Hermès faces a legal battle over its sales strategies related to the famous Birkin handbag. A lawsuit filed by shoppers in California accuses the brand of breaking antitrust laws by enforcing a purchase history requirement. The complaint, filed in San Francisco, claims that Hermès is “tying” the purchase of a Birkin to the necessity of buying other items from the brand first.
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Known for its exclusivity and status symbol reputation among the affluent, the Birkin bag, named after actress Jane Birkin, has prices ranging from $10,000 to over $100,000. These luxury items are exclusively available at Hermès retail outlets, contributing to their allure and scarcity. The lawsuit illuminates a compensation structure for Hermès sales associates that incentivizes the sale of various products such as shoes, scarves, belts, and home goods, excluding Birkin bags, allegedly to support the company’s controversial sales strategy.
According to NPR, court documents state that one plaintiff alleges being manipulated to buy additional products, referred to as “Ancillary Products,” to gain access to a Birkin bag despite having previously spent large amounts at Hermès. This strategy reportedly prevented her from purchasing another Birkin in September 2022. Another plaintiff claims he was consistently informed that he must buy other Hermès items before being eligible to purchase a Birkin bag, a goal he ultimately could not achieve.
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The complaint argues that the “unique desirability, incredible demand, and low supply” of the Birkin handbags endow Hermès with “incredible market power,” potentially violating antitrust laws outlined by the Federal Trade Commission. This situation arises if a seller has significant market power in the product being “tied” and leverages this to sell another product, an arrangement that could infringe upon legal statutes. The plaintiffs seek class-action status for their lawsuit, aiming for damages awarded to all affected parties and a court order to prohibit Hermès from continuing these alleged illegal practices.
As the lawsuit progresses, it will test the boundaries between luxury brand exclusivity and the application of antitrust laws, potentially setting a precedent for how luxury goods are marketed and sold. Hermès has yet to respond to the allegations, leaving industry observers and legal experts watching closely as the case unfolds.