Hermès Faces Class Action Suit Over Birkin Sales Practices

#616
Repeating myself about Oliver Wendell Holmes and good cases and bad law.

Agreeing with @haute okole here, cases of first impression are difficult to prosecute (not in the criminal sense, for those without legal backgrounds, please don't come for me on this, it's a legal term of art) because the legal principle of stare decisis means that the judicial law set forth in previous cases that have addressed an issue must be followed. Because there are no precedents (previous cases on point) there's nothing definitive so the lawyers must argue by analogy or whatever they think will support the legal conclusions they seek.

Here, plaintiffs' lawyers must argue that the federal antitrust laws pursuant to which they seek relief apply to the facts in this case (whatever facts they can prove). So all of the elements of the federal law that allows redress must be alleged and supported. Hard to do when when theoretically no one has ever done it before. And all arguments for/against are game before the judge at trial. It will be up to the appellate process, if any, to assess whether the trial judge got it right. And yes as @MonsoonBirkin notes there will be all sorts of back and forth on the plain letter of the law, Congress' intent in passing the statutes, and other no doubt long-winded analyses.

I haven't read the pleadings and don't plan to because at this point it's all noise and click-bait. Let's get to the summary judgment brief that we all know is coming and then we can fairly asses, as the judge will have to do, who may be in the right on this. (At some point, Hermes' lawyers are likely to file a pleading that says the plaintiffs haven't made a case as a legal matter, even if every fact they've alleged is true; this is a motion for summary judgment.)

Everyone reading this who's not a practicing lawyer is now thinking 'man, I am so glad I went to art, medical, engineering, social work, etc., school! I'm reminding myself of why I stopped practicing :lol:
 
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#617
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#619
AmalieLotte92 said:
abc7news.com

When not landing a Birkin bag lands luxury brand Hermès a lawsuit: Here's a closer look at the case

With so much happening in the world, it may seem frivolous to be talking about handbags. But experts say this Hermès lawsuit is novel and could become a landmark case for retailers.
abc7news.com abc7news.com

Featuring interviews from the author of "Bringing Home the Birkin" and the "Hermes Roadmap" YouTuber. This lawsuit really has everyone talking!

Click to expand...

Tania charges $1500 for lifetime coaching! Woah. And the other expert bought and sold $1.6M worth of bags in a year. Not saying he’s the problem, but…
 
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#620
textilegirl said:
Repeating myself about Oliver Wendell Holmes and good cases and bad law.

Agreeing with @haute okole here, cases of first impression are difficult to prosecute (not in the criminal sense, for those without legal backgrounds, please don't come for me on this, it's a legal term of art) because the legal principle of stare decisis means that the judicial law set forth in previous cases that have addressed an issue must be followed. Because there are no precedents (previous cases on point) there's nothing definitive so the lawyers must argue by analogy or whatever they think will support the legal conclusions they seek.

Here, plaintiffs' lawyers must argue that the federal antitrust laws pursuant to which they seek relief apply to the facts in this case (whatever facts they can prove). So all of the elements of the federal law that allows redress must be alleged and supported. Hard to do when when theoretically no one has ever done it before. And all arguments for/against are game before the judge at trial. It will be up to the appellate process, if any, to assess whether the trial judge got it right. And yes as @MonsoonBirkin notes there will be all sorts of back and forth on the plain letter of the law, Congress' intent in passing the statutes, and other no doubt long-winded analyses.

I haven't read the pleadings and don't plan to because at this point it's all noise and click-bait. Let's get to the summary judgment brief that we all know is coming and then we can fairly asses, as the judge will have to do, who may be in the right on this. (At some point, Hermes' lawyers are likely to file a pleading that says the plaintiffs haven't made a case as a legal matter, even if every fact they've alleged is true; this is a motion for summary judgment.)

Everyone reading this who's not a practicing lawyer is now thinking 'man, I am so glad I went to art, medical, engineering, social work, etc., school! I'm reminding myself of why I stopped practicing :lol:
Click to expand...
100% especially your last line lol :drinks:
 
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#621
If anyone wants to follow along with the lawsuit and its various court filings along the way, here's a good link.

https://www.courtlistener.com/docket/68356452/cavalleri-v-hermes-international-a-french-corporation/

Of note: Hermes has been served. As of two days ago, the Hermes attorneys have now said "hi, we're here, let's roll!" to the court.

