Luxury fashion house sued over Birkin bag sales

Hermes is facing an antitrust class action which alleges it only allows customers with "sufficient purchase history" to buy the infamous Birkin handbags.

The French luxury fashion house is being sued in California in a case that claims sales associated are pushing customers to buy other items to access the coveted "icon of fashion" - an illegal tying arrangement.

The Birkin handbag was introduced in 1984 and pricing typically starts at US$10,400. Some Birkins sell for far more, including one bag that retailed for US$2 million in 2012; even pre-owned Birkins can sell for tens of thousands of dollars.

The bags are not able to be bought online and are not displayed in Hermes stores for the general public. The lawsuit alleges "only those deemed worthy" of buying the Birkin will be shown the handbag, typically in a private room, and they can only buy the Birkin they are shown - they cannot order a particular colour, style or size.

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"The unique desirability, incredible demand and low supply of Birkin handbags gives [Hermes] incredible market power. [Hermes] implemented a scheme to exploit this market power by requiring consumers to purchase other, ancillary products from [Hermes] before they will be given an opportunity to purchase a Birkin handbag," the lawsuit claims.

"With this scheme [Hermes] were able to effectively increase the price of Birkin handbags and, thus, the profits that [Hermes] earn from Birkin handbags."

The case alleges sales associates' remuneration is structured so they follow the process of only offering Birkins to those customers that have bought sufficient merchandise previously.

"Sales associates are paid 3% on ancillary products such as shoes, scarves, belts, jewelry and home goods; they are paid a 1.5% commission on non-Birkin handbags, and they receive no commission whatsoever on the sale of Birkin handbags," documents state.

"Although Hermès sales associates receive no commission on the most valuable and sought-after products sold by their employer, they are instructed by [Hermes] to use Birkin handbags as a way to coerce consumers to purchase ancillary products sold by [Hermes] (for which the sales associates receive a 3% commission) in order to build-up the purchase history required to be offered a Birkin handbag."

A plaintiff in the case had spent tens of thousands of dollars at Hermes before gaining access to the Birkin. When they attempted to purchase a second, they were told specialty bags go to "clients who have been consistent in supporting our business," the suit claims. Another plaintiff claims they were told by a sales associate to buy ancillary products before they'd be given access.

The bag has become such a status symbol that in 2021, even during the COVID-19 lockdowns, the Hermes division responsible for the Birkin recorded some of its highest sales, doubling its 2020 sales and rising 24% on pre-pandemic levels.

Hermes has so far not commented on the class action.