Hermès Faces Class Action Suit Over Birkin Sales Practices

[Grand Maven]

Hermès offers a bespoke service called Special Order or HSS. If plaintiffs had the $$$ they coulda got them:

Insider's Guide to Special Order HSS Hermès Birkin and Kelly Bags

Learn everything about Hermès Special Order (HSS) Birkin and Kelly bags, from choosing colors and materials to navigating the exclusive process.

www.sothebys.com

 

[addiCCted]

Exactly. This is nothing new to them, especially when something very similar like this appeared in China almost 3 years ago

View attachment 5970948

Well good thing he has a mask on.

 

[HeartHermes]

This whole situation brought this video back to mind.

 

[themk888]

The BirkinJunky's take on this is hilarious! Love how he makes a joke out of everything 🤣

 

[880]

I read a post written by @Angiebbb in the NY thread. (I hope that is okay to quote it here since others on this thread may not have seen it.

Look at tying in antitrust laws. It wouldn’t be an easy case to prove but it would be that in essence. A typical tying arrangement is when a seller with market power for a product (the “tying” item) requires any customer buying that item to also purchase a second item (the “tied” item). The market for the tied item is usually competitive and the seller is using its market power for the first item (the "tying" item) to increase sales in the competitive market for the second item.

IMO facts in the case brought by the plaintiffs against Hermes don’t fit
(When I plug in QB and ancillary product, I mean)

It’s also questionable whether H has market power over the tying item QBs (as they are sold at varying price points and condition in many other venues;

Sales people working on commission are not requiring people to buy the tied item, in fact there is no specific tied item that will definitively yield the desired item

 

[textilegirl]

The key is 'market power'; the anti-competitive problem is that one firm has sufficient power over the defined market to coerce/require you to purchase something you don't want in order to get something that you can't get elsewhere because the market is artificially restricted. Anti-trust laws are designed to prevent market abuses, and in this case it's reasonable to conclude the relevant market is luxury handbags. Whether the plaintifs can make the case that the market in this case isn't luxury handbags but rather some other highly specialized, unique market (Hermes Berkings) remains to be seen.

In the case of a single seller of it's own products, nothing in the law requires a seller to offer it's products to everyone, they just can't deny service on discriminatory grounds without justification. (We, and the United States Supreme Court, can leave for another day the question of whether a seller is constitutionally permitted to refuse service to a homosexual couple seeking wedding cakes because it infringes on the seller's right to religious freedom.)

Once again, the disgruntled are unhappy because they cannot walk into a boutique and get a bag that everyone else wants. And so they sue, thinking that the federal courts will get them (and all their families and friends) a bag (to resell ) . Some kids still don't get enough to eat every day.

 

[scndlslv]

The BirkinJunky's take on this is hilarious! Love how he makes a joke out of everything 🤣

I am him. He is me. They're goofballs. 🤣 🤣 🤣

 

[GabrielleS]

This will be an interesting lawsuit but it’s a broader issuer for the retail and the luxury sector. It’s a niche and very complicated area of law but competition and antitrust is also an area where some government bodies can investigate and, in some cases, launch their own lawsuit.

The EU Commission was reported in the news to have raided some unnamed luxury businesses and sent requests for information last year. One company (not Hermes) was widely reported in the press though may not be accurate. The US Justice Department just sued Apple last week.

I imagine anti trust and competition are top of mind for many businesses.

 

[AnnaE]

I have been thinking about this for a bit as a business challenge.

The demand for quota bags outpaces supply. How does Hermes allocate the limited goods? They claim they want to sell them to the most loyal customers. This makes sense.

Hermes also has to account for the following challenges:
* Many customers only ever want a quota bag and nothing else.
* Resellers often flip the bag immediately after walking out of the store.
* Sales Associates don’t get commission on Birkins and Kellies.

Once again, there is one solution to these challenges: cultivate loyal customers who want more than just a quota bag.

But what makes someone a loyal customer? They have to spend the money and buy other items first. Therein lies the dilemma. There are plenty of cases where someone truly appreciates the brand by, say, buying scarves. Those people typically have no issues getting bags if they want them (I am an example of this myself, having been offered many bags before I bought even one). The spend is less of an issue for these people as well, as they have proven their loyalty (and, presumably, that they are not a reseller).

The rest of the people have to play the game of ‘I am actually a loyal customer, and I do care about these cups, but can you also give me a Birkin?’ But just like you can’t force intimacy in a friendship by just hanging out, just buying stuff doesn’t always help build that loyal customer reputation. This leads to major customer frustration, as exhibited in this lawsuit.

By the way, I am not saying that some Hermes SAs don’t take advantage of this. I speak Mandarin Chinese (and I don’t look like I would), and I have overheard conversation to that effect on many an occasion. It’s certainly a more acceptable practice in some cultures. But Hermes does explicitly prohibit the practice, and it is a fireable offense.

 

[cravin]

I have been thinking about this for a bit as a business challenge.

