Are Birkins Better Investments Than the Stock Market? The Truth About Luxury Investing with Dana Auslander

20:36I think it's also important to note that COVID created a real distortion in the market. People really, really started buying Birkins and Kellys en masse during COVID, during the lockdowns. So the prices in the secondary market skyrocketed. They've come down a little bit. There's been a correction. But Sotheby's says that, you know, it's usually within 2x of the price of a Birkin. So a brand new Birkin with the orange box received everything went for two times its price at the height of the COVID pandemic. And now it's gone down to about 1.8, 1.9. Really?

21:12Nicole Lapin:That's crazy. I was on the other side of that trade. I was so scared during that time. Yeah. I was like, got to get rid of this Birkin. But I guess I didn't participate in that massive upside. That's odd to me because the luxury market, when the stock market goes down or we're seeing huge global events like that, you would think that people aren't buying luxury goods. It's the K-shaped economy really at play here. I mean, you've got the very, very wealthy just getting wealthier and wealthier. And what they're spending their money on is mostly cars and watches and Birkins and experiences. And women, I mean, this is the one luxury good that women really care about.

21:50and every guy who's making a lot of money in the K-shaped recovery has a wife or a mom or a sister or someone who really wants a Birkin.

21:57Nicole Lapin:Counterfeits are so good. So good. How has that affected the market? It's really, really going to be a problem, I think. There's a couple of AI-focused apps that tell you whether or not a Birkin is authentic. One is called Entropy. But the fakes have gotten so good. It's a non-negotiable for us. We have three points of clearing the authenticity of the bags. But the manufacturing in China and in Asia has become really, really good. And you have to be very, very careful with what you buy. In my opinion, again, all of my seven Birkins have been bought directly from Hermes. So I know they're real.

22:32But I think it's really scary what's going on out there.

22:35Nicole Lapin:Well, even there was an article about the real real that there were some fakes that got through the system. It's impossible for something not to get through the system. They're that good. And there's so much volume going through. There's so much volume of Birkins and Kelly's running around all over the world right now, from Asia to the Middle East to Europe to here. This is still the biggest market here in the U.S. But the K-shaped economy, economic recovery has only made demand accelerate. Explain the K-shaped economy for somebody who's trying to visualize. There's a lot of letters that you can read.

23:09The K-shaped economy, what I'm thinking of is that the ultra high net worth, the family office money is just multiplying and becoming even wealthier, whereas the average consumer is not spending anymore. And so it's taken out the aspirational consumer. So people aren't really buying unless they absolutely have to, if they don't have a lot of money still to spend. However, the ultra high net worth and the people who are making a lot of money on the top side of the K, this is what they're mostly buying. This experiences is cars, watches, art. That market's doing pretty well. What's the telltale sign of a fake?

23:48The stitching. For me, it's the stitching. I can really tell if I see something off on that. There's blind stamps that Hermes puts on the bags that are, if they're put in the wrong place, somebody that will know will really understand authenticity, will be able to tell right away. Sometimes you can smell a fake. You can do all sorts of things to be able to detect them. Again, I'm not an authenticator. However, we do have them on staff and with the partners that we work with. But they're just getting better and better.

24:19Nicole Lapin:It's a blind stamp. It's like an invisible stamp. Yeah. I also think that there's going to be an interesting digital passport situation happening in Europe with Hermes. Chanel has already implemented it, where I think by 28 or 29, every single consumer good that's coming out of Europe will need a digital passport to prove authenticity. What does that mean? Like a token? That's a good question. I mean, you know, yeah, it's, it's, it's, it's, it's, is it invasive? Is it non-invasive? Chanel has a card that goes with a bag, but Hermes so far hasn't done or said anything about this. So we'll see what, what, what they're going to have to do.

24:56They're going to have to comply somehow, but I I don't really know how they're going to do it.

25:00Nicole Lapin:I mean, when Liberation Day came around, there were a bunch of videos from China in particular saying that they make the Birkins and they would sell directly to a consumer. Did you see that? Yeah, but all Birkins and Kellys are made in France. Nothing is made out of France. And so because they look so believable, these people that were like, they tell you that it's made in France, but really it's made here. No way. No validity. There's no way. No, no. I mean, I think I would recommend that you listen to the Acquired podcast on Hermes. It's a four-hour deep dive. It's fascinating what Hermes has done and how they continue to grow.

