Have you ever waltzed into Hermès in hopes of snagging a coveted Birkin or Kelly bag only to be turned down? Well apparently actors recruited by a scheming illegal bag gang weren’t as unlucky as many hopeful buyers, because French authorities recently busted a ring of resellers in Paris.
According to The Times UK a Birkin bag-buying gang allegedly recruited fake would-be buyers from acting schools and on the internet to purchase real bags as part of an elaborate and incredibly lucrative scheme. The fake customers were instructed to dress in designer clothes in order to help them pass as wealthy consumers looking to snag a coveted silhouette at Hermès stores across Europe.
It’s been reported that the ring has made around a million euros a month while accumulating half of the company’s readily available supply over the past four years. The fake Birkin-buyers were allegedly paid for their service, which helped the illegal ring turn a profit by reselling the bags for well over their retail price.
French media also reported that victims were enticed to purchase the real goods by being invited to a fake showroom not far from Hermès’ central Paris location (though supposedly bags were exported to Asia as well).
After an eight-month investigation, authorities are said to have busted 10 suspects varying in age from 24 to 57. This scheme is likely going to add to Hermès’ growing concerns over the purchasing of its bags with the sole purpose of reselling. And though the reselling of bags is hard to monitor as the practice itself is not exactly illegal, posing as a legitimate Hermès showroom is of course punishable by law and that seems to be where this massive reselling ring went wrong.
I’ve purchased Birkin’s and Kelly’s and it’s not easy due to their arbitrary rules. I’m not surprised that a “gang” tried to capitalize on the market. It’s actually a brilliant strategy (legalities aside).
I’m part of an Hermes FB group and the number of “brand new, boutique fresh, stickers still on it, just bought last week” bags on there is super high. There is no question that a LOT of people buy bags just to resell. That include Birkins and Kellys.
There have also got to be a lot of people “scared” to refuse any offer, even if it’s a bag they don’t really want, for fear they won’t get another one if they say no. That’s messed up.
Hermès has a tricky way of choosing who may or may not buy their bags. Hard working people need to wait for years to score one, but resellers seem to buy them anytime they want. It’s a shame !
Hermes is a disrespectful brand to its customers in my opinion – the customer service is horrible and their products are not to sing gage about but they have established themselves as one of the best – the bloggers are the ones they are targeting now after the Kardashians
Something is not adding up unless buying B’s and K’s in Europe is entirely different process than here. Here you can’t just walk into an H boutique with “designer clothes” on and be offered a B or K unless you just get super lucky. You need to develop a relationship with an SA and have buying history. So did they use the same actors over and over so they had buying history? Or do they just sell to the most desirable type of customer based on their clothing (that seems wrong on so many levels)? And half the bags available? I think there is way more to this story to come out in the future.
I think who they sell bags to is at the SA’s discretion. The US being what it is places more value on your customer history but I suspect in Europe it’s about whether you represent the Hermes brand well.
I do believe this story because it never made any sense to me that bags were SO hard to buy in store yet the resellers had so many authentic ones to sell.
I agree. This doesn’t add up
Unfortunately, this is a huge signal to Hermes that their prices are too low (shockingly). Also points out another painful reality that Hermes will only sell to those who look, or are known to be, “wealthy”.
But remember when they didn’t want to sell to Oprah? ?
I remember that Oprah went into a Tom Ford to look at a Jennifer Crocodile bag in Europe, but the owner didn’t think she could afford it and tried to distract her with other bags. I don’t recall that Hermes didn’t sell to her.
That’s not what happened. The story is on npr.org.
“First, here’s what happened. According to reports (and Oprah), she went into a fancy store sans entourage and asked to see a handbag that was secured behind a screen. The saleswoman said, nope, it’s too expensive. Look at these bags instead.
The O asked to see the bag again (it was a Tom Ford croc skin, I’d want to touch that, too!), but the saleswoman again steered the media mogul — who is reportedly worth nearly $3 billion — to other bags in what she imagined would be Oprah’s price range.
