Hermès Faces Class Action Suit Over Birkin Sales Practices
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Let’s say the written proof does exist in form of a screenshot from the SA that says ‘I think you need to spend more money before a Birkin happens for you.’This is super interesting and I enjoyed reading everyone’s opinions very much! Not a lawyer, only have a master’s degree in compliance law, but I don’t think this suit will go far.
To summarize my stance:
Tying (in US because EU is separate) means there is an agreement (by H) that Birkins can only be sold with the purchase of a tied item. First, you’d have to determine that H customers are forced to purchase the tied product and if the products could be sold separately. So, for example: shoes. Can a Birkin and shoes be sold separately? Yes. Can the plaintiffs reasonably provide evidence that a tied product is required? Unlikely. In most cases, it’s a specific bundled item (hotels and breakfast, cars and radios, Microsoft office and a computer). Because H sells so many items (rather than a specific tied product), this will be hard to prove. Plus, people buy shoes from H without wanting a Birkin. H could easily evidence this. If they’re just saying “prespend” is required, that won’t cut it (and there would be a million different data points to back up H). Second, the plaintiffs need to prove that H has enough market power (under the Sherman Act) that the tied product (example: shoes) would be restrained in the free market. Again, I don’t think they could pinpoint one item (with data) to show that free competition was impacted because no one bought designer shoes from other luxury brands.
Their claim on the Cartwright Act is flimsy too. Typically the Cartwright Act is when two or more people engage in tying. Like two competitors who price fix or restrict trade collaboratively. Lastly, for the California Unfair Competition Law, they’re claiming injury-in-fact as loss of money (not a strong argument because the purchase of products is not a loss because you received said product as well as many other people who continuously buy without injury) and they’re also kinda claiming UDAAP, but that argument of unfair and deceptive is really targeted for financial products.
All H has to do here is show examples of when Birkins were offered without prespend. I’m sure this happens. I also think that having managers approve sales of Birkins is deliberate and actually helps protect SAs from claims like this because they don’t have the power to conclusively say that a Birkin will appear (and be approved) with this jewelry/shoe/scarf purchase.
For this complaint to be credible, they’d need written proof not just that they stated they were “told to purchase other items and accessories.” That’s not a credible claim.
Anyway, just my two cents. I could rant about this foreverrrrr so sorry to drone on. Also have to point out that this complaint was VERY sloppy. I’m embarrassed for the lawyers!
I do wonder if they would have to prove this is not one SA going rogue. Hermes has an explicit policy banning SAs from upselling customers on non-quota-bag items to get a Birkin. SAs have been fired for it.
I am not too worried about Hermes’ ability to fight the lawsuit. I am intrigued by the health of the business where such a large portion of the sales comes from people establishing their history, whether it is explicitly or implicitly to get a quota bag.
Interesting. IF linked sales are illegal, no matter the product--and there does not have to be proof of harm to consumer or other companies attached with that--then yeah, I'd say H should be found liable.
I think there is validity in the evidence of enough consumers getting up and stating the truth: "I went in the store and asked for a Birkin. I was denied. I then spent $10k in two months on other products, and was offered a bag." A paltry number of those who can state they got a bag without pre-spend doesn't negate the overall reality of their business model.
I read the first five pages of this thread then jumped to the end,
so if these two points have already been stated, my apologies.
In the article linked to the original post, this statement made by Hermes was given:
Hermès denies the practice: “Hermès strictly prohibits any sales of certain products as a condition to the purchase of others,” the brand told BoF last year. CEO Axel Dumas has acknowledged, however, that stores are encouraged to vet buyers and attribute the sold-out bags only to “real” clients as the company seeks to thwart an explosion of resale activity for its products.
That has always been my interpretation rationale - whatever practices have been observed, their purposes are for screening buyers.
Secondly. This enters the realm of anonymous social media posts which may not hold up in court.
It does seem that in Asia there are instances where clients have been shown a quota bag and been honestly told by the SA that if the client spends a specified sum there and then the SA would be able to sell it to them.
That does evidence a direct link. But that is another continent and might tie in with cultural sales practices there.
so if these two points have already been stated, my apologies.
In the article linked to the original post, this statement made by Hermes was given:
Hermès denies the practice: “Hermès strictly prohibits any sales of certain products as a condition to the purchase of others,” the brand told BoF last year. CEO Axel Dumas has acknowledged, however, that stores are encouraged to vet buyers and attribute the sold-out bags only to “real” clients as the company seeks to thwart an explosion of resale activity for its products.
That has always been my interpretation rationale - whatever practices have been observed, their purposes are for screening buyers.
Secondly. This enters the realm of anonymous social media posts which may not hold up in court.
It does seem that in Asia there are instances where clients have been shown a quota bag and been honestly told by the SA that if the client spends a specified sum there and then the SA would be able to sell it to them.
That does evidence a direct link. But that is another continent and might tie in with cultural sales practices there.
Multi piece items are clearly not linked sales since it’s perfectly legal to price something as a bundle. So the price is for a pair of shoes, there is no separate price for just the left or the right shoe. It only becomes illegal if you are told when you want to buy the pair of shoes that you can only do so if you also buy a pack of Oreos even though there is nothing explicitly written in the pricing to suggest that the shoes and the Oreos are priced as a bundle. All items out in the store for sale are supposed to be clearly marked with a price so I suppose if one were really following the letter of the law, H and other luxury brands should have anything not marked with a price out on the floor labeled for display only. H does this for bags but not for jewelry, etc.
