Hermès Faces Class Action Suit Over Birkin Sales Practices

[addiCCted]

The crux of the complaint is not focused on discrimination or a shortage of BKC stock.

I was specifically responding to the OP that said Hermes is lying bc they have bags in the back that they withhold from selling to anyone that asks. But if they’ve already been spoken for, then they’re not really available. Not related to the suit complaint.

The argument is focused on the extent to which Hermes’s prespend requirement is anticompetitive as a marketing strategy.

Even if Hermes explicitly said “ you have to spend 2,3,40k before you get offered a bag”, is that anticompetitive? That assumes everyone stops buying everything else just to spend at Hermes. Is that the case?

If there were no implied or explicit prespend threshold to get a QB, what would Hermes’s sales figures look like?

How much lower would demand be for non-leather products if Hermes did not utilize prespend?

I’m not sure as a consumer how that is relevant. As a business strategy, it’s amazing that their one iconic bag has that much pull to raise everything in the whole brand. That is itself remarkable.

As a consumer, I have multiple choices. If I don’t want to buy anything else from the brand, I buy second hand. If I don’t mind “playing the game” I shop the boutique. It’s really not that complicated. If I don’t like the markup from secondhand, I don’t buy.

Now if tables were reversed and I had a super hot commodity that everyone wanted to buy from me, is it wrong that I try to maximize my profits as much as the market will support?

For others that said they’ve spend 4,5x and still haven’t gotten a bag, isn’t that more evidence of the lack of tying ?

 

[880]

Men would generally never think about filing a lawsuit like this, but they could 😅😅😅 Although I think with watches is different because they are not asking/expecting you to “build your profile.” If you buy other entry level watches, great, more chances of getting the better ones. Although I hear that a lot of ADs do require purchase of less desirable watches to offer more desirable ones.

DH and I are relative newcomers to fine watches (in the sense that there are those who have many many more complications and brands in their collection). But it’s been my very limited experience walking into VC; AP; PP; Alange; JLC; watches of Switzerland; that certain watches are unattainable without a purchase history of more than one (and that first one can be high five figures)

More than one SM and SA of these watch companies have told me that the number of women collectors are rising. So I think watch and car companies will be watching this case closely even if the actual complaint lacks legally sufficient claims.

In the US, I’ve never personally experienced an SA even hinting buy x to get y. But, I do know from hearing about such accounts that this would be considered a firing offense. As part of all this, it may be a small point, but plaintiffs also brought up issues re the commission system. I just don’t think that these allegations really work for luxury products. JMO of course

 

[Angiebbb]

But if they’ve been allocated they’re not really available for purchase. Much like an empty table that is reserved at a restaurant. Is that table really available? Is it fair that I’m at the restaurant and that person isn’t there but they’re keeping that table open for them?


Maybe it depends? Since they reserved it months ahead? Or maybe they go there way more often than I do so they get perks?

It does not work like a restaurant. If you spend $40k at once, you will leave the store with a QB or one will be offered to you shortly after. If you spend 10k in one trip, that might happen or not. Those bags were not allocated to anyone. They are just sitting there and that day they are finding new homes. I’ve heard that at a store in Paris and have heard of many cases in the U.S. If you spend 40k, you will get a bag. If you spend 3-5k here and there, someone needs to advocate for you. That said, if the SA is new at the store, you have more chances of getting a QB with less prespend. If you get a senior SA, more likely than not you will have to spend much more money before you get a QB. My friend spends at least a million dollars at Hermes a year in different countries. When she started buying at Madison last year, her SA even said to her. “There is no point in lying to you, you know how it works. I can offer you a K28 today, but I won’t be able to offer you a MK even if there are 20 in stock bc we save those for local clients. This year I won’t be able to offer you another bag, but next year I will.” She spent less than 5k and got the bag. She came back right after and bought exotic shoes, and her SA mentioned her manager was happy she had returned. She didn’t buy anything else and is getting another bag in May. She mentioned she was a good client but they don’t know how much she spends out of the US. Her SA was new to the store.

 

[Angiebbb]

DH and I are relative newcomers to fine watches (in the sense that there are those who have many many more complications and brands in their collection). But it’s been my very limited experience walking into VC; AP; PP; Alange; JLC; watches of Switzerland; that certain watches are unattainable without a purchase history of more than one (and that first one can be high five figures)

More than one SM and SA of these watch companies have told me that the number of women collectors are rising. So I think watch and car companies will be watching this case closely even if the actual complaint lacks legally sufficient claims.

