Sunday 24 March 2024

Hermès sued in California For Unfair Practice's Around Birkin Sales Model.


Luxury goods have long been acknowledged as having odd requirements in to to obtain the most desirable types of these.  The most significant being the requirement to spend large sums of money in order to acquire them.  Yet, beyond this, many brands seem to require consumers to purchase large quantities of "standard" luxury goods before being permitted to buy the "exclusive" pieces.  Watch dealers are most notable for this, and Hermes with it's Birkin bags has also been said to do it, and two American consumers are so upset, they are suing Hermès for antitrust practices.

The two individuals action, the filing of which can be seen here, allege that Hermès "require" customers to purchase "ancillary" products before offering them the right and opportunity to buy a Birkin, which is an illegal and unfair marketing practice known a "tying".  The crux of the lawsuit appears to be that after spending many thousands of dollars on Hermès product's, those that brought it were told that Birkin's are "reserved for clients who have been consistent in supporting the brand's business".  Interestingly, Hermès CEO Axel Dumas directly responded to an accusation on this point in 2023, and told Business of Fashion that Hermès did not engage in the practice at all.  

The reality is that, despite our enjoyment of luxury goods, demonstrated by our writing about them, beyond a certain point they are merely marketing.  In many cases, luxury versions of simple everyday goods sell for hundreds of times the cost of unbranded versions.  We have written on some of the most egregious examples, such as Loro Piana's £175 plastic frisbee.  There is nothing that will ever make a plastic frisbee worth £175, and in truth, there's not really anything that makes most luxury goods worth what people pay for them.  

Creating artificial scarcity, and clever advertising tricks, are these businesses only real methods to trick consumers into thinking they are worth even close to the prices they ask.  Any reasonable consumer would know this, and we suspect the litigants in this matter are taking action from emotion rather than reason.  Probably because they feel bad they weren't allowed to buy a Birkin.  We doubt this lawsuit will succeed, however, it may bring some unwanted attention to the practice, and in our view, this is rather more likely to be the rationale of those who initiated it.  Sour grapes?  Most certainly.  Possibly effective in causing damage to Hermès?  Maybe.

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