The Birkin bag is not only a status symbol among many A-listers but is also sought after by many others and obtained by a few. On Tuesday, two Californians filed a complaint in a federal court in Northern California. The suit alleges that Hermes, the company that makes the exclusive Birkin bag, has violated antitrust and business practice laws.
Plaintiffs Tina Cavalleri and Mark Glinoga filed a lawsuit against Hermes in California. The suit alleges that the Birkin bag maker has a “scheme to exploit the market power of the Birkin bag, a bag that is much in demand for its exclusivity. It said that consumers were required “to purchase ancillary products” before they are allowed to buy the bag.
The filing reads, “In other words, consumers are coerced into purchasing ancillary products from Hermes because they want to purchase Birkin Handbags. This is anticompetitive, tying conduct.”
According to the California Business and Professions Code, as well as federal and state trust laws, “tying” purchases violates these laws as consumer choices are limited, and the cost of a Birkin bag artificially increases.
The plaintiffs, Tina Cavalleri and Mark Glinoga described their problems when they tried to purchase a Birkin bag. According to the lawsuit, when Cavalleri contacted Hermes to buy another Birkin bag, she was told that “clients who have been consistent in supporting our business” would get the option of purchasing their specialty bags. She already owns at least one Birkin.
Glinoga said in the lawsuit that he made multiple attempts to buy a Birkin bag, but every time he tried, he was asked “to purchase other items and accessories.”
Birkin maker Hermes is not the only luxury goods maker that offers exclusive deals to specific customers. The Business of Fashion has reported that luxury brands such as Rolex, Celine, and Chanel face accusations of “tying” practices.
France-based Hermes is the only luxury goods maker that has posted high growth of 34 percent this past year, while other luxury goods makers are facing declining sales and a slump in stock, mainly due to low retail demand in Asia.
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