PART 1 👜Birkin: The Handbag That Costs More Than Your House

0:00Yetis, you look fantastic today. Jack and I here, coming at you straight from the T-boy studio. Nick's expecting a baby this week. So we're not doing our regular show. Instead, we prepped this episode on the most expensive treat of all time so Nick can spend some time with his baby. Yeah, I know. We don't know. But in the meantime, we whipped up the most expensive treat ever for you. It's a deep dive episode on the highest priced handbag in history, the Birkin bag. Ah, the Hermes Birkin bag. It is the latest episode of our weekly show, The Best Idea Yet. TBIY, where we break down the most viral products in history and their epic origin stories.

0:38And now for this special occasion, we divided our Birkin bag podcast into two parts, 25 minutes long. Each fits perfectly into your morning T-boy routine and perfect timing because next week is New York Fashion Week. Yeah. So stick this podcast into your handbag, which may or may not be a Birkin, probably not. What better way to celebrate than with the wildest product in all of fashion. So Jack, what do you say? Let's hit the Birkin app.

1:11Jack, can I tell you what I love about your Luke? My look? No, no, no, no, your look. Your Luke. Okay, go ahead. Tell me. Even though your career has gone from finance to entrepreneurship to tech, your wardrobe hasn't changed. You know? Some might call that stubborn or outdated. I call it classic. Okay, okay. If I had to sum up your style, here it is. chalet chic. I like that. Usually you'd have like a slim fit flannel on, a flat brim hat, and like a pair of sunglasses that scream, I spend my money like I fry my bacon. Does that make sense? Not completely, but I'm very into it. I guess what I'm saying, Jack, is what I love about your wardrobe is that it is the reflection of you.

1:55It's your identity. And you have owned that for the 15 years I've known you. Can I have a turn? Yes, yes, yes. Nick's signature look is what I call a Goldilocks button-down shirt. Not too pressed, not too wrinkled, and always a button-down collar. Khakis, not jeans, but never khaki color. They're like navy black and sometimes white. And then sneakers from a brand you've never heard of, but that you would love to tell us about. I do appreciate, Jack, that we're both still wearing Slim Fit in the high hopes that that trend actually returns one day. Fashion is cyclical. But besties, there happens to be a product that is inspired by one person's legendary sense of style.

2:33And it's a product that has never been cyclical. In fact, it has only gotten more and more popular each and every year it has existed. We're talking about the Birkin bag. It's called a Birkin bag? A Birkin bag. Oh my God. A Birkin bag. You've heard of it? Yes, Rory Gilmore, we have. because the Hermes Birkin bag is the most expensive, coveted, and hard-to-get handbag in the world. Every single one is handcrafted over 18 hours by a single craftsman and made from leather in varying degrees of exotic, from calfskin all the way to alligator, crocodile, and even, if you're lucky, a diamond-coated ostrich.

3:14And for this handcrafted bag, prices start at around$12 ,000 on the low end. Yeah, by the way, that's$12 ,000 if you get it directly from its luxury manufacturer, Hermes. But sorry, doing that is next to impossible because of their infamous wish list. You might be on standby, waiting up to five years for that phone call. Unless your name is Cardi B, Kate Middleton, or happens to rhyme with Ardashian. In which case, you'll get the bag right away. But a used Birkin bag? Oh, that can go for up to$450 ,000. And a handbag selling for more than a house? Yeah, we had to look into this. The bag is named for a pop culture icon, Jane Birkin, who helped invent the bag on a late night flight from Paris to London.

4:01But that flight was only the Birkin's beginning. It would take the fashion world more than a decade to catch up to its mystique. Because while most industries are focused on efficiency, Hermes is not. And that's part of the secret sauce to the Birkin success. So today, besties, we're getting into how Hermes turned a simple tote into the holy grail of handbags. And how Hermes jumped ahead of its rivals to become the number one luxury stock in the world. They do a fraction of the sales of Louis Vuitton, and yet they're the same$250 billion size. We'll also hear how Sex and the City transformed Hermes, and why this bag is now possibly a better investment than your 401k.

4:40Here's why the Hermes Birkin bag is the best idea yet.

