One of the world's best-known and most expensive luxury retailers is embroiled in a new lawsuit sparking debate over whether customers have a legal right to buy its products. Filed in California last month, the lawsuit revolves around Hermès' Birkin handbag, one of the most exclusive luxury items in the world. Sold only at the brand's retail stores, the cheapest variant starts at $10,145; higher-end versions have been sold for more than $100,000. The lawsuit alleges that Hermès only sells Birkins to customers with a "sufficient purchase history," claiming that a plaintiff was "coerced into purchasing ancillary products" to "obtain access" to a Birkin. This represents a violation of antitrust laws, the lawsuit claims, because of the "unique desirability, incredible demand and low supply" of Birkins.
Questionable grounds Many legal experts are "dubious on the suit's merits" because Hermès "does not control the robust secondhand market for its bags," Amanda Mull said at The Atlantic. While rare, there are instances where "people sometimes do just walk into a boutique off the street, ask nicely and get lucky."
Hermès "has it in the bag" on this We lawsuit, Susan Scafidi, of Fordham University's Fashion Law Institute, said to The Washington Post. The luxury brand "doesn't tell buyers how much they need to spend to gain access to the Birkin," making it harder for the plaintiffs to pinpoint a specific instance in which Hermès is breaking antitrust laws.
Additionally, a judge is "more likely to rule that a sales practice violates the law when the item in question can be deemed a necessity," Douglas Hand, a lawyer who works with high-end fashion brands, said to The New York Times.
'Preconditioning' purchases A Birkin bag might not be a necessity, but when it comes to Hermès' practices, the law says it's illegal, Shaun Setareh, a lawyer representing the plaintiffs, said to the Times. This is because Hermès is "preconditioning buying other products."
No matter how the courtroom antics play out, the luxury goods industry will be watching to "gauge the wider implications," said Joan Kennedy at CNN. But Hermès is "driven by supply, not demand," said Erwan Rambourg, the global head of consumer and retail research at HSBC. "You buy luxury to be part of the club.… It defeats the purpose if the club is open to everyone." |