Why Rich Shoppers Get So Angry About Hermès

Should you want to own an Hermès Birkin handbag, there are two main reasons that’s probably not in the cards. The first limiting factor is that even in its smallest size and most basic format, the Birkin, which has been one of the luxury industry’s ultimate brass rings for decades, has a starting price tag of more than $11,000—roughly what you’d currently pay for a gently used 2013 Honda Accord. The second is that even if you have the money, one does not simply waltz into one of the hundreds of Hermès boutiques worldwide and walk out with their bag of choice, and certainly not a Birkin. There are too few of these bags—of most types of Hermès bags, at this point—to satisfy everyone willing to pay up, even at five-figure prices. And if they’re in stock, they probably still aren’t available to you.

For a chance at getting a Birkin, you have to play the “Hermès Game,” according to aspirants who gather online to discuss what they’ve gleaned about its vague rules. Most agree that in order to increase your odds of being offered a Birkin or Hermès’s similar (and similarly popular) Kelly bag, you need to build a purchase history at an Hermès store by buying products that are more readily available—shoes, home goods, silk scarves, jewelry. Nothing Hermès sells is affordable, so building such a history would cost, at a minimum, thousands of dollars. Prospective customers commonly report being told by sales associates, who are said to have broad authority over how coveted bags are meted out after arriving in stores, that priority for scarce products goes to loyal customers. How much one would have to buy in order to demonstrate loyalty, relative to your competition on any given boutique’s client list, is anyone’s guess. The overwhelming majority of people are going to be turned away when they ask for a Birkin, even if they pick up a pair of sandals and a few bangles here and there.

You can probably guess how this goes over. People with enough money for a frisky little Birkin purchase are generally not used to hearing the word no, and some of them react to it like their civil rights are being violated. According to a lawsuit filed in California last month by two people who recently had no luck buying a Birkin (though one of them already owned at least one of the bags), what has been violated is actually federal antitrust law. Hermès has a monopoly on Birkin bags, so the suit alleges, and the Hermès Game amounts to tying, a potentially anticompetitive practice in which buyers are required to purchase additional, unwanted goods as a precondition of receiving a desirable product.

Hermès did not respond to a request for comment. So far, legal experts seem dubious on the suit’s merits. Hermès does not control the robust secondhand market for its bags, and people sometimes do just walk into a boutique off the street, ask nicely, and get lucky. But the lawsuit’s very existence is a glimpse inside the luxury industry’s most precarious balancing act: How do you sell putatively rare things at corporate scale?

The most important thing to understand about why Hermès bags drive so many people wild is that they’re actually pretty rare, compared with the products made by the brand’s closest competitors. Hermès is a huge company—it has a bigger market cap than Nike—but it has mostly resisted modern, high-capacity manufacturing methods. Instead, it has trained an army of traditional leatherworkers and other tradespeople to do things the old way at a large scale. Birkins and Kellys are assembled by hand, beginning to end, by a single craftsman. According to a 2019 story in T, The New York Times’ style magazine, the process for the Kelly takes 20 to 25 hours of work; for certain Birkins, some estimates put it at as high as 40 hours. Those practices put a hard limit on supply that can’t be quickly or easily raised, and they also help Hermès and its fans spin a compelling tale about why its prices—high even among luxury brands, though not by as wide a margin as they once were—are justifiable. If anything, the lively resale market for Birkins, where pristine bags almost always sell for more than their retail price, suggests that the brand is undercharging relative to what customers will bear. Luxury is an industry built on hierarchy, and when it comes to handbags, Hermès is alone at the top among global brands.

All of this—the European workshops, the training academy for craftspeople, the plying of centuries-old trades—is the stuff that many of Hermès’s competitors encourage you to assume that they, too, must be doing, by virtue of being based in France or Italy and selling very expensive things under an extremely old name. The reality is a little different. It’s true that most of these brands do still operate ateliers and workshops where old-school craftsmen develop new designs or manufacture the company’s most expensive tier of products. Even so, modern luxury is a high-volume business that has been modernized, scaled up, and made far more efficient, most prominently by LVMH, the corporate conglomerate that owns brands including Louis Vuitton, Dior, and Fendi. Many of the changes LVMH implemented are now standard operating procedure for major brands at large. Scale and efficiency mean less handwork and greater speed on a larger number of products. The biggest players have at their disposal a staggering array of material resources and mammoth capacity to produce goods, many of which are created by methods and available in quantities that are not especially distinct from other types of consumer goods.

This glut is the paradox at the heart of the luxury industry. These goods derive cultural and monetary value from scarcity, but there are relatively few situations in which demand genuinely outstrips supply. Luxury brands, then, must manufacture the illusion of scarcity, which is one reason that limited editions and collaborative releases have become so popular—they impose brief bouts of lack on top of industrial abundance. The regular stuff, which is what most people buy anyway, is still there waiting for you, no matter where you are, if you want to pony up.

Over the decades of growth that have turned the executives of these luxury conglomerates into some of the richest men in the world, their wealthy customers have settled into a routine that flatters a sense of exceptionalism: What the customers want is almost always available to them, and that availability still feels special and enticing because those products are theoretically not available to some unseen other, even as sales of those exact same products tick ever upward worldwide. Buying luxury goods isn’t intoxicating to so many people because they all love fine craftsmanship, or even necessarily because they all want everyone to know exactly how much money they have. At least in part, it’s because arriving at a velvet rope and being let inside is a thrill, and modern luxury businesses have found ways to preserve that feeling while raising the velvet rope for as many paying customers as humanly possible.

When customers groomed into this kind of acquisitive ease encounter actual, material scarcity from which they are not exempted—when, say, a Birkin isn’t available to them even though they have $15,000 to spend—the effect can be combustible. The market’s paradox, which brands are adept at keeping out of sight and out of mind, becomes just a little too visible. Luxury goods, at least in the truest sense of the term, aren’t infinitely scalable—intense investments of resources, materials, skill, labor, and time are inherent to the enterprise, and their limitations cannot be fully mitigated.

But the luxury industry has changed since the days when handcraft dominated what was then a much smaller and far less efficient market. The term now refers less to the exceptional material attributes of an object and more to its price point, which was a trade-off made to turn the business into a fabulously profitable global juggernaut. Most of these goods aren’t rare; they’re merely expensive, which is sort of obvious if you think about it for too long. Which is why Hermès drives so many wealthy customers to distraction. Its velvet rope is one of the last that a single credit-card swipe isn’t guaranteed to lift.

The Atlantic

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