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Hermès Sued for Restricting Birkin Sales – Why Are These Bags So Expensive?

Last Updated March 21, 2024 7:02 PM
Samantha Dunn
Last Updated March 21, 2024 7:02 PM
Key Takeaways
  • Hermès faces a lawsuit for allegedly requiring customers to have a significant purchase history before allowing them to buy Birkin bags.
  • The lawsuit claims this practice violates antitrust laws by tying the sale of Birkins to the purchase of other Hermès products.
  • Plaintiffs seek class-action status and demand an end to these sales practices along with unspecified monetary damages.

Two Californians have initiated a class-action lawsuit  against the luxury brand Hermès, accusing it of an exclusive sales strategy that limits the availability of its coveted Birkin bags to consumers with a substantial purchase history.

This practice, they allege, contravenes federal antitrust laws by mandating the acquisition of additional products to qualify for a Birkin purchase.

The Cult of The Birkin Bag

Regarded as a symbol of luxury and exclusivity, Birkin bags are renowned for their craftsmanship and hefty price tags, often reaching tens of thousands of dollars.

The lawsuit sheds light on the clandestine sales approach of Hermès, where only selected customers are shown the prestigious bags, usually in private settings within their retail stores.

This exclusivity has contributed to the Birkin’s status as a fashion icon but is also the reason behind Birkin’s recent lawsuit.

“Supply and Demand” Driving Luxury Brands Worldwide

A Sotheby’s blog post addresses the hefty price tag of a Birkin  bag. It’s worth noting that the prestigious auction house regularly includes Birkins alongside its various works of art.

According to Sotheby’s the economics of supply and demand has driven Birkin prices for the last 10 years. “In some cases a Birkin can sell for multiples of the original retail price. A leather Birkin bag purchased directly from the store starts at $9,000 and can sell for $30,000 depending on size, color, material and condition” Sotheby’s notes.

Statista luxury market 2023
Brand value of the leading 10 most valuable luxury brands worldwide in 2023. (Credit: Statista)

As per Statista , Hermès was the second most valuable luxury brand worldwide in 2023. Birkin bags make great investment pieces, yielding an average 26.7 percent premium on their original retail price.

Legal Challenges and Corporate Response

The legal action against Hermès aims to represent thousands of U.S. consumers affected by Hermès’ sales practices, demanding an injunction against these methods and seeking unspecified damages.

Hermès, which operates numerous stores across the U.S., has yet to respond publicly to the allegations. The outcome of this lawsuit could have significant implications for the luxury retail industry, especially regarding how high-demand products are marketed and sold.

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