Hermès Faces Class Action Suit Over Birkin Sales Practices

[cravin]

This makes sense as a corporate policy. Yet, anecdotally, high traffic stores (Beverly Hills, Madison, San Francisco, Seattle, etc.) are considered, at least on tPF, to be more competitive.

How could both be true at the same time? If higher revenue stores get allocated more bags, theoretically it shouldn't be any harder to acquire bags there?

This is just my personal observation. We used to shop in a small store in Connecticut. On a “busy” Saturday, when we walked in, there may have been 20 customers total in the store at one time.

On a “busy” Saturday a few months ago, we stopped into Madison Avenue. There must have been at least 300-400 people in the store. Every floor was packed.

So now let’s say Greenwich store receives one bag for every 10 that Madison does, you’re still not blowing away the demand with supply. Also, folks travel to visit Madison as a part of destination travel to NYC, while Greenwich serves local clients.

 

[benjinito]

These are some good points.

One way I can see the system making sense/being true is under two circumstances. Both of them assume that the repeat, local, high spenders subsidize those with a lower spend.

1) Tourists can walk out with a bag after one or two shopping trips in which they spend 1:1 or 1.5:1, which is still high but less than locals who have to spend, say, 2:1 or 3:1. This might be why we hear in non-touristy and probably lower sales stores, "we show loyalty to our local customers." Where sales are low, I don't think stores get the liberty of sending bags out the door with low/no prespend. Again, I believe it'd send up red flags to management/HQ that there's resale collusion going on.

and

2) In these stores compared to elsewhere, Hermes gives newer clients their first bag with a much lower average spend. They then pay out the nose to aquire bags 2, 3, and so on. Or, a customer doesn't come bag to pursue bag 2 because they're happy with the one. Either way, more bags go out, but there's still an expectation of a higher average prespend.

Still, it wouldn't surprise me if Hermes made some adjustments with its bag allocation system to align with the cost of living standards. In other words, if they said along hypothetical lines of, "NY stores, you have to get $25k in sales for a bag because a $100 twilly is nothing for a person making $200k a year, but in Denver where the average salary is $80k and that purchase is more impactful, they'll get a bag for every $20k in sales." While there are billionaires in every city, I don't think there are enough that the company foregoes catering to the middle-upper class, who still have a degree of price sensitivity towards luxury goods.

I think its because higher revenue stores have a long list of loyal clients and also high spenders who had been shopping there for years (hence the higher revenue store). Bigger stores have more stocks but is also a lot more competitive. If smaller stores have 50 bags per shipment and 500 clients, im assuming its 5 or 10x more for bigger stores so it doesnt change the wait time for bags as well unless you walk it under the right circumstances.

This is just my personal observation. We used to shop in a small store in Connecticut. On a “busy” Saturday, when we walked in, there may have been 20 customers total in the store at one time.

On a “busy” Saturday a few months ago, we stopped into Madison Avenue. There must have been at least 300-400 people in the store. Every floor was packed.

So now let’s say Greenwich store receives one bag for every 10 that Madison does, you’re still not blowing away the demand with supply. Also, folks travel to visit Madison as a part of destination travel to NYC, while Greenwich serves local clients.

So we're suspecting that high-traffic stores get more bag allocations, but not directly proportional to their revenue. As in, Madison can bring in 10x the revenue of Connecticut but doesn't get 10x more bags... Which (if true) is an ... interesting choice from Hermes corporate

Cost of living could be a factor in the US, but internationally, we know that's not the case since some smaller countries (like Vietnam) have astronomical spend requirements.

 

[kbluebutterfly]

So we're suspecting that high-traffic stores get more bag allocations, but not directly proportional to their revenue. As in, Madison can bring in 10x the revenue of Connecticut but doesn't get 10x more bags... Which (if true) is an ... interesting choice from Hermes corporate

Cost of living could be a factor in the US, but internationally, we know that's not the case since some smaller countries (like Vietnam) have astronomical spend requirements.

Let's assume smaller stores have 1000 clients and get in 10 bags per shipment, and bigger stores have 2,000 clients and get in 20 bags per shipment. Its still the same concept so i think supply and demand is still not affected.

 

[papertiger]

Let's back to the topic of the thread now please, TY