Disclaimer: yes, the company and bag that I'm writing about today are unaffordable for 99% of Americans (made-up statistic but probably not far off). But, they are also the subject of so much litigation, and I love talking about them. While this lawsuit only directly affects the 1%ers, it could still have a potential impact on consumers more generally. So, please keep that in mind, go with it for the purposes of this post, and do not come for me in the comments. These are champagne problems, but they might also be antitrust problems.
Go into any Hermes store and tell them that you want to buy one of their famous Birkin bags. Wait for response. Exit in humiliation.
That's because you can't buy a Birkin bag. Money can't buy a Birkin bag. You know what buys Birkin bags? A purchase history with Hermes, time, patience, and a huge stroke of luck.
How it works: you tell an Hermes sales associate you want to buy a Birkin. Your name is entered on the sales associate's roster along with all the other (wealthy) hopefuls waiting for their chance. A Birkin bag comes into an Hermes store (Fun fact: There are none available for purchase in the store, and you cannot buy them online.). Through some system, the bag is assigned to a sales associate. If you're lucky, it's your sales associate, and now you are one step closer. From there, sales associates are enocuraged to select someone with a sufficient "purchase history" of ancillary products (scarves, watches, bracelets, etc.) (i.e. everything but the Birkin).
"Sales Associates are paid 3% on ancillary products such as shoes, scarves, belts, jewelry and home goods; they are paid a 1.5% commission on non-Birkin handbags, and they receive no commission whatsoever on the sale of Birkin handbags. Although Hermès Sales Associates receive no commission on the most valuable and sought-after products sold by their employer, they are instructed by Defendants to use Birkin handbags as a way to coerce consumers to purchase ancillary products sold by Defendants (for which the sales associates receive a 3% commission) in order to build-up the purchase history required to be offered a Birkin handbag."
Well, Tina Cavalleri and Mark Glinoga are done buying overpriced silk scarves! On March 19, 2024, they filed a putative class action alleging that Hermes is violating federal antitrust laws and other state unfair competition laws through its practice of requiring them (and other consumers) to build this "purchase history" by buying ancillary products that they don't actually want in order to purchase the product they do want: the Birkin. Both plaintiffs allege they couldn't buy a Birkin because of Hermes' illegal tying practices. You can read the complaint below.
We will see how far this litigation goes. This lawsuit challenges what is probably the core feature of Hermes' business model, and I suspect there will be a settlement before we get close to a court ruling. But, hold your horses, and let's see what happens!
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