I can’t stop comparing the Walmart Birkin bag situation to what’s going on with the Alexander Brothers. First, we have to talk about your $10,000 leather ladies' handbag and Walmart’s $70 very similar, slightly lower quality leather ladies' handbag.
I’m not going to spend time talking about the history of Herme’s and their bag, which is the most famous handbag in the world, and some people use it as a luxury utility, while others showcase it as a piece of art. But I will mention that the handbag is a significant piece of assemblage for people who love luxury and even more so love to let the world know that they are either ones of great taste or great wealth. A few months ago, Walmart came out with an almost exact copy of Hermes’s Birkin bag. I don’t know the Birkin that well, but I’ve spoken to a few clients and friends who have the original, and have also looked at the Walmart version and say besides the quality of the stitching and the leather, it is indeed a duplicate. However, there is a very big difference. The cost of the Walmart version is about one percent the cost of the Hermes version. So I see this as the end of the Hermes Birkin, correct? I mean, if you could get the same thing for so, so, so much less, why would you spend so much more? That’s not what the largest retailers and Birkin owners are saying. I’m told that this will only increase the sales of the more expensive version. Why? I’m told that people want to own the luxury product. The fact that the everyday person can now have it only promotes the more expensive one more and tells rich people that they need to buy it to differentiate themselves from the everyday man.
I find this insane, even crazy. But it’s the society that we live in.
OK, so how does this relate to the Alexander Brothers?
For at least the last decade, the Alexander’s have been among the top brokers selling residential real estate anywhere in the world. They are known by the richest people and the biggest celebrities, and their name was associated with the most high-end properties around the globe.
For this reason, the super wealthy would be hiring them. They would feel they needed the Alexander brand and their name on the property. This was such a fact that they were able to leave the brokerage firm that spawned them. They were able to step away from Howard Luber, whom they considered a second father and a man that was solely responsible for their success in real estate. They were able to do this because their brand was so big, and everybody with money wanted to work with them.
But were they really good real estate agents? There are quotes and comments in blogs and articles recently talking about how they were difficult to work with. They often didn’t respond to requests to show their listings, and even sometimes, when they received offers, they didn’t take them seriously. I have had similar firsthand experiences.
There’s more to it when you look at the numbers. According to the RLS, which holds all the information for real estate sales in the Manhattan area, I compiled some data. The Alexander Brothers personally listed 386 properties in New York City. The average sale price of these properties was $9,839,320. Let’s see how successful they were with their listings. They were only able to sell 43% of these properties, with a total of 219 failed sales and only 167 properties that sold and closed. Their average days on the market for the properties that they sold was 204 days, which is well above the market average. According to the website urbandigs.com, as of today, the average days on the market is 87. Yes, the Alexander Brothers did deal with properties at a higher price point than the average, and it is common for higher price point properties to take longer to sell, but 204 days is longer than the average at any price point. You might be saying, "Well, they sold the most expensive ones. They focus on the super high-end properties." But that’s not true either—the average price of the 167 sold properties is $6,484,091. The average price of their 219 failed sales was $11,792,321. This tells us that their most coveted, most expensive properties, on average, failed to sell while they were able to sell their lower-priced, more discounted properties.
All in all, this is very far from the numbers that would be shown by a successful team anyway that you look at it. In my opinion, looking at these numbers and knowing how they conducted themselves in business, they were not good real estate agents.
The question comes back to why the rich needed to hire them?
It’s the Birkin bag. People felt they needed that name associated with their property. They wanted to go to dinner parties and see the Alexanders listing their home in Dubai or that they just bought a condo in Aspen with the Alexanders. It was a brand cliché game.
Now with the Alexanders going to prison for hopefully the rest of their lives for their horrendous crimes, what will the rich do? Will they realize that a brand is not really a brand and that if they hire people blindly based on the name, not only may they get a less than adequate service provider. Probably not. Right now, there are 100’s, if not thousands of agents lining up to take their places, trying to brand themselves the same way by doing little dances on TikTok or taking selfies with celebrities or selling their soles to get their picture in a magazine.
Personally, I’d rather work with the owners of the Walmart Birkin bag—those who want to save as much money for their family, their loved ones, or even a charity. The ones that use common sense when making a financial decision.