25:38They've been around for 188 years. And this manufacturer scarcity around those two bags, styles, has been unbelievable. And if you buy a Birkin or, you know, buy a secondhand Birkin, how liquid is the next market, whether it's second or third?

25:56Nicole Lapin:It's pretty liquid. For a Birkin or a Kelly, especially in the desired styles and colors, it's pretty liquid. I would say it depends on sort of what's going on in the market, in the secondary market. But we sell probably about three to four bags a week. So, you know, technically a bag should sell every 48 hours. So it's relatively liquid. However, there's a lot of friction if you're a consumer trying to sell a bag, as we just talked about. That makes sense. And where would the best options be if you're trying to go to a second dairy market and not get screwed on the fees? It's tough. I mean, there are so many resellers and they'll all give you some kind of a deal.

26:37I would say don't settle for anything under 15 % for Birkin or Kelly. In other words, don't pay more than its 15 % commission on it. But what I found out is that that commission is negotiable too. Yeah, 100%. But they usually won't go below 15%. We do we get like even with the first institutional check here and we basically get 10, 5 to 10 percent. It's hard. It's hard to get the commissions because it's it's how these guys are making their money. The resale platform.

27:09Nicole Lapin:Well, so let's dig more into Lexus and how to get exposure into the asset class without actually buying the Birkin itself. Can you explain how and why you started the first ever AirMaze dedicated investment fund? Sure. So I'm a longtime private equity and hedge fund executive. I'm a lawyer. I did fund formation for years at Schulte Roth. I worked with Citadel and Lone Pine and those guys when they came out. And then I headed product development and structuring at Blackstone in the hedge fund group for close to a decade. And afterwards, I left and worked with a bunch of credit guys. But in the time that I did that, I started collecting jewelry.

27:48And I really love the Los Angeles jewelry designers, Anita Coe specifically. I was one of her first clients. And I always wanted jewelry, at least, to get sort of the treatment of an investment versus just a consumer good that people wore around. But I left it, went back to hedge funds. And during COVID, during the pandemic, someone sent me a prospectus for art, for fractional investment in art in a Basquiat. And I was like, I can do a way better job structuring this than they have. and I've been doing this my entire life. So I started Luxus in 2021. It was when venture financing was flowing and crypto and NFTs and metaverse were all the rage, but it was never really comfortable for me.

28:30I really liked the world of accredited investors and qualified purchasers. I liked the institutionality of it all. So I always try to create those investment opportunities around institutional concepts. So we got Christie's on our cap table, Christie's Ventures. They are sort of the number one auction house, in my opinion. And it was really, really great having them on board. And I said, why don't we create investment opportunities? Fractional investments at first, but then we quickly pivoted to buy side, to fund investments. And we started with gems and jewelry, fancy colored diamonds at first.

29:05And then we found really great product market fit with family offices. And my thesis was always that the investor and the collector are the same person. so you've got to treat them the same way. And I had spent so many years doing investor relations and worked with investors, but now I was also able to see them from the collecting side too. So you've got many hedge fund managers who have art collectors or car collectors or wine collectors. And I said, wouldn't it be cool if we figured out a way to kind of combine this? And we started doing experience around all of, because you can really experience luxury, right?

29:39You can drink the wine, you can drive the car, you can touch the Birkin technically. And that category just kind of skyrocketed. I ended up wanting to do Hermes when Trump was elected, literally the week of November 2024. And I had just listened to the Acquired podcast, which was brilliant. And I'd known Hermes for 20 years. And I was like, you know what, in this kind of an economy, the only thing that's going to do well is gold. And I'm in the world of luxury. We're venture backed, we have Christie's, we have a lot of hedge fund money. So what's going to be the one asset class that I think is going to do well in this economy?

30:15Or mess. So put our head down, did a lot of R &D, and we launched a proof of concept product for a million dollars in May of 2025, so last year. And we worked with a reseller in the space, and we bought and immediately sold a whole bunch of Birkins and Kellys. At the time, it was just new in the box. And I know you're going to ask, how do you source? And I'll tell you that. But where do you store them? Where are these? They're all in New York. They're all in the showrooms of the resellers. So they're all in insurance, temperature-controlled safes and vaults. And it was a huge hit. I mean, people really loved it.

30:53We started doing experiences in the Hamptons and in the city, educating women about financial literacy, but also explaining the history of our mask. Because a lot of people just don't know it. And because the company's been really, really opaque. It's publicly listed, but it's very, very, very difficult to get any information out of them. The stock is very expensive, but they're running great numbers. I mean, they were up 10 % in 2025, and it's an incredible story. So we launched the second share class, if you will, for$2 million, and I did a little bit of press just so that we could get the bag sold.

