Hermès Faces Class Action Suit Over Birkin Sales Practices

[Israeli_Flava]

I don’t agree with every statement of the video, but I do agree in the grand scheme of things that ultimately the business does not care about anyone in particular, unless you are in the millions of dollars annual spend category. That many employees can care about an individual as a person, of course a lot do. I moved stores in a country and remained great friends with my former SA. My friend that drops at least 400k in a store a year was not allocated a bag on her birthday, because they were trying to see if the one bag a person would fly. They gave her a nice flower bouquet. She disappeared for 5 months, and only then they contacted her with a special bag for her. If you spend at least a million dollars at Chanel a year, they will get whatever bag you want in Japan if they need to, and that bag will be available there when you come to the store on your birthday. There is no comparison on the level of service provided by Chanel and Hermes for top spending clients, Chanel seems to be superior for clients that are on that spending category.
The business model is “you need to be a loyal friend of the brand” bc they need to sell their jewelry, RTW, furniture and other items that don’t sell themselves and they rely on the desirability of two group of bags to do so. Chanel can make 200+ bags a season and most of their RTW might not even hit the shelves bc they were sold to top clients after the runway show. If they make plates, pillows, baby blankets, they will sell out.
It seems H’s policy on their goods is that they are perfect and many people check them, so they have absolutely no flaws. They gave me the run around on a pair of shoes before. The shoes were not used and it was clear there was defect on the sole that was not visible if you didn’t look closely. When I brought the shoe in, they mentioned: let’s see if this is an imperfection, probably not because our products are always perfect, insinuating that I had damaged the unused shoe. After a few months I get an email there was an imperfection and we will give you a store credit. I didn’t live in the country and didn’t want a credit. They also tried to circumvent consumer protection laws in that country which states you must take back anything that is defective and give the client money back if that is the person’s wish. I had to send them the law so they would refund my money.

This is not “luxurious” service. Target will probably take anything back unused if the item is clearly defective.

Anyone makes mistakes, but their artisans do not.

Exactly same for me dear.

At the end of the day, it's Hermes' business, their products, & they own the rights. If they decided to stop selling B's and K's altogether.... what would we do???...sue them to make them sell us one becaue we bought 2078 pairs of Chepre, expecting a Birkin offer in return? I don't care what kind of legalese you try to apply, they don't have to sell you one. It's a handbag. It's THEIR handbag. If you don't like it, BOYCOTT. Again, just my unpopular opinion and I guess we shall see....

 

[FrenchNewbie]

Lawyer here (and ironically I live in the Bay Area too!), but not in antitrust law. I think this case will likely settle as others have already mentioned. Purchasing a luxury bag isn't something that affects you in a significant way versus say something like accessing a service or product that's material to daily life/society. That's when it really matters to a court and that's the legislative intent behind antitrust law. Also, it's really debatable whether plaintiffs were "coerced" into making "ancillary" purchases especially for "luxury" purchases. They didn't sign a contract, they didn't get in writing that if I bought x items at x price I would get y and I doubt the SA made any firm verbal promises either. This claim will be hard to prove on plaintiffs' end. I would be very surprised if they can even get this case class certified - Hermes will very likely want to settle this case ASAP before it even gets to that point.

I am not a car person, but my husband who is, says that Ferrari is similar to Hermes in that you have to be offered a car. I don't think Ferrari has been sued under antitrust law but it's the same logic. Still - I'll be following what happens as I'm interested as are my friends who are also lawyers and fashion enthusiasts!!

I totally understand & respect your opinion about the Birkin not being material daily life/society, but who determines that? As others have said before me, it's up to the attorneys to convince the judge (and/or jury) enough to determine if the person was wronged under the law...no matter how frivolous one may find the suit, or whether we agree with it or not. Maybe not getting it after being promised they would, affected the plaintiffs' mental well-being. We can speculate or assume it didn't, or people can make fun of them, but do we really know?

And also I don't think comparing Ferrari's practices to Hermes is a fair analogy, as others have mentioned before me--that would explain why they haven't been sued, as you mention. I happen to be a car person (own multiple luxury brands), and the way Ferrari works is not equivalent to the way Hermes works (or what is being alleged under the tying lawsuit).

Hermes would have you purchase non-bag items [e.g. Chypres or blankets or Kelly bracelets] in order to be "allowed" or with the promise to purchase a bag [i.e. Birkin or Kelly].

Ferrari has all types of weird rules---which I don't agree with. Part of the reason why I don't want to purchase one.

• You have to drive the car (and not garage it)
• you cannot alter the factor paint job
• you cannot sell the car within a specified period of time (or indefinitely), and if you need or want to sell it, you must sell it back to Ferrari
• you have to own lesser models (and often time, multiple ones) in order to go on the waiting list for a limited edition model

So they will let you buy a car (albeit a lower model) without requiring you to, for example, purchase a Ferrari leather jacket or a Ferrari barstool.