The demand for quota bags outpaces supply. How does Hermes allocate the limited goods? They claim they want to sell them to the most loyal customers. This makes sense.

Hermes also has to account for the following challenges:
* Many customers only ever want a quota bag and nothing else.
* Resellers often flip the bag immediately after walking out of the store.
* Sales Associates don’t get commission on Birkins and Kellies.

Once again, there is one solution to these challenges: cultivate loyal customers who want more than just a quota bag.

But what makes someone a loyal customer? They have to spend the money and buy other items first. Therein lies the dilemma. There are plenty of cases where someone truly appreciates the brand by, say, buying scarves. Those people typically have no issues getting bags if they want them (I am an example of this myself, having been offered many bags before I bought even one). The spend is less of an issue for these people as well, as they have proven their loyalty (and, presumably, that they are not a reseller).

The rest of the people have to play the game of ‘I am actually a loyal customer, and I do care about these cups, but can you also give me a Birkin?’ But just like you can’t force intimacy in a friendship by just hanging out, just buying stuff doesn’t always help build that loyal customer reputation. This leads to major customer frustration, as exhibited in this lawsuit.

By the way, I am not saying that some Hermes SAs don’t take advantage of this. I speak Mandarin Chinese (and I don’t look like I would), and I have overheard conversation to that effect on many an occasion. It’s certainly a more acceptable practice in some cultures. But Hermes does explicitly prohibit the practice, and it is a fireable offense.

Just a couple comments.

Availability of quota bags is less than demand because H deems it so (ala DeBeers). If H wanted quota bags to be sold to whomever walked into a store, I’m sure that they could make it happen. It’s now down to the science that H has formulated of demand outgrowing “supply”.

That being said, they don’t flood the market because of this market based scarcity and drive to owning one. It’s a brilliant business strategy. That doesn’t mean that what they do is illegal. Plenty of channels to buy one if that’s all that you are interested in. I cannot think of many more luxury brands where everyone knows your name and the shopping experience is so personalized. The “prize” of being offered a $13k bag (think about the insanity of that comment) is just a cherry on top for the customers that love the brand. For those that just want a Birkin, I’d be willing to bet that over 50% just flip them because of lack of appreciation of the brand and their ability to make a quick buck. This is why H does what it does.

 

[FrenchNewbie]

I wonder if the Hermès folks who wrote the "we promise we don't practice tying, we promise we don't make sales of bags conditional on the purchase of other products" policy could even finish writing it before erupting in laughter.

 

[haute okole]

The problem with these Plaintiffs is that they allege that Hermes is the only place consumers can buy a Birkin. They are using Federal Antitrust laws as an excuse to sue Hermes because they are not getting their Birkin NOW, Right now when they want it. Hermes is not the ONLY place consumers can buy a Birkin. Their complaint is PATENTLY FALSE. Hermes is not stopping them or anyone else from buying an authentic Birkin from Sotheby’s, Facebook, Madison Avenue Couture, your best friend, etc. Plaintiffs are suing Hermes because they cannot buy a Birkin from Hermes. What is next? Suing Tesla because I cannot buy a CyberTruck directly from Tesla? Sure, I can buy one from a reseller now at 4x the price, but I don’t want too. Plaintiffs may get their Birkin one day, but they are too impatient and entitled to wait their turn.

 

[Grand Maven]

This whole situation brought this video back to mind.

The comments mention she says "They treat you like ****, but in a sophisticated way". That ain't true if you're high on the food chain.

 

[OnlyModa]

Here is an aspect that has not been discussed so far, I do not think. How are they going to identify the affected class? I have gotten random $5 checks from Facebook and Six Flags after some class action settlements as I was identified as a member of class because I was a user/customer. Here they are trying to identify someone who wants an item and someone who does not have something. At this point anyone- literally the entire population of this planet- can claim to be affected. Even those who already own a bag can claim that they could not get another one or that they had to pre-spend. It is Hermes vs the Earth bwahahah. Actually, vs the Universe. I bet there are some Aliens who wanted the bag and couldn't get it. They were forced to buy men's clothing from the Robot line but they were not allowed to wear anything that had pictures of their elders as part of the design. (Funny? Too much? I am not sure about the last line)

 

[Grand Maven]

Here is an aspect that has not been discussed so far, I do not think. How are they going to identify the affected class? I have gotten random $5 checks from Facebook and Six Flags after some class action settlements as I was identified as a member of class because I was a user/customer. Here they are trying to identify someone who wants an item and someone who does not have something. At this point anyone- literally the entire population of this planet- can claim to be affected. Even those who already own a bag can claim that they could not get another one or that they had to pre-spend. It is Hermes vs the Earth bwahahah. Actually, vs the Universe. I bet there are some Aliens who wanted the bag and couldn't get it. They were forced to buy men's clothing from the Robot line but they were not allowed to wear anything that had pictures of their elders as part of the design. (Funny? Too much? I am not sure about the last line)

😂😂😂😂