31:32because for us, the thesis is the spread. It's not necessarily the appreciation in the secondary market. It's we buy low, we sell high. So how are we able to get these bags at really great prices, market them, figure out who the right exit channels are, and then exit the bags and immediately buy new bags and then continue the turnover period, just like stocks or commodities or anything else. So that's the story of the fund. And so we launched a$2 million share class last year for a total of$3 million. It's up on deployed capital. Both funds are up 26 % net, 35 % gross. And we're launching Fund 3 in the summer for$10 million.

32:15So these are tiny dollars to you. But in this kind of a strategy, it's a lot of money.

32:20Nicole Lapin:That's not tiny dollars to me. Those are many dollars to me. But then how does somebody invest in that fund? Just like you would invest in any private fund. We have an administrator. You sign a subscription document. It's open only to accredited investors. And it's a high minimum investment. It's$100 ,000 that we're probably going to raise to$250 ,000 because there's so much demand. So it's been great to kind of see demand for something other than a data center. But, you know, here we are. And then, you know, what we do is we buy the bags. And then we immediately list them on Sotheby's, on The RealReal, on First Dibs, eBay.

32:58and they sell.

33:01Nicole Lapin:So you don't actually ever take possession of them. You say they're at these secondary retailers. No, we do take, I mean, their own, their portfolio. So we own them. They get bought from all over the world. But really the first couple of were, the first two funds were in the US only. They're shipped to New York. They are authenticated. They're inspected. They're cataloged. They're all being photographed. They are the star of the show. And then they're uploaded to all the different marketplaces. and Shopify has made life a lot easier for the resale world. And so they are cross-listed on a bunch of platforms, and they also make their way to a bunch of events.

33:39They'll be here at Milken. At least 10 or 15 of the bags will be. They're on tour. They're on tour. They're a traveling show. We're also generating passive income with them by renting them out to the movie studios around here. Just be careful. No, no. They have to be careful with them. Only the pre-owned ones. Oh, I see, I see.

33:55Nicole Lapin:So being an accredited investor just basically means you self-attest that you have a certain amount of money, which is what? 200 ,000 person and I think 300 couple. And basically it's a self-attestation. You should tell the truth. And it shows that you are comfortable with this level of risk and that you would be OK if you lost all of this money, essentially. Yes. And we also screen people. I mean, this is still an emerging asset class. So we want to make sure that everybody that's invested is really aware of the risks. And there are many. I mean, this is technically illiquid. The authenticity risk is real.

34:37You have counterparty risk with the resellers, believe it or not. So we want to make sure that everyone who is invested is really part of the LP community that enjoys both making money and spending it and also experiencing it.

34:51Nicole Lapin:So regular people can't invest. Or have you allowed like an SPV, which is a... So far, no. So far, it's been family offices and ultra high net worth. Let the people in, Donna. Yeah. Let the ladies in. We're still small. We're a small little group. One day. Yeah, one day. But a year ago, a lot of people started arguing that investing in Tesla was like a proxy. You got exposure to Elon's private companies, whether it was the Boring Company or Neuralink or XAI at the time. Is buying a Birkin like a proxy for investing in Hermes? No, because Hermes does trade at a 40 – well, now it's 43X premium, so it's expensive.

35:35How much is the stock? The stock, it's listed on Euronext. I want to say that it's 1 ,800 euro share. But it's down 20 % this year. So if you do want to invest in our method company, this is a good time to buy. It's on sale. I mean, the equity. Right.

35:53Nicole Lapin:The equity is tucked you out because of the war. How would your fund relate to the price of the stock, if at all? It's not really correlated because ours are physical assets and we actively manage them, just like a real estate manager would actively manage a real estate fund. We buy very intentionally. the styles and the colors and the conditions that I know we know people want. We use data to verify all of this. We're going to be actually the first fund to work with Knight Frank on the handbag, the luxury handbag report that's coming out April 23rd. Yeah. So we're creating a whole market, a brand new asset class.

36:30We're defining it. So when we buy the bags, first of all, the price has to be right. The styles have to be right. The conditions have to be right. And then we also carefully manage the exit. So is this the right bag for Sotheby's and their clients? Is it the right bag for eBay and the live selling stream? Is it right for, we just partnered with Julian's auctions on Gwyneth Paltrow's auction, and we sourced the same bag that Margot Tannenbaum had. So, you know, trying to create narratives and storytelling around an investment, but also a consumer good at the same time.

