As your lady-friends may have informed you, acquiring Hermès’ legendary Birkin bag isn’t easy. But it can be a great deal simpler than getting your hands on a sought-after piece from skate-style maestro, Supreme. Though one is high luxury and the other factory-made streetwear, both are hard to obtain for the same reason: scarcity.
In the case of the Birkin, its rarity is a result of demand outstripping the production capacity of the handful of French craftspeople sufficiently skilled to construct the bag. When it comes to the Supreme “grail”, however, rarity is a matter of deliberate choice—the company intentionally makes far fewer units than there’s demand for. This is what’s known as creating “artificial scarcity”.
The family-run firm is guarded on exact numbers, but it’s estimated that Hermès produces 70,000 Birkins per year. Because of the quality of materials used, the time needed to hand-make a bag (saddle-stitching, buffing, painting, polishing and quality-controlling just one Birkin takes several days—a single artisan completes the task from start to finish), the paucity of people in France seeking work as craftsmen, and the two-plus years it takes to train them, the company would be hard pressed to increase numbers. But with the world’s growing wealth and ever more affluent individuals hungering for one of these icons, demand continues to grow. This helps explain why the Birkin has appreciated in value by more than 500 percent over the past four decades, and bags can be sold on the secondary market for at least 50 percent above their retail price.
Obtaining a Birkin at auction or through an agent who specialises in tracking down and sourcing the bags can be a costly endeavour. Getting one at retail price in-store also requires a significant commitment. Sources say simply adding your name to the mythical 24-month waiting list can be hit-or-miss. Many of the most successful Birkin collectors got their start building a relationship with their local Hermès boutique, frequenting the shop and making regular purchases, forging a friendship with particular sales consultants, ever-so-casually mentioning their desire to buy a Birkin on numerous occasions—and waiting for the fateful day they’d quietly be invited into a private room to consider a five-figure-and-up handbag purchase.
Even if it’s not their dream Birkin, few Hermès customers will refuse the opportunity to buy any one of the bags—given the chance. Whatever the initial investment may be, you can expect excellent ROI, whether in resale value or usage. “Hermès is different,” said Robert Dumas, who ran the company in the mid-20th century, “because we are making a product that we can repair.” Properly cared for and occasionally restored, an Hermès bag will last several lifetimes; it’s a multi-generational heirloom. When sold like a blue-chip stock, meanwhile, a Birkin is certain to yield profits. In 2017, an Hermès Birkin Himalayan matte albino crocodile handbag was auctioned by Christie’s for SGD500,000. Rarity was key to it achieving that result—Hermès makes just one such bag per year.
The limited stock of Supreme streetwear initially resulted from founder James Jebbia being uncertain how much he’d be able to sell, and placing suitably modest orders with his suppliers. “People think whatever we do, it sells out. But it’s not like that,” the media-shy Jebbia told industry website Business of Fashion in a recent interview. “I think a lot of people still want us to be this exclusive, precious brand, but we’re not at all,” Jebbia said.
That’s a slightly questionable statement according to those at the coalface. Lewis Seah is one of Singapore’s most prolific Supreme collectors. Getting hooked on the brand not long after its 1994 launch, Seah has been navigating the idiosyncrasies of Supreme’s retail model for two decades. While today, Supreme freaks will camp out overnight in anticipation of the brand’s weekly Thursday product “drops”, the ’90s was a more innocent time—though actually procuring goods was still an epic task.
“I think a lot of people still want us to be this exclusive, precious brand, but we’re not at all” – James Jebbia, founder of Supreme
“About 20 years ago, in 1998, I went to New York. I borrowed the money for the flight from my father and really, 90 percent of my trip was just for Supreme—it’s stupid, I barely saw the city. I didn’t even see the Statue of Liberty while I was there,” Seah recalls. “First thing I did was go to the shop, the original Supreme store on Lafayette Street. I arrived about 15 minutes before it opened; it was just me and a few other Asian guys waiting. There weren’t queues then, so I was able to just walk in. I picked out a bunch of stuff. The sales assistants were totally blasé—quite rude, to be honest—but finally, I got the attention of one of them and said: ‘Okay, here’s what I’d like to buy.’ ‘Nah man,’ he shook his head, removing everything but two T-shirts and two caps. ‘You can have this. Come back again tomorrow and you can get some more.’ I remember thinking: What? I just spent all this money and flew for 24 hours from Singapore, and that’s all I can buy? A couple of T-shirts and hats? That’s it? Seriously?”