I just send the news to my SA. Couldn't help myself 
I can’t comment on the merit of this lawsuit because law is not my area of expertise, but I will have to say that I was quite tickled by the news. I typically stand on the side of the consumer as opposed to the side of corporations and this time is no different.
Plus, we all know that it’s true and it would be disingenuous to pretend otherwise that “pre-spend” is not a requirement. The pages and pages here say otherwise. Again, will it hold up in a court of law? Is it a violation of antitrust laws? I have no idea. And more than likely the answer to both questions is no, but we all know that Hermes requires the majority of its clients to buy other things most of them don’t want in order to get quota bags and that that is the truth.
Plus, we all know that it’s true and it would be disingenuous to pretend otherwise that “pre-spend” is not a requirement. The pages and pages here say otherwise. Again, will it hold up in a court of law? Is it a violation of antitrust laws? I have no idea. And more than likely the answer to both questions is no, but we all know that Hermes requires the majority of its clients to buy other things most of them don’t want in order to get quota bags and that that is the truth.
"the majority of its clients to buy other things most of them don’t want in order to get quota bags"
and the evidence for that is ?
the assumption is that social media accurately reflects the purchasing demographic of Hermes
really . . ?
and the evidence for that is ?
the assumption is that social media accurately reflects the purchasing demographic of Hermes
really . . ?
It’s kind of astounding to see the number of posts discussing pre-spend and then have Hermes buyers deny its existence.
Hermes runs a big con but one that sophisticated and rich people love to play so I think there are more pressing causes to chase than this one.
Not necessarily. If it's a class action, that means it moots any other similar cases being brought. If they could get away with a low number, they'll likely settle.
This is super interesting and I enjoyed reading everyone’s opinions very much! Not a lawyer, only have a master’s degree in compliance law, but I don’t think this suit will go far.
To summarize my stance:
Tying (in US because EU is separate) means there is an agreement (by H) that Birkins can only be sold with the purchase of a tied item. First, you’d have to determine that H customers are forced to purchase the tied product and if the products could be sold separately. So, for example: shoes. Can a Birkin and shoes be sold separately? Yes. Can the plaintiffs reasonably provide evidence that a tied product is required? Unlikely. In most cases, it’s a specific bundled item (hotels and breakfast, cars and radios, Microsoft office and a computer). Because H sells so many items (rather than a specific tied product), this will be hard to prove. Plus, people buy shoes from H without wanting a Birkin. H could easily evidence this. If they’re just saying “prespend” is required, that won’t cut it (and there would be a million different data points to back up H). Second, the plaintiffs need to prove that H has enough market power (under the Sherman Act) that the tied product (example: shoes) would be restrained in the free market. Again, I don’t think they could pinpoint one item (with data) to show that free competition was impacted because no one bought designer shoes from other luxury brands.
Their claim on the Cartwright Act is flimsy too. Typically the Cartwright Act is when two or more people engage in tying. Like two competitors who price fix or restrict trade collaboratively. Lastly, for the California Unfair Competition Law, they’re claiming injury-in-fact as loss of money (not a strong argument because the purchase of products is not a loss because you received said product as well as many other people who continuously buy without injury) and they’re also kinda claiming UDAAP, but that argument of unfair and deceptive is really targeted for financial products.
All H has to do here is show examples of when Birkins were offered without prespend. I’m sure this happens. I also think that having managers approve sales of Birkins is deliberate and actually helps protect SAs from claims like this because they don’t have the power to conclusively say that a Birkin will appear (and be approved) with this jewelry/shoe/scarf purchase.
For this complaint to be credible, they’d need written proof not just that they stated they were “told to purchase other items and accessories.” That’s not a credible claim.
Anyway, just my two cents. I could rant about this foreverrrrr so sorry to drone on. Also have to point out that this complaint was VERY sloppy. I’m embarrassed for the lawyers!
As I previously mentioned, if this case goes to discovery, it could get quite interesting. I always thought, based on people's various experiences, that systems for getting Birkins, Kellys and other bags have more to do with individual boutiques and how they are managed, and less to do with top down corporate policy. Let's face it. If Hermés had a written in stone pre-spend policy for every store in the US, then we'd know about it here on PF.
It could also be that in Asia, there are no laws preventing such practices, so the boutiques there can engage in them. Here in the US we have comprehensive anti-trust laws which, even though not strictly enforced these days by the DOJ, are still a threat because US laws allow consumers themselves to bring the case in get treble damages. Any corporate attorney worth his salt in the US, would know that and be schooling all managers that any such practices could lead to lawsuits.
I don't know if there are written in stone pre-spend, but, SAs work on commission, and don't get commissions for selling B/Ks. So let's face it, if someone comes in wanting a Birkin, and makes it known they're willing to spend a lot of money on other stuff to get one, I think most SAs will take advantage of that. Leading that person on to get them to buy tens of thousands of dollars on other stuff they get 3% commission on. Then, just as they sense the buyer getting disinterested, surprise! They get a Birkin, and the process starts all over again. I also think that many SAs are apt to string along entitled, rude types along further then those who seem genuinely interested in the brand. Let's face it, the Birkin focused customer is only there for one thing, and likely to disappear after they get what they want. If I was an SA I'd be focusing on customers who buy the store and like the brand overall than someone who just wants a Birkin because its the bag du jour.