Also of note: "The assigned judge [Hon James Donato] participates in the Cameras in the Courtroom Pilot Project. See General Order No. 65 and http://cand.uscourts.gov/cameras."

Which means... we as members of the public can request video recordings of these hearings. Hermes or the Plaintiffs can object. The former party probably will. But if I can figure out hearing dates, I'll put in a request because... well, why not? 😄

Hearings this early on can be quite skull numbing and procedural, though. I don't think it'll be very revealing as to specific evidence and conduct, but the judge's tone and questions to the attys can indicate his overall initial sentiment towards the case and its legal merits. Things like a hearing on a motion for summary judgment would be interesting (which as textilegirl nicely articulates, is arguing why this lawsuit is deficient for x,y,z reasons and should be tossed before trial) as would any hearing related to discovery down the road, if it ever gets there ("we should be entitled to things like sales records, client records, etc").

But even before all of this, Hermes should file their first response within the next couple of weeks. Keeping in mind that Hermes will be represented by the best money can buy, it will no doubt be everything and the kitchen sink thrown at the Plaintiffs.
 
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#622
I got a phone call and the email today from the big law firm, and they asked me for possibility of testifying as an expert witness for a big, big company. (The company is like one of top 2 or 3 in the fields, and everybody knows its name.) Of course, I declined the offer because it doesn't benefit me much and I am pretty overwhelmed with my plate currently. Then, I thought that if it were the Hermes case, I would definitely have said, "yes," since it would entertain my life better. :lol:
 
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#624
I think Hermes' strategy isn't particularly groundbreaking in the business world. Many other businesses employ similar strategies, albeit in different forms and approaches.

  1. Hermes bags are uniquely handmade by a single artisan from start to finish. Becoming proficient in crafting these bags requires years of training. Unlike other brands with production lines, Hermes doesn't have the capacity to churn out an endless supply of bags to meet demand.
  2. Because of their limited production, Hermes allocates bags to stores based on their performance. Stores are ranked into tiers, with Tier 1 stores receiving more bags.
  3. Stores with higher sales performance, like those in Tier 1, receive a larger allocation of bags.
  4. Consequently, bag allocation depends on the sales contributed by customers to each store.
  5. Given the high demand and limited supply, stores naturally prioritize customers who have built relationship with the store and sales associates. However, with a large customer base and limited bags per shipment, it's impossible to satisfy everyone simultaneously.
  6. Sales associates (SAs) are essentially salespeople. They earn commissions from sales, much like agents in other industries. While they may encourage purchases, customers are never compelled to buy. Purchases are made out of personal choice and desire.
  7. Many people resell these bags. As a business owner, it's reasonable to be selective about who the bags are sold to.
While some SAs may be rude or indifferent, it's important to recognize that some customers display similar behavior. It's a two-way street, and mutual respect is essential.

Hermes, like any relationship, involves give and take and requires mutual respect.

Many people view material possessions as status symbols, which shouldn't be the case. The quality of Hermes leather is exceptional, surpassing that of many luxury brands.

Hermes bags embody stories, craftsmanship, heritage, and quality. Some individuals wait years to acquire a bag, while others are fortunate enough to walk in and purchase one. There's no set rule or guideline; everyone's journey with Hermes is unique and depends on factors like location, attitude, and relationship with their sales associate.

Other brands, such as Patek Philippe and Rolex, employ similar business strategies. For example, Chanel hosts VIP exclusive launches for new items, making them available to high-spending customers before the general public. With Patek, no one can just walk in and buy the coveted Nautilus.

Ultimately, these are just material possessions. They should complement our lives rather than define our worth. It's essential to appreciate the craftsmanship and brand legacy without viewing them just as status symbols.

Focus on collecting and buying items you genuinely love and will use. Material possessions shouldn't determine your value or worth.
They are just the cherry on top.
 
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#625
kbluebutterfly said:
I think Hermes' strategy isn't particularly groundbreaking in the business world. Many other businesses employ similar strategies, albeit in different forms and approaches.