4:48From Wondery and T-Boy, I'm Nick Martel. And I'm Jack Cravici-Kramer. And this is the best idea yet. The untold origin stories of the products you're obsessed with. And the bold risk-takers who made them go viral. I got that feeling again. Something familiar but new. We got it coming to you. I got that feeling again They changed the game in one move It's not a hookah or a fly

5:25Night has fallen over Paris. The airport's Air France departure gate is one of the last few pockets of activity. Well-dressed travelers juggle carry-ons and wait for their boarding call. Next stop, London's Heathrow Airport. It's 1981. Kim Carnes is singing about Bette Davis' eyes, and Phil Collins can feel something coming in the air tonight. Speaking of pop, Jack, there's actually a famous actress and singer right here in the terminal with us. She's tall, she's got long hair, and soft brown bangs falling over her face. Her name is Jane Birkin. Jane Birkin is beloved in France as a performer and style icon, But surprise, she's actually English.

6:10Jane has starred in pivotal New Way films. She's recorded breathy pop songs, and she's known for her unique sense of style. But the main reason every French person knows her name is that for a dozen years, she was partnered up with France's favorite crooner, Serge Gainsbourg. Here he is in a duet with Jane herself.

6:36That song was so scandalously steamy, it gets condemned by the Vatican. Yeah, the Pope, not a Gainsbourg fan. No, no, no, no, no. For most of the 60s and 70s, Serge was part Frank Sinatra, part Harry Styles, and together, Serge and Jane made a terrific power couple years before Tom Holland and Zendaya. The two were photographed everywhere, at parties, selling, or shopping with their daughters. And everywhere, Jane would be snapped with her signature purse, a large woven wicker basket slung over her right arm. It's basically a picnic basket. It looks like it's straight out of a Martha's Vineyard grandmother's house.

7:18It's great for the French lifestyle. You grab a baguette, a couple bottles of Bordeaux, boom, you toss them in this picnic basket, and you are off to go. But in 1980, Jane and Serge break up. And she moves in with another French film director named Jacques Douayon. Well, not that it is any of our business, but Jacques has a pretty bad temper. And a couple of days before Jane's night flight over to London, Jacques intentionally runs over her famous basket bag with his car. So now that she's at the airport getting ready to board, Jane's carry-on is not organized the way she likes it. Instead of her cool wicker basket, she's got a random temporary replacement.

7:57Nick, picture a big floppy canvas tote. It's stuffed with passport, wallet, lipstick, and a leather-bound Hermes appointment book all jumbled together. But besties, Jane is about to get a double dose of serendipity. First, she scores a seat upgrade. Bye-bye, coach! a cello first class. I definitely had pictured her flying first class already. I did too, Jack. Turns out not Jane style, but she will accept an upgrade when offered. Now, the second piece of good luck actually seems more like rotten luck at first, because once she's on the plane, she goes to stow her tote bag above her on the overhead, and her Hermes planner hits the ground, spilling its contents everywhere.

8:41Reminder notes, receipts, cocktail napkins from the airport lounge suddenly accidentally scattered all over her seatmate's feet. Her seatmate looks like he flies first class all the time. He's an impeccably dressed Frenchman with dark eyebrows and kind eyes. He's a good sport as he helps her gather up her receipts in her face. But he does suggest that maybe her planner needs some pockets. So Jane says, what can you do? Hermes just doesn't make it with pockets. That's when the man says, Hermes? I am Hermes.

9:14To be clear, Jane's seatmate with the eyebrows isn't literally Hermes. His name is Jean-Louis Dumas, a fifth-generation descendant of the luxury label's founder, Thierry Hermes. Hermes was founded almost 200 years ago in 1837, when the U.S. had 26 states and was only on its eighth president. Hermes has always been a fine leather company, but in the beginning, that leather was used to make horse saddles. That's right, Hermes' signature saddle stitch was practically waterproof, a smart choice for the 1800s when literal horsepower is how most people got around. But then, the very first automobile arrives, making horse-drawn carriages a thing of the past.

