Hermès, Kelly 25, Rose Azalee

Investment Thesis 📝
 

Metric	Value
Investment Horizon	4–6 Years
Expected CAGR (Balanced)	8.7% p.a. after fees
Optimistic CAGR	11.6% p.a. after fees
Entry Discount	–2.8% (vs. current listings)
Sharpe Ratio	0.49 (vs. SMI: 0.61)
Value at Risk (VaR)	90% chance to exceed €29,600 after 6 years
Standard Deviation	15.0%
Risk Rating	B (8.0/10 – Moderate risk)

 

• 4–6 Year Horizon: Targeted to capitalize on peak Hermès demand cycles and market scarcity, with projected exit between 2029 and 2031.
• 8.7% CAGR (Balanced): Based on 70% of historical Hermès handbag returns (1980–2015), offering a conservative growth trajectory.
• Optimistic Scenario (11.6% CAGR): Based on 90% of historical Hermès handbag returns (1980–2015), offering a conservative growth trajectory.
• Fair Entry Price: Valuation confirmed 2.8% below bagista.co.uk listings; adjusted for fees, the premium stands at 7.6%.
• 90% VaR Threshold: Model indicates strong downside protection with high probability of exceeding €29,600 in 6 years.
• Standard Deviation (15.0%): Reflects conservative market volatility assumptions in the luxury handbag segment.
• Risk Rating “B”: A stable luxury asset supported by timeless design, high resale liquidity, and limited production volume.

Exit Options at Maturity 🚪

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We will manage the exit strategy on behalf of our investors, ensuring the best possible outcome based on market conditions at the time. Depending on the value of the bag and the prevailing market situation, we can either sell the bag privately to a collector or take it to auction. Both options are carefully considered, and we will choose the one that maximizes the return for our investors.

Why Invest in This Category? 🏆

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Investing in Hermès bags offers a unique blend of stability and growth, making them a compelling asset in the luxury market. For over 40 years, Hermès has never reduced its retail prices, reflecting the brand's unparalleled commitment to exclusivity and timeless value. Iconic models like the Birkin and Kelly bags are crafted with exceptional quality and limited availability, driving consistent appreciation even in volatile markets. The secondary market further underscores their value, with premiums often reaching over 200% above retail. As both a symbol of wealth and a proven investment, Hermès bags offer a rare opportunity to merge luxury with financial stability.

Why Invest in This Asset? 💎

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The 25cm size reflects today’s preference for mini and medium-sized bags, which command premium resale values due to limited production and skyrocketing global demand. The Rose Azalée shade adds an additional layer of appeal. Part of Hermès’ vibrant color palette, this pink hue is delicate, feminine, and seasonal — which boosts both collectibility and emotional resonance among buyers. It’s often reserved for VIP allocations and rarely appears on the open market, increasing scarcity and upward pricing pressure. Crafted in Epsom leather, the bag benefits from high durability and shape retention. Unlike softer leathers, Epsom resists scratches and deformation, making it ideal for long-term preservation in excellent condition — a key factor in investment appreciation.

Context in Time ⏳

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The Hermès Kelly bag has long stood as a symbol of timeless elegance and status. Originally designed in the 1930s and later named after Princess Grace Kelly in the 1950s, it has become one of the most iconic handbags in fashion history. Today, in a world increasingly valuing heritage, craftsmanship, and exclusivity, the Kelly remains a cornerstone of luxury, appealing to both seasoned collectors and new-generation investors alike.

Conclusion 🎯

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With strong downside protection, a conservative 8.7% CAGR, and rare market availability, the Hermès Kelly 25 in Rose Azalée offers a compelling blend of stability, scarcity, and growth. Backed by a timeless brand and active resale demand, it’s a smart addition to any luxury-focused investment portfolio.