  1. Hermes bags are uniquely handmade by a single artisan from start to finish. Becoming proficient in crafting these bags requires years of training. Unlike other brands with production lines, Hermes doesn't have the capacity to churn out an endless supply of bags to meet demand.
  2. Because of their limited production, Hermes allocates bags to stores based on their performance. Stores are ranked into tiers, with Tier 1 stores receiving more bags.
  3. Stores with higher sales performance, like those in Tier 1, receive a larger allocation of bags.
  4. Consequently, bag allocation depends on the sales contributed by customers to each store.
  5. Given the high demand and limited supply, stores naturally prioritize customers who have built relationship with the store and sales associates. However, with a large customer base and limited bags per shipment, it's impossible to satisfy everyone simultaneously.
  6. Sales associates (SAs) are essentially salespeople. They earn commissions from sales, much like agents in other industries. While they may encourage purchases, customers are never compelled to buy. Purchases are made out of personal choice and desire.
  7. Many people resell these bags. As a business owner, it's reasonable to be selective about who the bags are sold to.
While some SAs may be rude or indifferent, it's important to recognize that some customers display similar behavior. It's a two-way street, and mutual respect is essential.

Hermes, like any relationship, involves give and take and requires mutual respect.

Many people view material possessions as status symbols, which shouldn't be the case. The quality of Hermes leather is exceptional, surpassing that of many luxury brands.

Hermes bags embody stories, craftsmanship, heritage, and quality. Some individuals wait years to acquire a bag, while others are fortunate enough to walk in and purchase one. There's no set rule or guideline; everyone's journey with Hermes is unique and depends on factors like location, attitude, and relationship with their sales associate.

Other brands, such as Patek Philippe and Rolex, employ similar business strategies. For example, Chanel hosts VIP exclusive launches for new items, making them available to high-spending customers before the general public. With Patek, no one can just walk in and buy the coveted Nautilus.

Ultimately, these are just material possessions. They should complement our lives rather than define our worth. It's essential to appreciate the craftsmanship and brand legacy without viewing them just as status symbols.

Focus on collecting and buying items you genuinely love and will use. Material possessions shouldn't determine your value or worth.
They are just the cherry on top.
Click to expand...

Interesting information about the allocation of bags. Thanks for sharing that. I didn't know that Hermes allocates bags to stores based on their performance and that stores are ranked into tiers, with Tier 1 stores receiving more bags. Do you currently work at Hermes, or maybe have in the past?
 
#626
kbluebutterfly said:
I think Hermes' strategy isn't particularly groundbreaking in the business world. Many other businesses employ similar strategies, albeit in different forms and approaches.

  1. Hermes bags are uniquely handmade by a single artisan from start to finish. Becoming proficient in crafting these bags requires years of training. Unlike other brands with production lines, Hermes doesn't have the capacity to churn out an endless supply of bags to meet demand.
  2. Because of their limited production, Hermes allocates bags to stores based on their performance. Stores are ranked into tiers, with Tier 1 stores receiving more bags.
  3. Stores with higher sales performance, like those in Tier 1, receive a larger allocation of bags.
  4. Consequently, bag allocation depends on the sales contributed by customers to each store.
  5. Given the high demand and limited supply, stores naturally prioritize customers who have built relationship with the store and sales associates. However, with a large customer base and limited bags per shipment, it's impossible to satisfy everyone simultaneously.
  6. Sales associates (SAs) are essentially salespeople. They earn commissions from sales, much like agents in other industries. While they may encourage purchases, customers are never compelled to buy. Purchases are made out of personal choice and desire.
  7. Many people resell these bags. As a business owner, it's reasonable to be selective about who the bags are sold to.
While some SAs may be rude or indifferent, it's important to recognize that some customers display similar behavior. It's a two-way street, and mutual respect is essential.

Hermes, like any relationship, involves give and take and requires mutual respect.

Many people view material possessions as status symbols, which shouldn't be the case. The quality of Hermes leather is exceptional, surpassing that of many luxury brands.

Hermes bags embody stories, craftsmanship, heritage, and quality. Some individuals wait years to acquire a bag, while others are fortunate enough to walk in and purchase one. There's no set rule or guideline; everyone's journey with Hermes is unique and depends on factors like location, attitude, and relationship with their sales associate.

Other brands, such as Patek Philippe and Rolex, employ similar business strategies. For example, Chanel hosts VIP exclusive launches for new items, making them available to high-spending customers before the general public. With Patek, no one can just walk in and buy the coveted Nautilus.

Ultimately, these are just material possessions. They should complement our lives rather than define our worth. It's essential to appreciate the craftsmanship and brand legacy without viewing them just as status symbols.

Focus on collecting and buying items you genuinely love and will use. Material possessions shouldn't determine your value or worth.
They are just the cherry on top.
Click to expand...

