A class action lawsuit in California, US has accused French luxury group Hermès International of violating antitrust laws by allegedly forcing customers to purchase some of its other products to get a chance to purchase the rare and popular designer Birkin bags.
- California residents Tina Cavalleri and Mark Glinoga filed the lawsuit 19 March in the San Francisco federal court.
- The plaintiffs have demanded a jury trial over a violation of the Sherman Act, two counts of violation of the Cartwright Act, and a violation of the Unfair Competition Law.
THE BAGS: Hermès sells its products directly to consumers through Hermès-owned retail stores and (except for Birkin handbags) through its website hermes.com. Hermès currently operates approximately 43 retail stores in the US with eight of those retail stores located in California.
- Hermès is well known for its famous Birkin and Kelly handbags (collectively “Birkin handbag”), which are exclusive Hermès design.
- Each Birkin handbag is handcrafted from the finest leather by experienced artisans in France. The manufacturing of a single Birkin handbag requires many hours of an artisan’s time. The intensive labour and craftmanship and high-quality leathers required make the Birkin handbag difficult to produce and expensive.
- The price of a Birkin handbag ranges from thousands of dollars to over one hundred thousand dollars. The Birkin handbag is an icon of fashion.
- In the second quarter of 2021, Hermès’ sales for the leather and saddlery division, which includes the Birkin handbags, more than doubled from a year ago and rose by 24% from their pre-pandemic June 2019 levels.
KEEPING BIRKIN OUT OF SIGHT: The unique desirability, incredible demand and low supply of Birkin handbags give Hermes incredible market power. Hermès is accused of implementing a scheme to exploit this market power by requiring consumers to purchase other, ancillary products before they will be given an opportunity to purchase a Birkin handbag.
- Birkin handbags cannot be purchased through the Hermès website. Instead, consumers can only purchase Birkin handbags by physically going to a Hermès retail store. However, unlike most consumer products—and most other products sold by Hermès—consumers cannot simply walk into a Hermès retail store, pick out the Birkin handbag they want and purchase it.
- Birkin handbags are never publicly displayed for sale at Hermès retail stores. It is often the case that there are no Birkin handbags at all at Hermès retail stores or, if there are, there are only one, two or at most three Birkin handbags.
- But even if there are Birkin handbags at a particular Hermès retail store, the handbags are not displayed on the sales floor for the general public. Most consumers are never shown a Birkin handbag at Hermès retail store.
- Typically, only those consumers who are deemed worthy of purchasing a Birkin handbag will be shown a Birkin handbag (in a private room). The chosen consumer is given the opportunity to purchase the specific Birkin handbag which they are shown.
- Consumers cannot order a Birking handbag at the retail location. For all practical purposes, there is no way to order a bag in the style, size, colour, leather, and hardware that a consumer wants.