 

[xlana]

I totally understand & respect your opinion about the Birkin not being material daily life/society, but who determines that? As others have said before me, it's up to the attorneys to convince the judge (and/or jury) enough to determine if the person was wronged under the law...no matter how frivolous one may find the suit, or whether we agree with it or not. Maybe not getting it after being promised they would, affected the plaintiffs' mental well-being. We can speculate or assume it didn't, or people can make fun of them, but do we really know?

And also I don't think comparing Ferrari's practices to Hermes is a fair analogy, as others have mentioned before me--that would explain why they haven't been sued, as you mention. I happen to be a car person (own multiple luxury brands), and the way Ferrari works is not equivalent to the way Hermes works (or what is being alleged under the tying lawsuit).

Hermes would have you purchase non-bag items [e.g. Chypres or blankets or Kelly bracelets] in order to be "allowed" or with the promise to purchase a bag [i.e. Birkin or Kelly].

Ferrari has all types of weird rules---which I don't agree with. Part of the reason why I don't want to purchase one.

• You have to drive the car (and not garage it)
• you cannot alter the factor paint job
• you cannot sell the car within a specified period of time (or indefinitely), and if you need or want to sell it, you must sell it back to Ferrari
• you have to own lesser models (and often time, multiple ones) in order to go on the waiting list for a limited edition model

So they will let you buy a car (albeit a lower model) without requiring you to, for example, purchase a Ferrari leather jacket or a Ferrari barstool.

I'm not a car person as I mentioned so I defer to your knowledge as you've indicated you're a car person. Your point about Ferrari requiring you to own lesser models first is probably why my husband brought it up as an example to me when we were actually discussing this Hermes lawsuit. So, I can see why my husband (also a lawyer) made the connection.

I said buying one specific luxury handbag from one specific brand isn't material to daily life and/or society because of what I understand the purpose of antitrust laws to be - to protect consumers from predatory practices who monopolize a product or service and/or an entity has predatory practices that stifles healthy market competition. A great example of this is actually happening now in the tech world - the DOJ is suing Apple and accusing them for doing exactly the above. (See article: https://apnews.com/article/apple-an...e-department-822d7e8f5cf53a2636795fcc33ee1fc3)

So to clarify, yes that statement is my opinion but also my legal conclusion/argument after taking into consideration what I understand the purpose of antitrust laws to be. If I was the attorney for Hermes, I would look into either settling the case or filing a motion to dismiss on the grounds that antitrust laws don't even apply here. Just adding to the discussion as someone with a legal background.

 

[saugababy]

I said buying one specific luxury handbag from one specific brand isn't material to daily life and/or society because of what I understand the purpose of antitrust laws to be - to protect consumers from predatory practices who monopolize a product or service and/or an entity has predatory practices that stifles healthy market competition. A great example of this is actually happening now in the tech world - the DOJ is suing Apple and accusing them for doing exactly the above. (See article: https://apnews.com/article/apple-an...e-department-822d7e8f5cf53a2636795fcc33ee1fc3)

What makes a luxury handbag different from Apple in this example?

 

[Angiebbb]

Exactly same for me dear.

At the end of the day, it's Hermes' business, their products, & they own the rights. If they decided to stop selling B's and K's altogether.... what would we do???...sue them to make them sell us one becaue we bought 2078 pairs of Chepre, expecting a Birkin offer in return? I don't care what kind of legalese you try to apply, they don't have to sell you one. It's a handbag. It's THEIR handbag. If you don't like it, BOYCOTT. Again, just my unpopular opinion and I guess we shall see....

I think they can deny service altogether, but having a wishlist and stringing along some people that want to get a bag is not correct. I love their products and have from different categories, but I think most people agree that even if one is a high spender, there must have been a time that person bought something because of the desire and expectation of being offered that bag. No one placed a gun to the person’s head, but it doesn’t change the fact that their sales practices are frowned upon. My friend that spends a million bucks a year there would stop buying if BKs disappeared. Hence she is able to buy multiple QBs a year in different countries. LV in Europe can see what I buy in the U.S. Why the same is not true for Hermes? It doesn’t work to their advantage to have a system where one can only get 1-2 bags a year worldwide. Their financial results would not be as high.

 

[xlana]

What makes a luxury handbag different from Apple in this example?

From what I understand, it's the entire scheme around Apple and their business model. As you can see from the article, their business practice is to keep services proprietary thereby forcing the consumer to only use their services if they have an iPhone. The DOJ is alleging that Apple makes it harder for cross collaboration and compatibility with other technology thereby "stifling" innovation in the field. It also seems the DOJ is suggesting that Apple's practices are pervasive in that it has a large ripple effect across the tech field in general.

So I would say that a luxury handbag from Hermes or any other brand, is different because the fashion houses aren't preventing the sale of other handbags in the marketplace if this makes sense. Hermes' sales tactics/sales policy or whatever you want to call it, doesn't affect the larger fashion industry in that they're causing the prevention of sales or growth of their competitors.