This was very well said, educational, and a refreshingly diplomatic and validating way to remind people "it's just stuff" without seeming dismissive and harsh toward others who have felt shunned at one point by a luxury brand. It's a gentle reminder to reframe that it's just shopping, not a character contest or anything.

I do have a question, when it is said that all Hermes bags are hand made by usually a single artisan does this mean all of their bag offerings or just the Birkin or Kelly? Non-quota bags can be hard to get from the store, as well. I wonder if it has to do with the popularity of Hermes post covid and them being at slightly more approachable price point, or if their production is still small scale across all items.

Thank you for your insight.
 
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#627
kbluebutterfly said:
  1. Because of their limited production, Hermes allocates bags to stores based on their performance. Stores are ranked into tiers, with Tier 1 stores receiving more bags.
  2. Stores with higher sales performance, like those in Tier 1, receive a larger allocation of bags.
Click to expand...

This makes sense as a corporate policy. Yet, anecdotally, high traffic stores (Beverly Hills, Madison, San Francisco, Seattle, etc.) are considered, at least on tPF, to be more competitive.

How could both be true at the same time? If higher revenue stores get allocated more bags, theoretically it shouldn't be any harder to acquire bags there?
 
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#628
benjinito said:
This makes sense as a corporate policy. Yet, anecdotally, high traffic stores (Beverly Hills, Madison, San Francisco, Seattle, etc.) are considered, at least on tPF, to be more competitive.

How could both be true at the same time? If higher revenue stores get allocated more bags, theoretically it shouldn't be any harder to acquire bags there?
Click to expand...
These are some good points.

One way I can see the system making sense/being true is under two circumstances. Both of them assume that the repeat, local, high spenders subsidize those with a lower spend.

1) Tourists can walk out with a bag after one or two shopping trips in which they spend 1:1 or 1.5:1, which is still high but less than locals who have to spend, say, 2:1 or 3:1. This might be why we hear in non-touristy and probably lower sales stores, "we show loyalty to our local customers." Where sales are low, I don't think stores get the liberty of sending bags out the door with low/no prespend. Again, I believe it'd send up red flags to management/HQ that there's resale collusion going on.

and

2) In these stores compared to elsewhere, Hermes gives newer clients their first bag with a much lower average spend. They then pay out the nose to aquire bags 2, 3, and so on. Or, a customer doesn't come bag to pursue bag 2 because they're happy with the one. Either way, more bags go out, but there's still an expectation of a higher average prespend.

Still, it wouldn't surprise me if Hermes made some adjustments with its bag allocation system to align with the cost of living standards. In other words, if they said along hypothetical lines of, "NY stores, you have to get $25k in sales for a bag because a $100 twilly is nothing for a person making $200k a year, but in Denver where the average salary is $80k and that purchase is more impactful, they'll get a bag for every $20k in sales." While there are billionaires in every city, I don't think there are enough that the company foregoes catering to the middle-upper class, who still have a degree of price sensitivity towards luxury goods.
 
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#629
benjinito said:
This makes sense as a corporate policy. Yet, anecdotally, high traffic stores (Beverly Hills, Madison, San Francisco, Seattle, etc.) are considered, at least on tPF, to be more competitive.

How could both be true at the same time? If higher revenue stores get allocated more bags, theoretically it shouldn't be any harder to acquire bags there?
Click to expand...
I think its because higher revenue stores have a long list of loyal clients and also high spenders who had been shopping there for years (hence the higher revenue store). Bigger stores have more stocks but is also a lot more competitive. If smaller stores have 50 bags per shipment and 500 clients, im assuming its 5 or 10x more for bigger stores so it doesnt change the wait time for bags as well unless you walk it under the right circumstances.
 
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#630
Hankypanda said:
This was very well said, educational, and a refreshingly diplomatic and validating way to remind people "it's just stuff" without seeming dismissive and harsh toward others who have felt shunned at one point by a luxury brand. It's a gentle reminder to reframe that it's just shopping, not a character contest or anything.

I do have a question, when it is said that all Hermes bags are hand made by usually a single artisan does this mean all of their bag offerings or just the Birkin or Kelly? Non-quota bags can be hard to get from the store, as well. I wonder if it has to do with the popularity of Hermes post covid and them being at slightly more approachable price point, or if their production is still small scale across all items.

Thank you for your insight.
Click to expand...
If im not mistaken, all Hermes bags are handmade even the non quota bags. It’s one of the luxury houses that values craftsmanship and heritage :smile:
 
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