O asked to see the bag a third time but the saleswoman, who was apparently trying to protect Oprah from being emotionally crushed by the price tag, said she didn’t want to hurt O’s feelings and refused again. Oprah and her $3 billion left the store without buying anything”. npr.org
Secondly, this is what happened in Hermes: “The Hermès incident was one of the more florid tabloid stories of the summer: Ms. Winfrey, one of the wealthiest and most famous women in the nation, was turned away from the Hermès flagship store on the Rue du Faubourg Saint-Honoré at closing time”. She said she wasn’t upset that she couldn’t shop, but that “the salesperson was rude to her”. She asked and eventually received a public apology from Hermes”. New York Times
There are contrasting accounts of what happened at Hermès. There’s a different version of events on The Washington Post–one that contradicts the Times. The WAPO reporting was actually what I was referring to; I misspoke when referencing NPR. Regardless, it’s obvious both events were racially motivated. Be blessed.
I think price increase is not the solution. Many would go to resellers is because they want a “specific” bag – its color style and material which buyer may not get it right on their first purchase in the boutique.
I find that a lot of people misunderstood what I said – I’m not saying the resale market isn’t valid or would fail to exist if Hermes raised prices. All I said was just that Hermes knows people will pay a higher price for their bags. Not interested in arguing this point with people who don’t get it.
Prices are “too low” for Birkin’s and Kelly’s? Really, have you purchased these bags? I have and they aren’t cheap, I promise you. They are so difficult to buy thus the huge upsell on the secondary market! I do agree that Hermes favors people that look wealthy because that’s the image they want tp present to the world.
If people are willing to pay that price on the resale market, they would be willing to pay that price from Hermes directly. That’s what I meant. I know they are not inexpensive by any means, but if people can resell an item at a higher value that means there is a gap between the price it’s sold at, and the price that people are willing to pay. It’s economics.
Except it’s not that simple… People are willing pay that premium in order to get what they want when they want it – instead of having to establish a purchase history and spend lots of money in the boutique, cultivating a relationship with an SA, and then *hoping* to get the Birkin or Kelly they want. So Hermes would have to make many more Bs and Ks in order to allow more people to buy them without playing that whole game, but then that would negatively affect the air of exclusivity around those bags. That’s more important than a small increase in revenue for Hermes, I’d think.
The cost associated with establishing a purchase history is probably much greater than the markups by resellers. Hermes would still continue to be exclusive with who they sell to and will continue to raise prices due to the reseller market – this only urges them to continue to do so. Prices are not staying stagnant for sure.
This^
I’m not understanding what’s illegal here. Some people pretended they were wealthy, bought luxury goods and resold for a profit. Nothing was stolen. Nothing fake was passed off for real. Who says you can’t buy something for the sole purpose of reselling it. It’s your personal property to dispose of as you wish.
I’d like more details on the “fake showroom”.
This is pure comedy. The fake showroom is genius. Lmao.
I agree, I’m not understanding the illegality here.
Oh how devastating NOT
I don’t see what the big deal is. I don’t really care about birkin bags, I think they’re ugly. There’s so many fakes around there’s no point in buying a real one. But if someone wants to buy and resell that’s up to them. If I was offered one I’d buy it and sell it. I think the only crime is the fake shop.
Was the showroom listed fraudulently as an “authorized reseller of Hermès products? Otherwise….legally buying and selling/reselling authentic bags is not unlawful or illegal – no matter where they’re sold – front porch, showroom, etc.
They are being beat at their own game and 100% caused this high resellers market. If they didn’t make the Birkin and Kelly so impossible to get the resale market wouldn’t be as high as it is and they would actually have those people spending money through them vs the resale market. They are already out of budget for the vast amount of people in the world so if you could walk into the boutique and purchase I really don’t think it would hurt the brand. I wouldn’t recommend that they sell them directly out of the store but if they were MTO the leadtimes and the price could deter people from buying them if they want to still keep it exclusive. They also could have a cap on the amount produced per year. They may already do this of course. I agree with everyone else, I don’t see anything illegal here. I see another example of a GameStop/hedge fund scenario playing out.