9:59So Hermes' saddle business is on the downswing. But that proprietary stitching may have some other applications not threatened by Henry Ford's Model T. So in the 1920s, Hermes pivots their business from outfitting horses to outfitting people. We're talking golf jackets, jewelry, sandals, and yes, handbags. Thierry hands control of the company to his son, who hands it to his son, who has three daughters. And because of early 1900s patriarchy, it's those daughters' husbands who end up running Hermes. The husband who will eventually lead the entire company is named Robert Dumas. Robert is a talented designer as well as a businessman.

10:40And in 1935, he designs a purse that will change everything about the handbag scene. Now, Jack, I know this is an audio medium, but let's describe this particular handbag because the details are critical. The bag Robert creates is shaped like a trapezoid, wider at the bottom than at the top. It has four metal studs called Clue that act like little feet, keeping the bottom from getting dirty if you set the bag on the ground. It closes with the zipper, then a top flap that can be belted shut with a slender horizontal strap. It's cute, Nick, but why is this bag so revolutionary? Well, Jack, it's revolutionary because when it comes to women's purses, size matters.

11:17In the 1930s, pocketbooks were small and flat. They were more like a birthday card than a purse. But this trapezoidal Hermes bag that Jack just described, it's roomy, it's secure. Robert Dumas calls it a sack a day peche, or translated, the bag for important documents. Hmm, sounds like the kind of thing Jane Birkin could have used on that transcontinental flight. You are right. Like, this is exactly the kind of thing that a jet-setting actress would really enjoy. And in the 1950s, this nifty bag of Robert's gets its champion, the actress Grace Kelly. If you're a fan of Hitchcock movies, then you know exactly who Grace Kelly is.

11:57the classic blonde beauty, who starred in films like Rear Window and To Catch a Thief. In fact, Jack, in that last film, Grace's character was given the Hermes Saca de Peche as a prop. But funny thing, Grace herself falls in love with this prop, and she actually keeps it after they finished filming. It becomes a permanent part of her wardrobe. The paparazzi start snapping pics of Grace getting in and out of cars, going to film premieres, and traveling with her new husband, Prince Ranier of Monaco, all with this handbag. When Grace and her prince are expecting their first child, Grace even puts this purse in front of her belly to keep her baby bump out of the tabloids.

12:38And this bag becomes the luxury accessory. It is so associated with Princess Grace that Hermes eventually renames it The Kelly. When the bag's designer and head of Hermes, Robert Dumas, dies in 1977, his son, Jean-Louis Dumas, takes over. And this brings us back to that flight to London, where Jane Birkin is apologizing as she picks up the loose contents of a replacement bag from Monsieur Dumas' lap. As Jane stuffs the Hermes planner back into her tote, Jean-Louis is probably thinking, uh, ma 'am, why not just get a Kelly bag? It literally has three ways to stay shut. It is the most practical luxury bag that you can buy.

13:20Jane is well aware of the Kelly, but it's too small for her. Her wicker basket could hold two full bottles of wine and the rest of her stuff, but Kelly cannot. Well, basically, Jack, the rest of the flight, Jane turns into a one-woman focus group and tells Jean-Louis her ideal bag would be like the Kelly, only bigger. Like four times bigger, halfway between a purse and a suitcase. What she's after is the Goldilocks size. And then the head of Hermes stops her and he says, whoa, whoa, show me. So, Grace grabs a vomit bag that's sitting in front of her. Whoa, whoa, whoa. Where's this going? Don't worry, Jack.

13:56Jane is not feeling queasy. She just needs some scrap paper. So she starts sketching her idea on this little barf bag as Jean-Louis, the head of Hermes, looks on. And this is the first blueprint of what will become Hermes' star product. Something that will change the entire fashion industry. As the landing gear drops and ears start popping, Jean-Louis folds the vomit bag neatly away and puts it in his pocket. It really doesn't take long to fly from Paris to London. No, it doesn't, Jack. But apparently it is just long enough to change history. With Jane's sketch safely tucked away, they bid each other adieu with a promise that Jean-Louis will make her drawing a reality.