37:03Nicole Lapin:I mean, a vast majority of people aren't able to buy a Birkin outright. You talked about this idea of fractionizing art, and that's become, you know, of course, very popular over the years. If somebody wants to go in together as this trend has happened more aggressively with real estate and the real estate market, like going in with friends to co-buy a Birkin, would you suggest? Yeah, I mean, you could. How would you get it, though? And at what price? That's the issue. You're not going to get it from Hermes. So you would have to go to the secondary market, pay their 35 % premium or whatever they want to impose on it, and then hope that you can resell it for a price even higher than that.

37:45So it's just margin upon margin upon margin. So you really have to be careful because the acquisition price really matters here. And that's really how you're going to make the money. And for us, it's the most important part of the thesis is at what price do we get in and how can we secure it at scale? So how do you buy low or is this? Well, we're the first institutional check. So we have to tap into a whole lot of private network dealers on WhatsApp that have been doing this for the last 10, 15 years. On WhatsApp? Yeah, we don't do it directly. But we work with the resellers. We have partners both on the acquisition side and the disposition side who have been cultivating buying networks for years now.

38:26I mean, literally for 10, 15 years and are able to buy the bags either new in the box or pre-owned or whatever. And we then buy them. We store them. We photograph them. And then we sell them right away.

38:39Nicole Lapin:So this is not a like try it at home situation. No, no, no, no, no. A lot of work goes into this. We have 80 bags now between fund one and fund two. We'll have 800 by the end of the year. Every single bag and every purchase we make has to have an intentional exit. It's a lot. For someone who's a complete newbie investor, can you talk more to the idea that luxury, you mentioned it briefly earlier, is uncorrelated with the stock market? So we see, and you mentioned the war right now and the stock market is in the pooper, but luxury, not necessarily Hermes stock, but the private market is still holding.

39:21Nicole Lapin:Why does that happen? Well, I mentioned the K-shaped economy before, but luxury also is, first of all, the experience economy has taken off big time. And the luxury companies have leaned into it, and that's paid off. But luxury is also coming off of a little bit of a slump for them. LVMH has been under a lot of pressure. Caring, which is the owner of Gucci, has been under a lot of pressure. And I think because during COVID, there was this push to democratize and to have these entry points in luxury for the people that weren't more aspirational than super, super ultra high net worth. And that's backfired.

39:55You can't be all things to all people. The luxury companies that have done really well are Richemont, which is the owner of Cartier and Van Cleef. Prada, which now owns Versace, but also Miu Miu. Miu Miu's done really, really well. and Armez. Armez actually has done really well compared to LVMH and Caring but they're all starting to, they all bet big on the Middle East. They built stores there. The Dubai Mall, as I'm sure you know, is one of the largest malls, if not the largest mall in the world and there's no tourism there right now and so there are big growth plans and we listened to all the quarterly calls that happened right before the war started.

40:31The biggest plans were to expand in Dubai and Abu Dhabi and Riyadh and all that's been scrapped. So the equities have taken quite a hit. So it's uncorrelated to the overall stock market. Yeah. I mean, again, it depends. The single name brands like Brunello, Cuccinelli, Prada, Richemont, even though that's really three brands, have done really well because they've just focused only on the ultra high net worth. it's the it's the the luxury equity names that have tried to become aspirational like lvmh louis vuitton and caring that have taken more of a hit coach coach well coach yeah if you're

41:10Nicole Lapin:getting the bag it's not an actual hedge in the intrinsic value right like you have a beautiful birkin on the floor right now a red birkin like the the value of that material is nothing It's manufactured scarcity. Yeah. It's not – Like unless it's gold, made out of gold. Yeah, but it's not – yeah, it's not a precious metal. It's not a scarce diamond. It's just manufactured scarcity, but it is a Birkin or a Kelly. That's why we – for the funds, we had to really narrowly define the category. That's important. You can't really go outside this narrow definition because it just applies to these two styles, the Birkin and the Kelly.

41:49You can't even get an Evelyn. An Evelyn is another bag. A Constance. It's another Hermes bags. Those are not quarter bags. And so this is manufactured scarcity. It's completely imposed by Hermes via its store policy. And that's really what we're leveraging.

