Hermes and The US Consumer - A War of Fairness?
The major Fashion House of Hermes is currently engaged in a lawsuit filed by a couple in California - their gripe? That the Birkin bag is inaccessible. The couple alleges that the brand refuses to accept their money as payment for the bag, instead running them through hoops of purchasing other items just for a chance to lay eyes on the bag. In many cases, up to $350,000 dollars worth of merchandise not desired. They claim this is a violation of US Antitrust Law’s Sherman Act, and are pursuing it as such. As a result. Hermes has retained Latham & Watkins as their defense counsel, a firm known for efficiently dealing with these disputes.
As the case continues, there is the ever growing highlight of the balance of business. On one hand, the consumers feel as though their efforts are wasted, as if an intangible, discriminate exclusivity dictates their fashion desires and eligible means to procure the bag. On the other hand, Hermes feels as though it is maintaining its identity, its brand history, and exercising its right to conduct business as it wishes. Even as someone studying the field of business law, this is a precarious situation that could genuinely go both ways, with not only repercussions in business law precedent, but in the world of fashion as well.
Therefore, a thrilling exercise would be to examine these repercussions. First, the effects should the plaintiffs succeed in their lawsuit. This would majorly affect heritage-based luxury brands at their core, specifically opening up the door as a precedent to future lawsuits. Where there is one, there is many, especially as our legal system is based on the precedent, or Stare Decisis system to support suits and their decisions. The way I see it, should this lawsuit break open Hermes’ exclusive acquisition process, what’s stopping consumers from raising similar issues with other brands? Challenging Chanel’s large price hikes every year, or contesting the traditional size ranges offered in Ready-To-Wear - this gives consumers the power to directly address what they’re not happy with from these brands in a court of law, compared to the lower-stakes court of public opinion in terms of permanence.
Additionally, Heritage brands are built on the back of exclusivity; the paradox of value in desire, but losing it in being attained. Another possibility is that it could be ruled Hermes is to stop their current method of sale in the US, and abide by more traditional pay-to-buy-upfront methods in store. This could potentially creative a massive swerve for the brand in the US - the bag could oversaturate the market with its accessibility, ultimately losing value, or conversely, become even more coveted and draw overseas consumers to the US. To an overseas consumer, they could come to the US and purchase it under American upfront law for a fraction of the price, much like Americans do in Europe with brands like Gucci and Prada to avoid higher prices they’d pay in their home market.
On the other end, should Hermes come out of the lawsuit victorious, it would be a reflection of the American emphasis of laissez-faire economy, and the voice of the free market. Additionally, it would strengthen the power of the luxury market by offering it legitimacy in the eyes of the American court - in other words, it would uphold the societal value we place on luxury items, and maintain these items as not only status symbols, but items worth investing in. Especially with the current political climate and high spike in tariffs, it’s entirely possible there is a vested interest in maintaining this income source for the country as it makes revenues from these import taxes and quotas. The harmony of the industry with the ideals of both the market and the law are crucial determinants to the direction of this suit as we watch it unfold.