Afterwards, hanging around the shop and taking in the scene, Seah says: “I got friendly with this skater guy who seemed to be a regular. I asked him if he could try to buy the other things I wanted and he was cool with that. The sales assistants let him get everything he wanted, and everything I wanted, no problems. It was all profiling, you had to look like legit ‘Supreme Clientele’.” Little has changed, Seah reckons. “It’s the same thing now. They have the stock, you can see the stock room is full, but they profile you to size up whether you’re ‘worthy’ of selling to. Recently, my wife went to one of the shops in Japan and they wouldn’t let her buy anything. Not one thing. But if I go into one of the stores wearing vintage Supreme stuff from the 1990s, they know I’m an old-school enthusiast, they’re really friendly, and yeah, they let me get what I need.”
Supreme’s clothing is mostly produced in America and it is well made. But it’s hard to rationalise paying thousands of dollars for a factory-sewn, screen-printed hoodie or a T-shirt, as Supreme collectors will often do on the resale market. Of course, the product originally sold from the store for far lower prices—it’s just the difficulty of obtaining these rare and hard-to-get goods that command the premium. Neapolitan tailoring brand Kiton, however, makes T-shirts and leisurewear sweaters that actually retail for those sorts of sums.
In conversation at a Singapore cocktail party launching the brand’s new Summer Vicuña blazers (tailor-made in Naples by master craftsmen, hand-stitched from the world’s rarest fibres and priced at SGD33,800 each), Kiton CEO Antonio de Matteis shows off a fine cotton knit top, a variation on which he hints is worn daily by a certain hoodie-and-tee-clad tech tycoon. “Feel that—beautiful,” he says, flourishing the SGD2,000 garment. Of high-priced streetwear, de Matteis remarks: “It’s expensive. But where is the quality? Our customers, who don’t want the brand label on the outside, who don’t want everyone to know they’re wearing a Kiton suit—they would never buy that sort of product. They would never wear it. It’s like in the 1980s, remember when everyone was crazy about those plastic watches, and they were buying and selling them all over the world for thousands of dollars? The price came entirely from the rarity of some of those watches and from there the surge in demand. But now, there’s no demand. And because the value was not grounded in quality, those watches are virtually worthless.”
It’s not just plastic time-keeping trinkets that are at the mercy of fluctuations in supply and demand. Things with supposedly intrinsic value can also suffer. Take the example of pearls. These rare natural marvels were once more prized and, in many cases, more valuable than gemstones. The unfortunate story of Morton Plank illustrates how quickly that changed. In 1917, this wealthy New York financier swapped his vast Fifth Avenue mansion for a million-dollar Cartier pearl necklace, a gift for his young wife. Before long though, Mikimoto’s invention of cultured pearls saw supply rise and prices plummet. Following Mrs Plank’s death in 1956, the necklace was sold for just 15 percent of its original price, while the former Plank mansion, which remains Cartier’s New York flagship, is today worth hundreds of millions. (Proof positive of property’s perennial value as the ultimate rare commodity. “Buy land,” as Mark Twain’s aphorism goes. “They’re not making it any more.”)
The pearl’s fate could soon befall diamonds. Often cited as the prime example of artificial scarcity, diamonds aren’t nearly as rare as gem marketeers would have us believe. Diamond prices were first inflated by the De Beers company, which cornered the market in the 1880s, hoarded huge stockpiles of the shiny rocks and released them in sufficiently stingy quantities to assure the world of their scarcity—while simultaneously embarking on an aggressive marketing campaign that convinced men they needed to buy their fiancée a ring costing two months’ salary.