In the US, I’ve never personally experienced an SA even hinting buy x to get y. But, I do know from hearing about such accounts that this would be considered a firing offense. As part of all this, it may be a small point, but plaintiffs also brought up issues re the commission system. I just don’t think that these allegations really work for luxury products. JMO of course

I did witness that. The SA was showing me lamps when I never asked to see them, and kept hinting at getting jewelry for a major event. It was not a passing by “look how beautiful this lamp is.” I was taken to more than one lamp without requesting it and the person spent time showing me how they worked. What was I going to say? It was clear I wasn’t there for lamps. 😆

 

[sosauce]

I was specifically responding to the OP that said Hermes is lying bc they have bags in the back that they withhold from selling to anyone that asks. But if they’ve already been spoken for, then they’re not really available. Not related to the suit complaint.



Even if Hermes explicitly said “ you have to spend 2,3,40k before you get offered a bag”, is that anticompetitive? That assumes everyone stops buying everything else just to spend at Hermes. Is that the case?





I’m not sure as a consumer how that is relevant. As a business strategy, it’s amazing that their one iconic bag has that much pull to raise everything in the whole brand. That is itself remarkable.

As a consumer, I have multiple choices. If I don’t want to buy anything else from the brand, I buy second hand. If I don’t mind “playing the game” I shop the boutique. It’s really not that complicated. If I don’t like the markup from secondhand, I don’t buy.

Now if tables were reversed and I had a super hot commodity that everyone wanted to buy from me, is it wrong that I try to maximize my profits as much as the market will support?

For others that said they’ve spend 4,5x and still haven’t gotten a bag, isn’t that more evidence of the lack of tying ?

I think you are confusing that which is necessary and that which is sufficient in your last sentence. The allegation is that the prespend is a necessary condition for getting a Birkin.

Anyway, if prespending is a requirement of getting a bag, then it could be demonstrated by using sales data. Just make a bell curve plotting how much money customers spend before getting their first quota bag. If the figure is closer to zero dollars, then there would be a lot of evidence supporting the lack of tying. If it’s closer to $10,000+ then the evidence would suggest some type of spending requirement.

Then you can follow up qualitatively by interviewing customers and asking if they would have spent as much as they did on nonleather products if there were no prespend. You could also then forecast what the company’s sales would look like if there were no tying.

In terms of you yourself being sued or found liable for using tying. This would depend on how much extra money you were extracting from the market. As with most things, all business strategies all have limits in terms of what is the legally permissible range.

Let’s say Apple makes the most desirable iPhone in the world, but everything else they make is junk. If the company required customers to purchase an Apple t-shirt, Apple sofa, and Apple blender in order to buy an iPhone, then companies in those other industries might say it is unfair to the market. This would be compounded if customers said they only wanted the iPhone and didn’t see the use of an Apple blender or sofa.

 

[MonsoonBirkin]

But if they’ve been allocated they’re not really available for purchase. Much like an empty table that is reserved at a restaurant. Is that table really available? Is it fair that I’m at the restaurant and that person isn’t there but they’re keeping that table open for them?

I hear the table analogy a lot, but is it an apt one when all of the other tables are generally available for purchase under a transparent system (unlike Bs and Ks)? One can also make a reservation for a table at a later time (even if it's months in advance) and they know they can get it. Plus, the overall system is based on a first-come, first-serve basis. One is also allowed visually see the tables and chairs with the little "reserved" signs to actually confirm the quantity. They do on occasion sit VIPs immediately and they bypass the line. But that's not the overall system--all the seats aren't handled in this way. Even at snotty nightclubs people can at least wait in line. So nobody denounces the table reservation system as unfair for these reasons--it's a generally fair, transparent and understood model. There are so many divergences from the restaurant reservation system to the H bag system that the analogy fails, imo.

 

[QuelleFromage]

It's amazing that a class action suit filed by a batch of lawyers who literally make their living by filing frivolous suits on contingency has gotten this much attention - in the media and here.

It's NOT tying bc there's no specific items bundled together, and it's certainly not Cartwright. It's completely frivolous, but apparently makes great clickbait.

As has been noted many many times in this thread, you can't buy the most desirable models from Rolex, Mercedes, Ferrari, Tesla etc etc etc unless you have a relationship with a store/dealer/the company. You can't even buy coveted wines if you're not on a long-term customer list (and yes wineries have purchase requirements to stay on the list).

It's silly, and the worst thing about it is that it exposes the ugliness of what people actually think (like "someone who lives near South Central isn't a likely Hermes customer" 🤯 or all the nasty comments in the media about Hermes customers and "eat the rich").

H won't issue a statement because 1) they almost never do and 2) it's standard PR practice to refrain from comment on class actions.

In the end this is just more mythmaking for Hermès. More articles saying that Birkins cost $100K. More perception that it's the most elite bag in the world. It'll either be great for the brand or reduce it further to a symbol of conspicuous consumption.

 

[MonsoonBirkin]

But if they’ve already been spoken for, then they’re not really available.

