Hermès Faces Class Action Suit Over Birkin Sales Practices

[MonsoonBirkin]

I don’t believe it was a “calculated business decision by Hermes” but I’ve no doubt that once it appeared to develop Hermes was more than willing to exploit it.

Thanks for sharing your thoughts.

To ask a follow-up: do you believe that Hermes artificially restricts its supply of QBs? And if so... how could the customer have been the one to start the prespend if the company is, and has always been, the one controlling how many bags are in the store at any given time?

Also:

In many circles monetary largesse means access. This is not news except some people think that flashing cash will get them what they want (at Hermes, a Berking so they can flex further ).

So... customers started the prespend game, but then Hermes belatedly realized that monetary largesse means access, so they later wielded that to perpetuate the quota bag system?

 

[haute okole]

I just want to make sure I understand your position: are you stating that you wonder if customers were the ones who invented prespend and drove up the buy-to-QB ratio, rather than it being a calculated business decision by Hermes?

Also just want to clarify on what you're saying here:


While your SA stated this, do you personally believe this? Because if so, does that mean you believe--as their company rule and practice--that rude people who spend a lot of money in the store rarely get bags, and polite people with little to no prespend often do?

Those are interesting positions that I've never heard before, and I just want to make sure I'm not twisting your interpretation here.

Oh no, absolutely not. I truly believe that people have experienced pressure to spend more to acquire QBs by SAs. I would be truly POed if I had been the recipient of this type of behavior at a store where I would expect luxury service. So for anybody who has experienced tying pressure, I have empathy and understand the outrage. I consider myself very, very lucky that I have not had to put up with that pressure at my local store. But I also have a very Senior experienced SA who has a lot of experience in luxury sales prior to working at Hermes. I was a TPF reader long before I was an Hermes consumer and knew about prespend from this forum. So my personal awareness of prespend comes from here and from anecdotal stories, but not personal experience at BH. I know I am so lucky. But the stories that I have heard, had they happened to me would make me feel …. Ew.

My SA was responding to my question when I witnessed someone barge into our appointment, point her finger at him and tell him not to forget her. I asked him if that type of pressure works for him, will that client get a bag. He said not for him. For him, all it takes is kindness to get a bag offer from him.

 

[papertiger]

I personally can honestly say that I have never been encouraged to buy more to get a bag by my Hermes SA or anyone affiliated with Hermes. I have a 10+ year relationship with my local Hermes boutique, never been lucky at FSH, but own several QBs from my local, US based store. I am curious if people have bought more because they have heard from others, including reading TPF, that prespend was a prerequisite to obtaining a desired QB? How many people have purchased more because they have heard prespend was required, not directly from someone employed by Hermes, but from others ie., other Hermes consumers, blogs or forum readers but not directly from Hermes?

I have never been 'encouraged' to buy a single thing, not as a means to buy a bag nor anything else.

I find this class action ridiculous. There are many other brands of bags and luxury goods, no one has to buy an H bag (nor anything else in order to obtain one).

 

[MonsoonBirkin]

For him, all it takes is kindness to get a bag offer from him.

Thanks for sharing (and I'm sure your DMs will now be full of people wanting your SAs contact )

Here's what I don't get, though: Store managers have to be the ones to approve of bag offers... but they also don't ever meet the customers to know who's nice and who's not. And considering Dumas himself said bag offers go to loyal clients, how can SMs be sure who's loyal and who's not if they've never met the client and have only seen their spending profile? If loyalty = niceness, which only the SA can determine, then I don't understand the role of an SM having to approve the bags?

And also, that SA has colleagues. Considering stores are under pressure to meet quotas (if we're to believe other members, anyway), are some SAs allowed to give offers based only on niceness without taking spending into account? Is the store divided into SAs who take into account spending to make corporate happy, while others like yours don't? If so that's great, and it's wonderful to know that there are some SAs exempt from the difficulty of meeting sales benchmarks. I'll bet it's a lot for the others to carry, but that's cool to know they exist.

 

[acrowcounted]

I'm not sure why some people have such a hard time understanding this but it seems to be a common sticking point for folks in the relationship/presepnd threads as well. Hermes US has never had a set of "prespend numbers" where a client could come in to the store, ask their SA for bag A, the SA pulls up their profile to verify if client has meet the X predefined prespend amount for bag A, and then the bag is either approved or not. This is not how Hermes works.