Spending that sum on a Birkin would probably be a better investment, as a diamond’s resale price drops by more than a third the moment it leaves the store. The stones’ dwindling value may be compounded by the increasing sophistication and acceptance of laboratory-grown diamonds. These can be created in unlimited quantities using scientific processes mimicking the high-pressure conditions ‘real’ diamonds develop under. They’re virtually indistinguishable from naturally formed gems, and they’re free of the ethical and environmental concerns that plague their mined twins.
Prominent gallerist Pearl Lam likens art valuations to those of diamonds—it’s a matter of perception and market acceptance. “We give the value to a painting (just as) we give the value to a diamond. What makes a diamond, each carat, worth that price? Someone set that price, but we support it by agreeing to that price, by paying that price… A diamond is just a rock. If no one buys it, it’s worth nothing. But if everybody is buying, then the price consumers will pay, that’s its value,” she suggests.
"It’s all about marketing. It’s like everything and anything. You sell the perception of success.” – Pearl Lam, founder of Pearl Lam Gallery
“With a painting, it’s the same thing. The painting is a perception. We summon the perception of the value of the painting and people support that by buying it,” Lam says. If she prices a work in her gallery at a certain amount and a collector agrees to that sum, the dollar appraisal is legitimised. “For art, and for many other things, we give the value by believing in the value. What is important today in art? If you have the curators, the museums, the big collectors endorsing it, then the artwork, the artist, becomes the next big thing. You know, it’s all about marketing. It’s like everything and anything. You sell the perception of success.”
Using successful sportsmen as ambassadors, sneakers used to be sold by giving consumers the perception—or perhaps, the vague hope—that the shoes would improve their athleticism. While many of the most collectible sneakers today carry the endorsement of basketball great Michael Jordan, and the shoes begat by tennis champ Stan Smith remain the classic kicks. In recent years, the co-branding of a designer or rapper has come to be an equally potent promotional tool.
Queues routinely snake around the block for Kanye West’s latest Adidas sneaker drop, with resale prices on auction sites stretching to more than SGD5,000 for particular models like the Turtle Dove Yeezy Boost 350, while his pal Virgil Abloh’s The Ten collection of tweaked Nike sneaker classics are shifting for up to SGD3,000 on eBay. As Lam says, customers’ acceptance of these valuations validates them. However, the rarity that drives the high prices of these shoes is purely the result of the brands choosing to produce fewer units that will
Industrial giants Nike and Adidas could simply add a couple of zeroes to their orders, ramp up production and make enough sneakers for everyone, killing the resale market (which is estimated to be worth SGD1.6 billion per annum). Instead, they’ve adopted a savvy strategy of artificial scarcity, eliminating the overstocks and discounts of old by ensuring that FOMO-fuelled customers rush to buy “here today, gone tomorrow” models at full price.
Like the most sought-after Yeezys, the bespoke shoes made by British cordwainer George Cleverley cost upwards of SGD5,000. Unlike a Chinese-made sneaker, however, they are entirely handmade. They will last a lifetime, maybe two (Cleverley regularly resoles and reconditions Goodyear-welted shoes passed down from father to son, whereas a sneaker will likely degrade and crumble after 10 years—especially in the tropics). Cleverleys are crafted from the finest materials: exquisite leathers and exotic skins. And vitally, they aren’t merely rare—they’re one-offs.
“True luxury, the truest form of exclusivity,” says Cleverley CEO George Glasgow, Jr, “is when one unique item is made exclusively for one person. More and more, people are coming back to appreciate that attention to detail. They want things that are made just for them, to their own specifications and that are unique to them—that’s authentic exclusivity. There’s nothing rarer than one-of-one.”
Fastidiously fitted to the customer’s feet (no two are alike, even on the same person), crafting your first pair of bespoke Cleverley shoes can take a year. Partly, this comes down to the fact that every shoe is handmade by a small group of artisans working out of Cleverley’s compact Mayfair atelier. “So much handwork goes into our bespoke shoes that it’s only possible to make a limited amount,” Glasgow explains. Whereas an industrial shoemaker can simply churn out a new drop when the first “limited edition” is exhausted (as Nike did with a surprise second release of Abloh’s Ten), Cleverley’s craftsmen only have so much time in their day. “More than 100 man-hours go into every pair of bespoke shoes we make. It’s difficult to keep up with the volume of customer demand,” says Glasgow.
The limited production capacity of artisans is one-factor affecting authentic rarity, terroir is another. To be legitimately labelled champagne, a sparkling wine must be made from grapes grown in that particular region of France. There are only 33,500 hectares of recognised vineyards in Champagne, meaning there’s only a certain maximum yield of grapes—and thus, a limited amount of champagne wine that can be produced each year. The same is true of cognac. Without exception, eaux de vie used in the brandy that carries this appellation has to be distilled from wines made using Cognac-grown grapes.
The Cognac region comprises six vineyard growth areas, called “crus”. “We work with the rarest and smallest cru, which is called Borderies,” says Camus cognac master blender Frédéric Dezauzier, discussing the house’s range of Borderies ‘single cru’ products. Borderies is not only the smallest but also the most historic cru, with a tradition of brandy-making dating back to the 15th century. “It represents only five percent of the total area of Cognac and Camus has five percent of this”; 180 hectares of Borderies’ total 4,000 hectares of vineyards, to be precise. “So, this is a rarity. And rarity is luxury. When you purchase a bottle of Borderies, you purchase something truly luxe, yes. The product of only five percent of the total area of Cognac—it’s absolutely exclusive.” When Coca-Cola sees demand rise, it simply opens another factory to quench consumer thirst. Restricted to working with the finite produce of strictly limited terroirs, the makers of cognac and champagne have no such luxury.
Rolls-Royce automobiles were once made, much like their owners’ suits, entirely bespoke. Customers would purchase a “rolling chassis” (including the chassis frame, engine, gearbox, axles, wheels, brakes, suspension and steering system), then go to an independent coachbuilder to spec the car’s body and interior according to their tastes and whims. The resulting automobiles were true one-offs and are now prized by collectors for their individuality. Having long ago brought coachbuilding in-house, Rolls-Royce continues to offer myriad customisation options and says almost every car it makes today has been created through its bespoke programme.
Last year, Rolls-Royce delivered one of its most ambitious bespoke automobiles of recent times, the singular Sweptail. Giles Taylor, director of design at Rolls-Royce, describes the racing yacht-inspired coupe with sweeping panoramic glass roof as “the automotive equivalent of haute couture… a Rolls-Royce designed and hand-tailored to fit a specific customer”. The one-of-a-kind car took four years to design and build, at a cost to its owner of SGD17 million.
The world’s fastest and most expensive “off the rack” automobiles, despite their multi-million-dollar price tags, Bugatti supercars are reputedly sold at a loss. The company’s owner, the Volkswagen Group, takes this on the chin, as many innovations derived from Bugatti’s research and development (R&D) process may eventually be integrated into the conglomerate’s other marques, such as Audi, Porsche, Bentley and VW.
Luxury Swiss watchmaker Richard Mille, conversely, refuses to explore any opportunities for trickle-down economies of scale. Although his design and R&D team can spend up to seven years, and untold sums of money, in the midst of what he describes as “crazy developments, huge developments, heavy developments” to devise a new cutting-edge timepiece, Mille will only ever produce a particular model in strictly limited numbers. Recouping the costs of Mille’s pursuit of “extreme technique” across a small number of finished timepieces (the company makes only 3,700 per year) results in stratospheric prices, but Mille says his customers value the legitimacy and exclusivity. They’re certainly willing to pay for it—within days of its launch, a recent 30-piece limited edition tourbillon created in collaboration with polo champion Pablo Mac Donough had sold out, customers happily signing cheques for SGD1 million per watch.
Whether based on artisanal workmanship, limited terroir, rare materials and next-level technique, or simply marketing-driven hype and a calculated restriction of production, are any of these rarities truly worth the cost? Ultimately, that’s a matter of personal appreciation and perception. As Warren Buffett—a savvy buyer if ever there was one—once said: “Price is what you pay, value is what you get.”