But if I can go in, buy a 30k couch and take a bag that the SA had in mind for Karen... is it really spoken for? Also, how is it possible for bags to be spoken for if SAs cannot hold bags for customers longer than 24 hours or so?

Given this, I too believe that yes, Hermes lies when they say "not in stock."

 

[Angiebbb]

Ages ago, Hermes in the US was also on the waitlist system (at least that's what I heard) just like some of the European countries. Generally, the US luxury market is much larger than all of eruopean markets combined, and my guess is that they had to do something to make their bags available to their clients who are consistently shopping at Hermes. The waitlist probably got way too long even back then, and they moved to the current system of whatever it is that they're doing, and now we are here with so many ppl suddenly wanting a b/k. If I remember correctly, the b/k chase exploded during the pandemic, and with the leather school math, of 200 ppl being hired a year, it's been 4 yrs since 2020, we are only now at +200 ppl who are qualified to make b/k on their own, after 4 yrs of the demand explosion. Lets just assume that 100 of them are fully dedicated to making b/k, it takes 5 weeks on average (I recall something like 4 wk on b production and 6 wk on k production) plus the month off in August, that's about 2000 more bags a yr that now gets produced for b/k. We have waaaaaaay more than 2000 ppl who are now chasing b/k. It's not scalable for Hermes.

Yes I do think they're willing to give anyone who wants a b/k if they could. And that's evidenced by some of the anecdotes I've been reading online about how some seem to be getting their first qb on a very light prespend (like 5k). They often ask their SA how they got their qb so quick, most quoted their SA telling them the maison wanted to give chance to new customers to experience their most coveted bags. Even the plaintiffs in this lawsuit each got a bag is what I read. I get that there are ppl who reached 5:1 without a bag, but the exact opposite can be true as well. Hermes wanting lot of ppl to experience the bag is also evidenced by the said waitlist system in some of the European countries (I'm also assuming this is a true waitlist system)

They're ramping up production in general, bc there aren't enough goods to go around! There are ppl who are not after a b/k that also wants Hermes goods, and Hermes just can't keep up.

Again, from my personal experience, they're are no sales to be made in other metiers, they don't have them for me to purchase! I have multiple outstanding orders I've put in and waited for over 3 yrs across various categories, I've been searching for a particular charm in over half a decade 😭

I think the lack of some products or finding what one wants is what makes the most that spend a lot and get no QB very frustrated and honestly I think that is also one of the reasons this lawsuit was filed. It was not only because the person spent and couldn’t get a second Birkin. Since Hermes is not a fashion house, you won’t see 200 new bags each season or very different shoe styles. Ultimately a lot of people that buy Hermes or bought their products through the years mainly has or had interest in bags, shoes, scarves, belts, SLGs. If I could spend 25k in other bags and shoes and get a B or K after, that would be wonderful, but it doesn’t work that way. Hence why people get so upset, because in many cases one ends up buying something one does not desire or has a need for because that person is longing for a bag, and led to believe through a wishlist that a bag will arrive with “building someone’s profile.” I have a friend who ordered a saddle for an imaginary horse to get a Birkin Rock.

@880 I believe the watch case is different because you are only buying watches.

I believe outside the US they tend to be more lenient on offering bags to people that only buy what they want. If you buy 25k of NQBs/SLGs/shoes for example, you will most likely get a K or B in most places in Europe that same year.

 

[Angiebbb]

But if I can go in, buy a 30k couch and take a bag that the SA had in mind for Karen... is it really spoken for? Also, how is it possible for bags to be spoken for if SAs cannot hold bags for customers longer than 24 hours or so?

Given this, I too believe that yes, Hermes lies when they say "not in stock."

I had a bag held for me for a month or so before. It depends on the store, country.

 

[sosauce]

It's amazing that a class action suit filed by a batch of lawyers who literally make their living by filing frivolous suits on contingency has gotten this much attention - in the media and here.

It's NOT tying bc there's no specific items bundled together, and it's certainly not Cartwright. It's completely frivolous, but apparently makes great clickbait.

As has been noted many many times in this thread, you can't buy the most desirable models from Rolex, Mercedes, Ferrari, Tesla etc etc etc unless you have a relationship with a store/dealer/the company. You can't even buy coveted wines if you're not on a long-term customer list (and yes wineries have purchase requirements to stay on the list).

It's silly, and the worst thing about it is that it exposes the ugliness of what people actually think (like "someone who lives near South Central isn't a likely Hermes customer" 🤯 or all the nasty comments in the media about Hermes customers and "eat the rich").

H won't issue a statement because 1) they almost never do and 2) it's standard PR practice to refrain from comment on class actions.

In the end this is just more mythmaking for Hermès. More articles saying that Birkins cost $100K. More perception that it's the most elite bag in the world. It'll either be great for the brand or reduce it further to a symbol of conspicuous consumption.