One's profile is certainly a quantitative way to quickly summarize the relationship but its not a "does she qualify" yes/no assessment. Instead, Hermes strives to be somewhat fair in its allocation of the most coveted items. Its why they invented their quota system to ensure that the same few people aren't getting all of the best items (and they've had quotas on things other than bags; rodeos and chypres come most easily to mind). Spending history, particularly, is used to gauge how much one has spent, how long they've been waiting, what other comparable items have they been offered, how often they are in the store, etc

When it comes time to sell a bag, the manager will take all of this info, for the nominated clients, into account and try to be fair in her allotment. In fact, its not always the person with the most/best spend that gets the bag. Often times a decent amount of priority is put on the fact that client A is standing in front of me and won't be back in town for another six months so even though client B is local and has spent twice as much, she comes in every week so can much more conveniently be offered the next bag. SAs also are very aware of the competition levels of their own stores so I'm sure there are times when it feels like "my SA didn't nominate me for a bag because I haven't meet the threshold" where in reality its just that the SA knows that the client won't hold a candle to the competition so its not worth the bother to nominate them. In this way, I would agree with the notion that "clients have created the term prespend". There's just so much more to getting a coveted offer than purely spend and I wish people would stop trying to dumb it down to one hard variable. Being kind and being a favored client in general can go a long way.

 

[lallybelle]

Hmm...interesting thread. I wonder how this will go. How do they PROVE that this is general H practice. If we are being honest, it's mostly a wink nod. Encouragement of loving other things from the brand etc.

I've been on tPF for a long time now and haven't been a H customer for long but I have long read/heard varies stories here and social media. It really does seem it's some luck and different rules all over the world For example I believe some countries still have wait lists and the US does not.

While we can't say it's official H policy, we all know the stories of prespend and waiting, even if it's not everyone's experience. I get the frustration of the ladies participating in the suit. But hey, no one is owed anything. H can set it's policies. And aren't valued customers usually always prioritized everywhere?

 

[acrowcounted]

Thanks for sharing (and I'm sure your DMs will now be full of people wanting your SAs contact )

Here's what I don't get, though: Store managers have to be the ones to approve of bag offers... but they also don't ever meet the customers to know who's nice and who's not. And considering Dumas himself said bag offers go to loyal clients, how can SMs be sure who's loyal and who's not if they've never met the client and have only seen their spending profile? If loyalty = niceness, which only the SA can determine, then I don't understand the role of an SM having to approve the bags?

And also, that SA has colleagues. Considering stores are under pressure to meet quotas (if we're to believe other members, anyway), are some SAs allowed to give offers based only on niceness without taking spending into account? Is the store divided into SAs who take into account spending to make corporate happy, while others like yours don't? If so that's great, and it's wonderful to know that there are some SAs exempt from the difficulty of meeting sales benchmarks. I'll bet it's a lot for the others to carry, but that's cool to know they exist.

SAs nominate select clients. SMs decide who gets it. SMs also tend to meet the clients who are there often and over many years, its not like they are living in a vacuum.

I don't think @haute okole was arguing that spend doesn't matter at all, just that its not the single contributing factor nor a "tit for tat" variable. Also, I'm sure @haute okole has never been pressured to buy more...but I'd also hypothesize that she spends more than enough without ever having to be asked to do so. And in addition she is lovely, so it is of no surprise to me that she is successful in her journey.

Again this lawsuit isn't about the question of "does Hermes US prefer to sell coveted items to known repeat clients?" I don't think anyone is arguing against the fact that the answer to that is "in most cases, yes". This lawsuit is alleging that Hermes participates in an illegal "tying" scheme of promised "if you buy THIS, I will also sell you THAT" and in my experience, that is just not how Hermes operates (and frankly Hermes would be easier to work with if it WAS that way. In fact many of the other threads are newbies trying to figure out exactly what the THIS is to get them the THAT and time and time and time again people explain to them that there is no THIS because that's not how any of this works.)

 

[HeartHermes]

I'm not sure why some people have such a hard time understanding this but it seems to be a common sticking point for folks in the relationship/presepnd threads as well. Hermes US has never had a set of "prespend numbers" where a client could come in to the store, ask their SA for bag A, the SA pulls up their profile to verify if client has meet the X predefined prespend amount for bag A, and then the bag is either approved or not. This is not how Hermes works.

One's profile is certainly a qualitative way to quickly summarize the relationship but its not a "does she qualify" yes/no assessment. Instead, Hermes strives to be somewhat fair in its allocation of the most coveted items. Its why they invented their quota system to ensure that the same few people aren't getting all of the best items (and they've had quotas on things other than bags; rodeos and chypres come most easily to mind). Spending history, particularly, is used to gauge how much one has spent, how long they've been waiting, what other comparable items have they been offered, how often they are in the store, etc

When it comes time to sell a bag, the manager will take all of this info, for the nominated clients, into account and try to be fair in her allotment. In fact, its not always the person with the most/best spend that gets the bag. Often times a decent amount of priority is put on the fact that client A is standing in front of me and won't be back in town for another six months so even though client B is local and has spent twice as much, she comes in every week so can much more conveniently be offered the next bag. SAs also are very aware of the competition levels of their own stores so I'm sure there are times when it feels like "my SA didn't nominate me for a bag because I haven't meet the threshold" where in reality its just that the SA knows that the client won't hold a candle to the competition so its not worth the bother to nominate them. In this way, I would agree with the notion that "clients have created the term prespend". There's just so much more to getting a coveted offer than purely spend and I wish people would stop trying to dumb it down to one hard variable. Being kind and being a favored client in general can go a long way.

