Birkin bags are too hard to buy, shoppers allege in an antitrust lawsuit

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CNN
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Birkin handbags are some of The most expensive and most exclusive bags in the world. Hermes produces a limited number of Birkins and They can sell For about $450,000. And just getting money often is not enough.

A new lawsuit filed by two California customers who couldn't afford Birkin bags alleges Hermès has a monopoly and says the way the company sells Birkin is a violation of antitrust law.

Customers say they have been told that before they are allowed to purchase a Birkin bag, they must first purchase other Hermès goods and accessories. They claim that Hermès has dominant power in the Birkin handbag market, making it illegal for the company to link handbag sales to customers who purchase other products such as shoes, scarves or belts.

“Consumers are forced to buy additional products from [Hermès]“To buy a Birkin bag,” the complaint alleges. “This is anticompetitive and restrictive conduct.”

U.S. law prohibits monopolies from using forced purchasing — or “tied” sales — to gain sales in other markets they do not dominate, and to make it more difficult for rivals to compete.

The lawsuit alleges that Hermès' “tying arrangements” allowed the company to increase the price of Birkin bags and the profits the company made from Birkins.

Paris-based Hermès did not respond to CNN's requests for comment on the lawsuit. Its website claims that each Birkin is made, from start to finish, by a single craftsman.

Antitrust lawyers say the case against Hermès will be difficult to prove. But even if it fails, it could be detrimental to the company's image.

Birkin bags are a symbol of rare wealth.

Getting Birkin bagwhich can sell for anywhere from $10,000 at retail to a record premium of $450,000 at auction, directly from its manufacturer. Difficult feat – This is often achieved through stardom Or at least a Spending history With Hermes. The brand only produces a limited quantity for sale each year and the bags are not sold online.

“Ordinarily, only those consumers deemed worthy of purchasing a Birkin handbag will be offered a Birkin handbag,” the complaint says. “For all practical purposes, there is no way to order a bag in the style, size, color, leather and hardware that the consumer wants.”

A 2022 report from Credit Suisse and Deloitte said Birkin sales rose 38% in 2020, as the value of luxury collectibles rose during the Covid-19 pandemic, and as sellers mentioned Record premiums in 2021. In November of that year, Christie's sold an alligator-skin version for nearly $390,000, the second-highest price ever paid for a handbag at auction at the time.

Hermes, which went public in 2013, hit its highest price ever in trading on Tuesday.

To win, a lawsuit must prove that Hermès is a monopoly and that the strategy of linking its products is illegal.

Antitrust experts say both face significant hurdles.

“It's particularly difficult because, right now, it's difficult to prove a monopoly claim. In addition, they have to prove a relationship,” said Christine Bartholomew, a professor at the University of Buffalo School of Law.

Hermès will likely claim that its tactics were intended to maintain brand loyalty in a competitive market, and plaintiffs will have to refute that, Bartholomew said.

Plaintiffs face an uphill battle claiming a monopoly, said John Mark Newman, a University of Miami law professor and former deputy director of the Federal Trade Commission's Bureau of Competition.

However, even if they lose, it has already highlighted an alleged practice that could be embarrassing for shoppers.

“At least according to the complaint, Hermès representatives told these people that they were not good enough to buy a Birkin bag,” Newman said. “These plaintiffs may in part just want to tell their story to the world. If so, they have certainly achieved that goal already.”