I think your examples are a bit different because Rolex isn’t selling baby blankets or chandeliers as preconditions of buying a watch. I don’t see the horizontal sale of unrelated goods in different sectors.

Also, for the tying requirement, it does not have to be so overt as a specific bundle of pre-determined goods. The case law even mentions that tying does not have to be laid out in express contractual terms to be existent. (Although, I think there are many customers who have very specific stories of being told exactly what else to buy to get a particular bag…) The refusal to supply a good until some other purchasing condition is met can be enough to show tying.

Hermes is pretty unique in the way that it operates. I think that we can all agree with.

 

[Angiebbb]

I think your examples are a bit different because Rolex isn’t selling baby blankets or chandeliers as preconditions of buying a watch. I don’t see the horizontal sale of unrelated goods in different sectors.

Also, for the tying requirement, it does not have to be so overt as a specific bundle of pre-determined goods. The case law even mentions that tying does not have to be laid out in express contractual terms to be existent. (Although, I think there are many customers who have very specific stories of being told exactly what else to buy to get a particular bag…) The refusal to supply a good until some other purchasing condition is met can be enough to show tying.

Hermes is pretty unique in the way that it operates. I think that we can all agree with.

😅I can’t stop laughing at the baby blankets and chandeliers to buy a watch 😅😅, thank you 😅

 

[addiCCted]

It does not work like a restaurant. If you spend $40k at once, you will leave the store with a QB or one will be offered to you shortly after. If you spend 10k in one trip, that might happen or not. Those bags were not allocated to anyone. They are just sitting there and that day they are finding new homes. I’ve heard that at a store in Paris and have heard of many cases in the U.S. If you spend 40k, you will get a bag. If you spend 3-5k here and there, someone needs to advocate for you. That said, if the SA is new at the store, you have more chances of getting a QB with less prespend. If you get a senior SA, more likely than not you will have to spend much more money before you get a QB. My friend spends at least a million dollars at Hermes a year in different countries. When she started buying at Madison last year, her SA even said to her. “There is no point in lying to you, you know how it works. I can offer you a K28 today, but I won’t be able to offer you a MK even if there are 20 in stock bc we save those for local clients. This year I won’t be able to offer you another bag, but next year I will.” She spent less than 5k and got the bag. She came back right after and bought exotic shoes, and her SA mentioned her manager was happy she had returned. She didn’t buy anything else and is getting another bag in May. She mentioned she was a good client but they don’t know how much she spends out of the US. Her SA was new to the store.

In this anecdote, it seems to suggest there is no tying more than there is tying, since your friend got bags at way less than the "speculated prespend"

But if I can go in, buy a 30k couch and take a bag that the SA had in mind for Karen... is it really spoken for?

Do you actually know someone that did that and got a bag?

Anyway, if prespending is a requirement of getting a bag, then it could be demonstrated by using sales data.

What I am actually confused about is whether there is a difference between "Prespend" and "tying". People seem to be mad at the term "prespend" altogether which many have already pointed out that many luxury brands also do.

 

[addiCCted]

I think your examples are a bit different because Rolex isn’t selling baby blankets or chandeliers as preconditions of buying a watch.

Seen another way, if I only wanted a specific watch, why would I want all those other watches if there was only one model I wanted. It actually may be better to be given other options/categories to spend your money.

It seems that at the crux of this saga, many are just upset Hermes is not just selling purses and wants to sell other things? (not saying thats your viewpoint, but it just seems like thats where a lot of the complaints seem to be stemming about, that Hermes is not known for xyz)

 

[HeartHermes]

Thanks for this.

I understand where you're coming from that every French worker produces less because of the cultural habits. But then... why not shift a leather worker's schedule from ancillary leather goods to making more bags? I understand it takes a while to be competent enough to make a B or a K, but I think even the people who make bags are also assigned to create other things. And why not hire/train even more French workers (even more than they have already done with their new factories and leather school)? Given that these possibilities exist, can one still posit that the restriction is organic in nature? I hear those such as @Sevenatenine and @HeartHermes that ramping up takes a while, but does the company not have business forecasters who can assess the deficiency and rectify it if they chose to?

I agree there are many factors that restrict supply of Bs and Ks. But given these things, do you disagree in any way with my personal conclusion which is: 1) the main reason Hermes restricts supply it is to make money, and 2) while there are efforts to increase production, Hermes has no desire or intention to change a model built on scarcity of these bags?

I don't think Hermes ever anticipated the demand that social media (IG, YT, TikTok, etc...) was going to create for the Birkin and Kelly. I think they were blindsided by it all. I'm not sure even forecasters could have imagined the fervor that has erupted for these bags over such a short period. Also, I could be wrong, but I get the impression that Hermes doesn't turn to outside sources a lot for advice. They seem to stay true to their own mission/ideals, which honestly, is something I've always admired about the company.