I agree with all of this! Another variable that I think people forget is that Client A may be asking for a specific bag in a specific color, a specific hardware and a specific size, where Client B may be willing to take any of a variety of colors, hardware or sizes, thus making it easier for their SA to offer them a bag much sooner. I'm the Client A type, so I always expect it to take longer before I'm offered my wish list bag. There are so many variables that a store has to work through. I love many of the products that Hermes makes, so I don't mind the wait since I'm often shopping from other departments and just enjoying the whole experience.

 

[textilegirl]

Thanks for sharing your thoughts.

To ask a follow-up: do you believe that Hermes artificially restricts its supply of QBs? And if so... how could the customer have been the one to start the prespend if the company is, and has always been, the one controlling how many bags are in the store at any given time?

Also:



So... customers started the prespend game, but then Hermes belatedly realized that monetary largesse means access, so they later wielded that to perpetuate the quota bag system?

Hmmm, 'artificially' is a tough question because there's a balance for any organization that produces goods; how quickly should you ramp up to meet immediate demand vs opting for steady growth. I believe in Hermes' estimation slapping up workspaces and hiring and fast training tons of people wasn't going to result in a product they were willing to sell. DeBeers can stockpile huge amounts of diamonds in part because they're small; if we learned of a secret warehouse with seriously large quantities of BCKs I might feel differently. Were they too slow in ramping up production? I don't know, and as we know, they have a different corporate culture than many corporations here in the US. Even with machine stitching, it still takes a worker a bit of time to produce a bag that will pass quality control; could they manufacture more with different methods? Sure, but I don't think that would be the BCK that most people want. (Not getting into the machine vs hand saddle-stitched discussion here.)

Hermes has always been "controlling how many bags are in the store at any given time". I believe they send what they produce to boutiques around the world as they are made and to meet whatever marketing goals they may have -- here I mean that, for example, when the Madison Flagship was re-opened and the company wanted to make a splash, a lot of product that could have been allocated to other boutiques went to Madison. Or for example, if you compare the available SLGs on the website serving China, you'll see there are many, many more available to those customers than are available in the US. (I was looking for a wallet a while ago and found this to be the case; I'm not sure how things stand at this moment.) I wasn't happy that I couldn't buy a wallet (or at least I wasn't willing to invest time or money in a work-around), but I also wasn't about to sue Hermes because they decided to stock the China website better than the US site.

I'm not sure what you're asking when you say that Hermes wielded the notion that monetary largesse means access to perpetuate the quota bag system. We seem to have codified these terms like 'prespend' and 'quota bag system' like they are new concepts. I don't think they're new at all, they're just what we in the Hermes' obsessed world call 'how to suck up' to Hermes to get something that everyone, by definition, can't have. Am I missing your point?

 

[Grand Maven]

No, nor will they. Hermes won't acknowledge this more than absolutely necessary and directly to the courts.

What are the possible stances Hermes will take? Settle with plaintiffs so that their Hermes internal policies are not publicly revealed? Fight them all the way to court? Try getting the case dismissed? Try getting the plaintiffs unable to financially pursue it?

 

[haute okole]

What are the possible outcomes Hermes will take? Settle with plaintiffs so that their Hermes internal policies are not publicly revealed? Fight them all the way to court? Try getting the case dismissed? Try getting the plaintiffs unable to financially pursue it?

This is just my speculation because I am not affiliated with Hermes or their attorneys. I am familiar with Corporate defense litigation and typically Hermes will have an insurer who will hire litigation counsel. Plaintiffs have no attorneys fees because their attorneys appear to be contingency fee attorneys and will only collect a fee when/if they win. The Plaintiffs attorneys collectively would take 33 1/3% of the award pre trial. If there is a judgment after trial commences, Plaintiffs attorneys are entitled to 40% of the judgement. Plaintiffs, the two individuals so far, are responsible for all costs such as filing fees, photo copying costs, depositions costs, etc. Costs can be substantial and anybody who joins this class should be aware that they will shoulder costs. If plaintiffs lose, the plaintiffs must pay the cost of litigation and Hermes’ attorneys fees.

Hermes insurers will pay for the defense of the case and money awarded to Plaintiffs if the claim and award are covered claims under the insurance. Insurers typically recommend settling a case for “nuisance value” just to get rid of a case because the cost of litigation is burdensome even when Plaintiffs have a meritless Complaint. In a Federal Action, I would not be surprised if Hermes’ insurer recommends settling the case for $50k just to make the case go away. I also would not be surprised, given the publicity, that Hermes would rather fight for a dismissal.