 

[saugababy]

From what I understand, it's the entire scheme around Apple and their business model. As you can see from the article, their business practice is to keep services proprietary thereby forcing the consumer to only use their services if they have an iPhone. The DOJ is alleging that Apple makes it harder for cross collaboration and compatibility with other technology thereby "stifling" innovation in the field. It also seems the DOJ is suggesting that Apple's practices are pervasive in that it has a large ripple effect across the tech field in general.

So I would say that a luxury handbag from Hermes or any other brand, is different because the fashion houses aren't preventing the sale of other handbags in the marketplace if this makes sense. Hermes' sales tactics/sales policy or whatever you want to call it, doesn't affect the larger fashion industry in that they're causing the prevention of sales or growth of their competitors.

Apple isn't preventing the sale of other phones in the market either. The case is similar in that sense.

 

[jellyv]

Apple isn't preventing the sale of other phones in the market either. The case is similar in that sense.

Apples to oranges, if you will. OK I had to say that. Antitrust in this case is a whole different world, about making and disseminating a product that by design can't play well with other products, affecting both competitors and consumers. Entirely unrelated to the subject of tying in order to buy a handbag.

 

[sosauce]

Apples to oranges, if you will. OK I had to say that. Antitrust in this case is a whole different world, about making and disseminating a product that by design can't play well with other products, affecting both competitors and consumers. Entirely unrelated to the subject of tying in order to buy a handbag.

Yes. I agree that Apple’s antitrust case is quite different than Hermes’s quota bag prespend.

Apple’s is more about maintaining a monopoly in the traditional sense. While Hermes’s is more about horizontal expansion.

One is about a company restricting customers from accessing other products with an iPhone purchase. And the other is about a company making customers buy other products alongside a Birkin.

 

[saugababy]

Yes. I agree that Apple’s antitrust case is quite different than Hermes’s quota bag prespend.

Apple’s is more about maintaining a monopoly in the traditional sense. While Hermes’s is more about horizontal expansion.

One is about a company restricting customers from accessing other products with an iPhone purchase. And the other is about a company making customers buy other products alongside a Birkin.

Ok, this is clear. Thanks

 

[Israeli_Flava]

I think they can deny service altogether, but having a wishlist and stringing along some people that want to get a bag is not correct. I love their products and have from different categories, but I think most people agree that even if one is a high spender, there must have been a time that person bought something because of the desire and expectation of being offered that bag. No one placed a gun to the person’s head, but it doesn’t change the fact that their sales practices are frowned upon. My friend that spends a million bucks a year there would stop buying if BKs disappeared. Hence she is able to buy multiple QBs a year in different countries. LV in Europe can see what I buy in the U.S. Why the same is not true for Hermes? It doesn’t work to their advantage to have a system where one can only get 1-2 bags a year worldwide. Their financial results would not be as high.

I'll never forget what a long time SA told me very early on in my H shopping days when she noticed I was in the boutique like every week! She said SLOW DOWN. Enjoy the process. I was soooo eager to learn about Hermes (scarves) at the time....

So many people are planning plotting and dreaming about their NEXT bag before they got the first bag home! How many times have you heard "Hmmm I just got my dreeeeaaaam bag (in the unboxing video made on the same day) and I 'm already dreaming of my next Birkin or maybe hmmm maybe a Kelly". I think some people are in such denial about wtf is really going on here. Cmon. Hermes can't give you a Birkin or a Kelly every damn day you want one! You have to wait... you have to spend... you have to shop other categories because otherwise... that would be the only thing you popped in for and they wouldn't have any left for me They know that. You know that. You know that they know that I know that you know that. We all are in this with our eyes wide open. The people who are sueing Hermes KNOW the game....and they played and they GOT bags!!! They kept shopping to get the next bag. And when they didn't get the next bag fast enough in their eyes, they sued... so here we are... TOUGH SH*T! ((((sorry, rant over)))

 

[706MadisonAv]

They know that. You know that. You know that they know that I know that you know that.

Love this!

 

[xlana]

Apples to oranges, if you will. OK I had to say that. Antitrust in this case is a whole different world, about making and disseminating a product that by design can't play well with other products, affecting both competitors and consumers. Entirely unrelated to the subject of tying in order to buy a handbag.

Love the pun lol. I also agree that the case against Apple is different from what plaintiffs are alleging in this case. In citing the case, I was trying to show the purpose of antitrust laws in the US and what kind of facts you look for in a "traditional" antitrust case. I don't think what Hermes is doing violates antitrust laws from a legal perspective - that's exactly what I was trying to to show. Even if plaintiffs can prove that Hermes does officially use a tying policy, their "tying policy" isn't creating a monopoly over other handbags or affecting the scarcity of other handbags - that's what would normally trigger antitrust laws.

 

[september1985]

WHEREFORE, Plaintiffs demand the Defendant to immediately sell each Plaintiff a birkin; as well as a trial by a fabulously fashionable jury.

 

[haute okole]

WHEREFORE, Plaintiffs demand the Defendant to immediately sell each Plaintiff a birkin; as well as a trial by a fabulously fashionable jury.

lol! In that case, let me be Doe Number 1. Just kidding, I will never be able to set foot in the store again.