42:05Nicole Lapin:And you don't think that manufactured scarcity ever goes away? I don't think it'll go away in the next, I would say, five to 10 years. And at that point, we'll already expand. Because what we're doing right now is we're still a wealth tech company. So what we're doing is we're just doing Hermes first. and then we're going to move over to watches, to wines and spirits, to jewelry. So we're just testing this thesis out now and then moving on to other categories in a horizontal integration. I don't think Hermes is going to change. It hasn't changed its policy in 47 years since Birkin was created.

42:41I don't think it's going to change it anytime soon. So Gen Z, Gen Alpha, typically they don't love the labels as much,

42:49Nicole Lapin:But what you see on social media is that they love a Birkin. They still love a Birkin. But their entry point isn't Hermes anymore. It's the RealReal. It's eBay. It's First Dibs. That's not their entry point. And I think that's going to be a really interesting thing to watch because the people who are the Hermes clients are the Gen X and the boomers. And I'm not sure how well cultivated the Gen Z and the millennials and the Gen Alpha community is. Well, there's a big wealth transfer on the horizon. A lot of Gen Z will be getting a bunch of bags, no doubt. So can we, if you're going to continue to go horizontal across luxury, will you just rate these asset classes for us?

43:32Nicole Lapin:So watches, 1 to 10, good investment. The crypto market interfered with watches because so many crypto bros bought watches. And then when FTX happened and they lost all their money, they sold them. So it caused the watch market to kind of plummet a little. Rolex especially was hit but I still think it's a if you narrowly define the category it's a good investment it just depends what watch so a seven seven yeah art again post-war contemporary is like a nine and then I would say other genres are more a five or four the art market's coming out of a little bit of a slump now also but it's it's always blue chip art's always going to do really really well.

44:13Wine. Wine's like a two or three because Gen Z, Gen Alpha and the younger folks aren't drinking. So the sales have gotten very, very, very tepid. And there's a lot of inventory sitting out there. I love my Chateau Margaux personally. So to me, it's going to be a passion project that I'm definitely, definitely doing a wine fund. But you also, the introduction of GLP drugs also has made people not want to drink as much. So the beverage industry has been hit. And I think that's one of the reasons you see LVMH's stock struggle is because so much of it is spirits and beverages.

44:53Nicole Lapin:Yeah, wine has always been a weird one. When I was at CNBC, I did like an alternative investment series. And the wine one was there's a Vinfolio, as you know, like an index that tracks it. I have not looked at the Vinfolio recently. It's really taken a big hit. Yeah, I'm sure. I'm not surprised. It's taken a big hit. So anyway, we'll see. Okay, what about jewelry, which is where it all began? Jewelry I love. I mean, it's my passion. I think vintage jewelry from the 30s and the 40s, Cartier, Bulgari, Van Cleef, will always do really, really well. Collectors love that, and they flock to it. I think newer jewelry has been also in a weird situation because of the price of gold and silver and the volatility within that.

45:32So when you're trying to make a piece of jewelry and you're Anita Coe or Irene Newworth or Jessica McCormick, one day it'll be too expensive to create a piece and the next day the price will like plummet. So I think the volatility of precious metals has really kind of rocked that world, but it's still a 9 out of 10 for me.

45:50Nicole Lapin:So if somebody is thinking about investing in the stock market or getting a Birkin. I still think that it depends when in the stock market, but I still think getting a Birkin, if you can get it from Hermes at retail, you always get the Birkin. How do you win a relationship with your significant other over this? What do you say from an investment standpoint? Give the ladies a tip. Yeah. I mean, listen, it's something that you're going to have forever and ever. You will pass it styles that were selling out so well 20 years ago when I got my Carolyn Besat one are the ones selling out the best now.

46:31So it never goes out of style. It's not trendy. It's institutional. The other brands are, I'm a Celine girl personally also. I love Celine. But I do think that Hermes is just timeless. It's just, it's always going to be there.

46:46Nicole Lapin:Donna, we end our episodes by asking all of our guests for a tip that listeners can take straight to the bank. What would you leave them with? The financial literacy for women piece. I think it's so important for women to own their story and to own the narrative and to be able to invest in equities and credit and alternatives and really figure out how to navigate the financial advisory relationships and their asset managers. And I've been talking to so many women who are doing this. And to me, it's become sort of a passion project and really important. So seek out all financial literacy programs for women and become the master of your own story.

47:23Nicole Lapin:That's right. Buy your own Birkin. You need to convince somebody else.