14:40Once she deplanes, Jane forgets all about this. Until a month later, when she gets a call inviting her to Hermes in Paris. Every Hermes store is a work of art, with multiple floors of their latest silks, suits, fragrances, and handbags. The store smells like crisp champagne, cured calfskin. And is that money I smell? I believe that is Frank's, Jack. But our friend Jane is buzzed right up to the design studio. And it's there that she's handed a large handbag made of cardboard. board, because this is how Hermes works out its prototypes. To her surprise, this cardboard model really does look just like what she drew up for Jean-Louis, like an oversized Kelly bag, but a little more casual and wider at the top, so it's less trapezoid and more rectangle.

15:28Like the Kelly, this prototype has a secure top flap that locks and those little feet at the bottom, the clue, that help it stand up on its own. But the main difference between this new bag and the Kelly? The handles. The Kelly's got just one handle right on top, and you can't carry it open. The flap needs to be closed for the whole thing to work right. But this new bag has two handles, which means you can put it on one arm and rummage around in it with the other hand. Part purse, part tote bag. It's perfect for a woman on the go, just like Jane. So Jane steps back and admires this cardboard purse on her arm.

16:06It looks sharp. The Hermes designers invite Jane's opinions on the leather types, and she obliges. Until finally, they suggest, what if we named it after you? Jane stops. What? I mean, this makes sense, right? Like that Kelly was named for Grace Kelly, but it took years to adopt that name. Why not just go ahead and use Jane's name right now, since she herself has been so instrumental in conceiving the entire thing? Jane is flattered, and Jane agrees. And three years later, in 1984, voila, Jane returns to that very same shop to pick up a finished calfskin leather version. This is the first official Birkin bag.

16:49When she tries to pay for her new Birkin, the sales clerk insists, this is a gift. But frankly, Hermes is getting the massive bargain here. The name of a generational style icon to christen their newest product. We did discover that Hermes also gives Jane an annual royalty for the use of her name, which she immediately diverts to various charities. But still, this is a steal for Hermes. I mean, Jack calling their bag a Birkin is no mere endorsement or licensing deal. This is all about identity. We've covered many products on this show that use proximity to celebrity to get ahead. Some, like Juicy Couture, even make it the basis for their entire marketing strategy, relentlessly shipping tracksuit samples to J-Lo's home.

17:34But when you hitch your product to a celebrity's actual name, the relationship goes much deeper. Case in point, Jack, let's look at Air Jordans. That sneaker brand is forever associated with Michael Jordan and his incredible basketball career. Now, long after he hung up his jersey, the brand is worth$7 billion. An endorsement is temporary. A name is forever. So when Jane steps out of that Hermes shop with the very first Birkin in existence on her arm, she has no idea what this bag will become. She's just happy she has a brilliant new tote that she can fit her whole day into. And it feels a little more grown up than her wicker basket did.

18:12But this is just the beginning of the Birkin bag's journey. Believe it or not, the next leg of that journey doesn't go well.

18:29When the very first Birkin bags hit the scene in 1984, Hermes has high hopes. This isn't Zara. They're not rolling out 50 new styles every season. When this century-old brand crafts a new thing, that is a big deal. Oh, and at$2 ,000 a piece, or around$6 ,000 today, this Birkin bag is for real people. If price is a signal, the signal here is this bag transcends fashion or function. This is a work of art. At first, these bags are offered in two sizes, the Birkin 35 and the Birkin 40. And that number tells you how many centimeters wide the bag is at the bottom. Later, Hermes will make smaller versions, the Birkin 30 and the Birkin 25, but for now, it's just the roomy ones.

19:13And luxury connoisseurs will quickly learn that there's much to love about these bags, from the fine quality leather to the unique top flap shaped like an M, with special cutouts to fit around that critical second handle. Closing this handbag feels as satisfying as two Lego pieces snapping together perfectly. But the real standout feature is Hermes' approach to craftsmanship that basically ignores the entire industrial revolution. You see, today, we're used to assembly lines and manufacturing to maximize efficiency. One worker stitches the bag handles, another cuts the base, another glues the little feet on, so on, so on.

