Wednesday, November 6, 2024

Hermès: Birkin mad

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Got lots of money, and want to spend it on a Birkin bag? That’s nice. Now get in the back of the line.

I read a fantastic quote this week from self-proclaimed Hermès superfan, Alex Pardoe: “Hell hath no fury like a wealthy person told no”. Recalling the many times he has witnessed “grown men and women having five-star meltdowns” in the Hermès flagship store in Paris, Pardoe’s wit paints a vivid picture of these luxury-induced tantrums.

The outbursts, Pardoe explains, are invariably triggered by the same scenario: a wealthy individual walks into the store, confidently requests to purchase a Hermès Birkin bag – the very epitome of high-status handbags, often priced at $10,000 (~R185,000) or more – only to be informed that none are available. Cue shrieks of fury.

This scene is a common occurrence, as Birkins (according to luxury handbag lore) are far from ordinary commodities that can be picked up off the shelf. The process of acquiring a Birkin involves more than just having deep pockets. The bags are produced in limited quantities and their allocation is often at the discretion of the sales associates, who tend to reserve them for their most favoured clients. And how does one become a favoured client? By spending money on other Hermès items, of course.

In a world that demands instant gratification and customer satisfaction (and in which cash is usually king), I can understand why it might be a novel experience for people to be told that they need to be pre-selected in order to be allowed to purchase something.

How did Hermès manage to create this reality without instantly alienating its ultra-wealthy consumer base? This writer thinks it has something to do with the thrill of the chase. But before we start theorising, let’s start at the very beginning.

The supermodel and the straw basket

In 1984, a chance encounter on a flight from Paris to London led to the creation of one of the most iconic handbags in fashion history. Hermès chief executive Jean-Louis Dumas found himself seated next to actress and singer Jane Birkin. Just two days earlier, Birkin’s signature straw basket had been run over by her then-partner, Jacques Doillon, forcing her to use a different travel bag. As she attempted to stow the bag in the overhead compartment, its contents spilled out, prompting a scramble to gather her belongings.

During their conversation that followed, Birkin lamented to Dumas about the difficulty of finding a leather weekend bag that suited her needs. She wondered aloud if Hermès could produce a larger, more practical version of Hermès’ famous Kelly bag. This offhand comment sparked an idea in Dumas.

Inspired by Birkin’s plight and her suggestion, Dumas set out to design a new bag. Drawing from an earlier Hermès design, the Haut à Courroies, which dated back to around 1900, he created a supple black leather bag that combined elegance with practicality, and named it after the woman who inspired its creation.

The method behind the madness

Hermès’ Pantin workshop is one of four in France, with others in Ardennes, Lyonnais and Lorraine, but it is exclusively at Pantin where the iconic Birkin bag is crafted. Creating a Birkin takes at least 18 hours, varying by size, materials and embellishments.

Artisans train for at least five years before making a Birkin independently, ensuring mastery of traditional techniques, consistency and exceptional skill. Each Birkin is handcrafted by a single artisan using medieval leatherworking techniques and specialised tools like awls, needles, and pinces-à-coudre. They must master the saddle stitch, where two needles are pulled through the same hole in opposite directions, and finish by polishing the seams with beeswax to perfection.

Hermès produces an estimated 70,000 Birkin bags each year, yet the Birkin remains one of the most coveted luxury items. It’s hard to find reliable information online as this is such a closely guarded space, but back in 2006 the waiting list reportedly extended up to six years, highlighting its exclusivity and high demand.

That’s all well and good. We have a heritage brand, an interesting backstory and an undeniable dedication to quality. Almost every other luxury brand could claim to have the same. So what is it about Hermès in particular that renders consumers willing to participate in their buy-in games?

“The Scientology of purses”

On the subreddit r/handbags, a user named Dismal_Ad411 asks the question: “How much did you spend at Hermès before being offered the Birkin?”.

Among comments by users decrying the brand’s tactics as unfair and exclusionary, a variety of answers come to the fore. User bertie9488 admits to spending $5,000 on a smaller bag, a couple of scarves and a bangle before being given the chance to buy the Birkin. Others seem to think it takes an average spend closer to $50,000 to unlock the prize. User shinyjewels quips: “I’ve probably spent 25k and still haven’t gotten offered a quota bag. I did get a limited edition Bolide though, which is included in the price of the 25k I spent thus far. Had to jump an SA (sales associate) cuz we didn’t click, so that’s like, 4k-5k out the window”.

Indeed, the ringmasters who appear to hold up the hoops that customers must jump through are the Hermès sales associates. According to redditor Ennui, “If you have a good SA and you have a good connection they will give you a shot. I can’t remember how much I spent but my favourite SA at a smaller store gave me what I was looking for within a short period of time. But any hiatus or break from shopping with them is like a setback. It drives me nuts.”

All that hoop-jumping certainly helps the bottom line at the end of the day. In the latest financial year, Hermès reported annual sales of €13.4 billion. The current market cap is over €240 billion, dwarfing the likes of Nike despite selling a significantly smaller number of goods, but still much smaller than LVMH at €390 billion.

Not everyone wants to play the game

Jeffrey Berk is the CEO of Privé Porter, a leading Miami-based Birkin reseller. According to him, there are two distinct types of Birkin buyers. The first group consists of individuals willing to engage in the lengthy and often humbling process of securing a Birkin directly from Hermès, an endeavour that we now know involves cultivating a relationship with the brand and demonstrating loyalty through various purchases.

The second group, however, opts for a different route. These buyers turn to resellers like Privé Porter to obtain their coveted Birkins without the wait or the need to build a rapport with a Hermès sales associate. For this convenience, they are willing to pay a substantial premium – often double the original asking price of the new item – for a secondhand bag. This clientele includes high-profile figures such as Paris Hilton and Kris Jenner, who value the immediate availability and exclusivity offered by the reseller market.

Berk claims that 70% of his stock comes from Hermès VIP buyers, who often purchase bags in colours or leathers they don’t actually want, fearing that declining an offer from a sales associate might jeopardise their relationship with Hermès and stop them from getting the bags they’re holding out for. Before making such purchases, they often email Privé Porter to ensure the company is interested in trading or reselling the bags before pulling the trigger on the purchase.

What recourse is there for those who are unwilling to do the Hermès dance, but unable (or unwilling) to pay for a secondhand item? Well, there’s always the courts.

Hermès is currently facing a lawsuit in California, accused of violating antitrust laws by allegedly “tying” the sale of one item to the purchase of another. Two California residents initiated this lawsuit through a proposed federal class-action filed in March of this year. The irony of this legal action lies in its inherent weakness: not only are these allegations challenging to substantiate, but most Hermès customers are reluctant to risk being blacklisted by the brand.

Who among the Birkin hopefuls would jeopardise their relationship with Hermès by participating in a class-action lawsuit?

About the author:

Dominique Olivier is the founder of human.writer, where she uses her love of storytelling and ideation to help brands solve problems.

She is a weekly columnist in Ghost Mail and collaborates with The Finance Ghost on Ghost Mail Weekender, a Sunday publication designed to help you be more interesting.

Dominique can be reached on LinkedIn here.

1 COMMENT

  1. Easier to buy a gift box of Hermès macarons or chocolates for 30€ and keep the gift box for something. But then maybe I do not appreciate the bag thing anymore than the distinction of their macarons.

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