, Hermès announced a Sellier Birkin collection but it was never released. Thus, there are less than ten Sellier Birkin in the world.

Other elements which give value to the bag are based on the rarity of the materials (eg. a suede Kelly or an ostrich Birkin, a popular exotic skin increasingly rare), the color of the bag (eg. Porcelaine color or naturally gradient shades), and of course, its condition (more so than the vintage year). The owner is hardly important, except when her name adds meaning to collectors, such as Margaret Thatcher’s Chanel bag.

Due to the complexity involved in estimating those bags,  the expertise of auction houses such as Christie’s is called for. When buying at an auction, the piece is authentified, graded from brand new condition (grade 1) to fair (grade 6) and estimated along its rarity. It is a guarantee for a safer investment. Yet, do not purchase a handbag just because you bet on its future value. Matthew Rubbinger concluded that the best investments on handbags are based on passion.

If you want to learn more OR bid in the Spring 2016 Paris Fashion Week Handbags auction on March 5th, browse the 172 lots for sale on Christie’s e-catalogue at http://www.christies.com

Christian Dior and French contribution to Haute Couture

In 1957, when Christian Dior died at age 52, the fashion world was chocked. Observers were wondering if Paris would remain the capital of High Fashion and if the Christian Dior house would survive its iconic founder and designer. 60 years ahead, we will analyze what makes Christian Dior and Paris forward in fashion.

In order to feed our discussion, read the case and answer the following questions:

  1. Identify how Christian Dior legacy is still pervasive in Christian Dior DNA
  2. Explain how Christian Dior global development managed to elevate the brand image overseas

You might find useful to watch several videos, particularly on the history of Dior:

Pequignet, the unique French luxury watchmaker

Over our last sessions, I referred to the Swiss watchmaking tradition and exceptional craftsmanship. In the next session, I will shade lights on an independent watchmaker, Pequignet, the only French watchmaker. Pequignet Manufacturing facilities and Haute Horlogerie laboratory are located since birth in 1973 in Morteau, French Jura.

Go to Pequignet website: http://en.pequignet.com/. For those of you who understand French, there are interesting documentaries aired on French TV that you will find on YouTube. Watch also this video posted by Pequignet :

In order to feed our discussions, read the case and answer the following questions:

  1. What elements foster authenticity in the Haute Horlogerie sector?
  2. Conduct an analysis of Pequignet situation (SWOT). What challenges does Pequignet face and how does the watchmaker tackle them?

Hermès Strategic consistency

Hermès is one of those brands that is part of our (French) collective culture. Read the document I shared with you and answer to the following questions:

  1. Explain P.Thomas (2011) quote “Hermès’ performance has been driven by strategic consistency since 1837”. Highlight the elements of this strategy.
  2. Many firms operating in the luxury sector, such as Hermès have been family-owned businesses across generations. Identify reasons why family-ownership was dominant until recently.
  3. Explore Hermès digital initiatives and explain how this brand manages to be appealing to your generation without alienating the others.
  4. Explain the reasons behind Shang Xia’s introduction

It is important that you would visit the site Les Ailes d’Hermès and watch the playlist on Hermès contemporary artisan since 1837.

Burberry’s Digital Strategy

In the coming days, we will be discussing Burberry’s digital strategy. You will provide arguments on the value of innovation to Burberry DNA. Also, you will give your point of view on Burberry’s digital transformation and adaptation to changing consumer demands in recent years. Last, you will reflect on the new challenges facing Burberry in the digital world and the actions which should be undertaken to sustain Burberry’s growth.

Watch the Youtube video of Angela Ahrendts as an introduction to Burberry strategy and the art of storytelling: