“We’re in a lease to purchase the building,” said Michelle Berk, who cofounded the business with her husband, Jeffrey. “These homes don’t come up for sale very often. The Secretary General to the United Nations lives next door. Our neighbors are billionaires.”
The town house, which is listed on Truvia for $7.9 million, has a private garden with a carpet of green, flower plantings and views of the Queensboro Bridge. It seems particularly well-suited for displaying products priced between $15,000 and $300,000.
“We’re keeping the address a secret. There are security issues,” Berk said. “New York is a great place for an appointment-only showroom. A lot of our clients come to New York, but I wouldn’t let a first-time buyer in.”
Berk buys $1.5 million worth of product each month and keeps $2 million in inventory. Privé Porter has sold $39 million worth of handbags since launching four years ago.
“We know the handbags will hold their value over time,” Berk said. “The Birkin has performed better than the S&P 500. At auction, Chanel sold for 30 percent higher than products’ retail prices.”
Berk pointed out that, unlike Christie’s and The Real Real, Privé Porter is not a consignment business. “We curate handbags the way an art dealer curates an art collection. We’re looking for small masterpieces.” Sometimes collectors make a mistake, sometimes clients get tired of waiting for a handbag that they special-ordered from Hermès and sometimes someone finds an unopened box they forgot about in the closet.
When Berk started, she knew nothing about buying a Birkin handbag. “I’m not one to take no for an answer,” she said. “It didn’t take me long to learn the system. I bought a $3,000 Avalon bedspread, a Clic H bracelet and that led me to getting a Birkin. It’s a pay-for-play system. I decided to list a couple of handbags on eBay. I had a few nice bags of my own. I started doing research and saw a market for resale of luxury goods.”
About 90 percent of Privé Porter’s business is generated by Instagram. Berk claims to have pioneered Instagram and Whatsapp for selling handbags. She has more than 80,500 followers on the former. International accounts for 60 percent of sales.
On Instagram, Berk discovered a young handbag designer from the Middle East: Sofia Al Asfoor. “I told her, ‘I want to bring your bags to the U.S.,'” Berk said. “She asked if I would be interested in buying into the brand. I bought $100,000 worth of handbags from her. We did $1 million in wholesale sales with Sofia in the first year.”
Berk realized that bankrolling Al Asfoor’s business doesn’t make financial sense for Privé Porter. “For us, the natural progression will be to make our own handbags,” she said.
While Berk focuses on classics, she appreciates unusual items such as Nigel Peake’s illustrations for the Constance and the Birkin So Black, which was part of Jean Paul Gaultier’s last collection as creative director before he left Hermès in 2010.
While the large majority of her business is in Hermès bags, Berk on occasion also deals in Chanel. “It depends on the feedback I get from customers,” which include Kris Jenner, members of the “Real Housewives of Miami” and wives of NBA players.
Berk understands the subtleties of Hermès’ authentication system. A horseshoe stamped on a bag means it was a special order or custom-made. Two dots indicate that the handbag is made from niloticus crocodile skin. A caret represents porosus crocodile. Berk showed a rare forest green Kelly handbag with the horseshoe and two dot stamps, priced $52,000.
The Braise with diamond hardware, another Hermès style Berk had in her possession, sold at retail for $125,000 in 2007. Berk said she sold the handbag, which was in pristine condition, for $300,000.
“Hermès is the only one of the brands to create so many heirloom handbags,” said Berk, who ironically added, “I’ve never been into handbags.”