One could also argue that the resellers themselves are what makes buying a bag so difficult in the first place. It’s a self perpetuating cycle. By allowing customers to just walk in off the street and buy a bag actually makes it easier for the resellers to consume all the supply.
Supposedly resellers are already gobbling up half of all easily available bags. You’ll notice on social media since this bust happened people are posting unboxings videos left and right and talking about how easily they were offered a bag so the situation itself might be resolving.
MTO is a possibility but may not be the most efficient way to produce bags.
What’s illegal in France is also not what is illegal in the US.
Right so that’s called a free market place or capital markets exchange….totally legal…why is this “reporter” sharing story?
Illegal? Eh. That’s a free market transaction. It’s really on Hermés. I can’t walk into Hermès and pick out a Kelly but someone overly fluffed in designer wear can? I can afford a Kelly or a Birken yet cannot buy one unless I, “have a history “. The other side of this is that the prices of resale bags have been artificially inflated because of this scheme. I wouldn’t pose that as a possibility if it was just a few bags. It sounds like it was a lot more than just a few, a million dollars? All in all this is a first world problem. Boo boo to those of us that love luxury. Now off I go to Saks. Me and my Kelly. PS I will always love Hermès.
It’s not illegal, but it lessens the chance for me to buy a Birkin bag for my personal use.
For me it’s not fair to us Hermes customers who can’t afford to buy as often like the resellers. I understand that the SA favour this customers to get a lot of sales, but how about us? Hermes direct customers? Sometimes i feel frustrated that i have to pay resellers more just to get the bag i wanted.
Then they should switch their SA’s to straight salary and get rid of their incentive to favor any particular customer over another.
I think perhaps this is why Hermès added the language to the bottom of receipts about not reselling or something to that effect.
Even if they say that, they still legally can’t control the resale market. Once a good has been purchased from them, it’s not theirs to control. It’s basically a request that they have no right to make.
Is reselling a real product illegal in Europe? If someone buys real Hermès items with legal tender (meaning the money is not from stolen credit cards or supporting a drug cartel), then so what? The only illegal thing I can see is if the “showroom” was advertising as being owned or authorized by Hermès. It seems to me from an economical perspective, that Hermès should raise their prices if they know people are paying much more on the resale market for their bags. There is a ceiling to what people will pay for these bags and clearly it is not met with what people are paying for resold bags. As a customer, if an Hermès boutique doesn’t see me “worthy” of carrying one of their bags, or aren’t offering me what I am looking for, it may be worth it to me to go to a “showroom” to review several options at one place and leave the pretentious attitude at the door in exchange for paying an over retail price.
Im not sure increasing prices will resolve the issue. Furthermore, does the bag worth that price of increment?
Illegal? Eh. That’s a free market transaction. It’s really on Hermés. I can’t walk into Hermès and pick out a Kelly but someone overly fluffed in designer wear can? I can afford a Kelly or a Birkin yet cannot buy one unless I, “have a history “. The other side of this is that the prices of resale bags have been artificially inflated because of this scheme. I wouldn’t pose that as a possibility if it was just a few bags. It sounds like it was a lot more than just a few, a million dollars? Is artificially inflating the market a crime? Now that may be something? Do we have luxury laws? Should we? I’m being felicitous of course. All in all this is a first world problem. Boo boo to those of us that love luxury. Now off I go to Saks. Me and my Kelly. PS I will always love Hermès.
This is hilarious to me. ?
You don’t necessarily need a history. I didn’t have one, but I was offered a bag anyway. I’m in Europe.
What’s the illegal part? They’re just reselling real goods.