19:51Right, but that is not how Hermes rolls. For Hermes, one single artisan is responsible for assembling each Birkin bag. Each one takes roughly 18 hours to make. And get this, these artisans take two years to train. It's like a master's program in stitching. And Hermes recruits 200 craftspeople for its leather goods division every year. The one bag, one maker system that Hermes has reinforces that each Birkin is a work of art and people will pay a premium for art. And given the effort and the price, Hermes develops a clever system to guard against knockoffs. Basically, they make a secret code. Yeah, it's like an anti-dupe strategy here.

20:36When the craftsperson is finished, they stamp each bag with a discreet little mark to indicate the craftsperson and the year. It is so small and so hidden that it is often called the blind stamp. It's kind of like something straight out of the Da Vinci Code. Yeah. 1995 bags have a Y with a circle around it. 2013 bags, that's a Q inside a box. Oh, and Jack, if your leather is exotic, there is a symbol for that too. One that's much more prominently displayed right near the clasp. A square means that the bag is made of Mississippiensis alligator, while two dots mean that it is Nihiloticus crocodile, which are two species of reptile, you probably didn't even know code into a bag.

21:20No, you didn't. A shooting star means the bag was made for an Hermes artisan's personal use. More on that later. What you need to know now is that these mysterious, subtle, but impactful details start weaving together a lore around the bags. If you know, you know, and very few know. But Jack, after all that, the focus on craftsmanship, the exquisite leather, the Kelly-inspired classic style. Here is the shocker. The Birkenberg sales fail to meet expectations. This is the 1980s, otherwise known as the me decade. Madonna's singing about being a material girl and Wall Street traders are giving commencement speeches about how greed is good.

22:03So you've got brands like Louis Vuitton and Yves Saint Laurent and Chanel enjoying a major 80s sales surge. So you'd think luxury products fit in perfectly with 80s materialism and flashy wealth. But this is the problem for Hermes, because Birkin is expensive, but it isn't flashy. By contrast, Chanel's handbags with their gold flourishes, quilted to black leather, and prominent interlocking double C logo, they are all about the flash. That double C logo from Chanel becomes the ultimate 80s status symbol. By 1984, Chanel is number one in the handbag market. Basically, Jack, Chanel is screaming their brand while Hermes is just whispering it.

22:49And in the 1980s, consumers want their logos to yell. Now, a lot of companies might respond to this challenge by following the leader. Increase the size of the Hermes logo and advertise everywhere like Chanel us. But Hermes does not. In fact, Hermes exercises a level of discipline we have seen from no other company we've covered. They keep their design exactly the same despite every trend going in the opposite direction. Slow and steady, you will never see a giant H anywhere on a Birkin. In fact, the only branding at all is a tiny little stamp hiding under the flap that says, Hermes Paris made in France.

23:28And instead of pushing Birkin sales, they limit production, like really limit production. We can't say how many Birkins Hermes makes in a year because the secret is guarded more closely than Satoshi Nakamoto's True Identity or Beyonce's next album drop. But estimates range from 70 ,000 bags a year to a mere 12 ,000 bags. And now to sprinkle along some more context by our math. Michael Kors pumps out over a million bags with that brass MK brand on it. This scarcity plan and mystery of Hermes is not unlike Ferraris, which we talked about in our Ferrari episode. Enzo Ferrari deliberately kept production numbers low to drive up his car's value.

24:10Ferrari said he's always making one less car than the market demanded. Well, Hermes does the same with Bert. And you know what? It works because wealthy people really don't like being told they can't buy something. If they hear a purse isn't available, that's the purse they want. Throughout the 90s, demand for Birkin rises steadily, and so does its price, until something happens that breaks Birkin mania wide open. Yetis, that's part one of our two-part deep dive on the Hermes Birkin bag. Guess what's coming tomorrow in part two? Talk to me, Jack. Counterfeit rings? Yeah. Secret wait lists Ooh A$450 ,000 handbag All right, no more, no more, no more Yetis, you have got to hear the finale tomorrow You're also going to hear how Hermes is a wildly profitable company Wait till you hear this So tune back in for part two of our episode on the Hermes Birkin bag It is truly the best idea yet

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