Edit to add, Hermes trade secrets are not discoverable and that will be a whole separate fight if Plaintiffs fight the trade secret issue. Business practices that are not trade secrets are discoverable.

 

[acrowcounted]

What are the possible stances Hermes will take? Settle with plaintiffs so that their Hermes internal policies are not publicly revealed? Fight them all the way to court? Try getting the case dismissed? Try getting the plaintiffs unable to financially pursue it?

I think any big corporations' playbook is: try for a dismissal, if that doesn't work delay, delay, delay hoping the plaintiff will lose interest/their lawyers will push for lower and lower settlement rates just to be done with it, while continuing to ask for dismissals for whatever reason they can gin up. The ending really comes down to how much leeway the court is willing to give the plaintiffs. Much of the "juicy stuff" that haters are hoping to see from Hermes being forced to release company records at Discovery is a naive fantasy imo and not applicable to proving the plantiff's case. (Akin to a court giving me 100% access to your last 10 years of tax returns and all bank accounts in Discovery just because I'm suing you for $5 I lent you for a cup of coffee that one time.) However, if H were to get a very unfavorable judge who was willing to force their hand, then H would be more likely to settle for higher amounts to forestall the Discovery.

 

[haute okole]

I think any big corporations' playbook is: try for a dismissal, if that doesn't work delay, delay, delay hoping the plaintiff will lose interest/their lawyers will push for lower and lower settlement rates just to be done with it, while continuing to ask for dismissals for whatever reason they can gin up. The ending really comes down to how much leeway the court is willing to give the plaintiffs. Much of the "juicy stuff" that haters are hoping to see from Hermes being forced to release company records at Discovery is a naive fantasy imo and not applicable to proving the plantiff's case. (Akin to a court giving me 100% access to your last 10 years of tax returns and all bank accounts in Discovery just because I'm suing you for $5 I lent you for a cup of coffee that one time.) However, if H were to get a very unfavorable judge who was willing to force their hand, then H would be more likely to settle for higher amounts to forestall the Discovery.

Oh Jeez, I am getting a stomach ache thinking about it. Getting to trial is not like TV. The civil cases that I litigated took an average of four years to finally getting to the point where I picked a jury. These two will get their Berking before they get to trial. That is why I say this is a shakedown.

 

[MonsoonBirkin]

SAs nominate select clients. SMs decide who gets it. SMs also tend to meet the clients who are there often and over many years, its not like they are living in a vacuum.

I don't think @haute okole was arguing that spend doesn't matter at all, just that its not the single contributing factor nor a "tit for tat" variable. Also, I'm sure @haute okole has never been pressured to buy more...but I'd also hypothesize that she spends more than enough without ever having to be asked to do so. And in addition she is lovely, so it is of no surprise to me that she is successful in her journey.

Again this lawsuit isn't about the question of "does Hermes US prefer to sell coveted items to known repeat clients?" I don't think anyone is arguing against the fact that the answer to that is "in most cases, yes". This lawsuit is alleging that Hermes participates in an illegal "tying" scheme of promised "if you buy THIS, I will also sell you THAT" and in my experience, that is just not how Hermes operates (and frankly Hermes would be easier to work with if it WAS that way. In fact many of the other threads are newbies trying to figure out exactly what the THIS is to get them the THAT and time and time and time again people explain to them that there is no THIS because that's not how any of this works.)

I think most people distill the conversation down to spending because of the belief that, generally speaking, it is the most heavily weighted factor for a bag offer. Is that something you disagree with? And as you implied (correct me if I'm wrong since I def don't want to put words in one's mouth) is the pressure SAs place on clients to spend in certain depts a myth?

I'd appreciate @haute okole further clarifying her position because she shared the words of an SA that did make it sound like spending was not at all a factor. Kindness was the sole factor for that SA. If I've misunderstood this and it was a turn of phrase, then I welcome any correction, there.

I also wonder what you meant by "fairness" as it relates to H's B/K allocation as you said in an earlier comment. Can you cite any example of an Hermes practice that you say is "fair" that isn't ALSO a good business decision? And when a fairer system exists altogether--including the one promoted by the lawsuit of laying out any available items on the floor for any customer willing to pay the price... is that really an apt word for its corporate ethos? Pre-emptorily going to say that H has no obligation to be fair (pending lawsuit not withstanding). You used the word, though, and I'm interested in your choice of it.

 

[umamanikam]

I would not be surprised if US introduces the wishlist system like Europe ,that way they are not obliged to give the bag to anyone .There are many clients in UK who are still waiting for their first bag for 3 + years .