Hermes is accused of only offering Birkin bags to select customers in private rooms, excluding them from their website and regular stores. Tina Cavalleri and Mark Glinoga filed a complaint in federal court in San Francisco, alleging this practice is unfair and violates antitrust laws.
Even after four decades since Hermès unveiled its legendary leather handbag, shoppers are still plotting ways to acquire enough luxury items from the renowned French brand to convince a salesperson to offer them a Birkin bag. The luxurious Birkin handbag, handcrafted in France, is a coveted symbol of status among the wealthy worldwide, with prices soaring over $US100,000 ($151,830).
Hermès' stocks have been on fire, surpassing even top luxury brands like LVMH and Kering. While LVMH struggled to make gains and Kering saw a drop in shares, Hermès soared over 30% in the past year. The secret to their success? Embracing exclusivity and focusing on quality over quantity.
Expanding its reach by opening new stores, hiring thousands of artisans, and venturing into affordable makeup products, can this long-standing family business uphold its prestige? According to Simeon Siegel, a retail analyst at BMO Capital Markets, the constant pursuit of growth in retail can potentially tarnish a brand's image.
However, Two California locals took legal action against Hermès on Tuesday in the Northern District of California, initiating a class-action lawsuit against the high-end Parisian retailer. The lawsuit alleged that Hermès was illegally linking the acquisition of Birkin bags to the purchase of their other items. Implying Hermes International is violating US antitrust laws by making the bag so exclusive.
Hermes imposes strict requirements on who can purchase these rare bags, forcing potential buyers to spend thousands of dollars on other products in order to even have a chance at acquiring the sought-after leather totes. A lawsuit filed on Tuesday, seeking class-action status, aims to challenge this practice.
Hermes is accused of only offering Birkin bags to select customers in private rooms, excluding them from their website and regular stores. Tina Cavalleri and Mark Glinoga filed a complaint in federal court in San Francisco, alleging this practice is unfair and violates antitrust laws.
According to Cavalleri, she has spent a significant amount of money at Hermes but was still pressured into purchasing other items in order to be considered for a Birkin bag. In the lawsuit, she claims that in September 2022, she was informed that the bags were only available to loyal customers who consistently support the business.
Mr Glinoga stated in the lawsuit “made multiple attempts to purchase a Birkin bag, but was told on each occasion he needed to purchase other items and accessories”. He was not able to purchase the bag.
Hermes is facing a lawsuit alleging that their compensation structure for sales associates encourages the controversial practice of linking the sale of Birkin bags to other items. The lawsuit claims that while associates do not earn commission on Birkin bags, they do on other, less expensive Hermes products. The handcrafted Birkin bags can cost anywhere from tens of thousands to over $100,000, as stated in the lawsuit. The plaintiffs are pursuing compensation, damages, and a demand for Hermes to change their sales strategies.
The case is Cavalleri v Hermes, 24-cv-01707, US District Court, Northern District of California (San Francisco).
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