While anticounterfeiting is a tireless fight for many brands, Coach Inc. scored a $5.5 million win last month by settling with the owner of a well-known Fort Lauderdale, Fla., flea market that was selling fake Coach goods.
In the federal court settlement, Preston Henn, owner of the Swap Shop, agreed to the multimillion-dollar payment. “Thrilled” as Coach’s deputy general counsel Nancy Axilrod was with the settlement, it was not about the money per se, but the deterrent effect the case will have on others.
Beyond the dollar amount, what makes Coach’s settlement significant is the fact it stems from a criminal case that held the property owner accountable. The news also comes at a time when designers and major brands are battling knockoff artists who are using 3-D printing and prototypes to try to fool designer-hungry shoppers. Compounding the problem is an upswing in “superfakes” — defective designer goods taken from a factory or items that are made with some authentic materials. Another telltale sign of the superfake is the price tag, which can be $500 or $600, compared with a flea market special, which can sell for $30 to $40.
Coach’s Axilrod hopes its Swap Shop news will help to set a precedent. Since launching Operation Turnlatch, a national anticounterfeiting program, Coach has filed more than 700 lawsuits, and Axilrod added, “I’m happy to say we haven’t lost a single one, but this case is the one we are most proud of. They definitely put up a long and difficult battle for us.…Before this, they were either ignoring us or sending back dumb excuses and combative explanations.”
Coach has records of counterfeit goods being sold at the Swap Shop dating back to 2004, though violations may have gone back further, Axilrod said. Founded in 1963 by Betty and Preston Henn, the Swap Shop is now an 80-acre stretch with more than 2,000 vendors as well as carnival rides and a 14-screen drive-in movie theater. More than 12 million people visited the Swap Shop in 1990 (the most recent year listed), according to the company’s Web site. In accordance with the settlement, Coach will continue to monitor closely what is sold at the Swap Shop. Should any counterfeit Coach goods be found there, the Swap Shop would be put on notice and would have an obligation to stop that within 30 days, Axilrod said.
Susan Scafidi, founder and academic director of the Fashion Law Institute at Fordham Law School, said Coach’s win is interesting on three fronts — “as a revival of brick-and-mortar enforcement rather than an exclusive focus on the Internet; as a return to using secondary liability against a marketplace, which declined in popularity after Tiffany lost its case against eBay, and as a big number for a small flea market.”
Henn, whose lawyer did not respond to requests for comment, has reportedly vowed to do a better job of policing his flea market. How the publicity may impact his sales remains to be seen. In 2012, a federal jury awarded Louis Vuitton $3.6 million after a San Antonio flea market was found to have sold fake Louis Vuitton merchandise. Jurors decided that Eisenhauer Market owner Bruce Gore and manager Patricia Walker contributed to trademark infringement for allowing vendors to sell knockoff items depicting the Louis Vuitton brand. “They are not allowed in here. We have big signs up everywhere. We look at all the merchandise that comes in here. We have done everything they asked us to,” said Walker, adding that business had suffered as a result of the negative publicity.
Attorney Harry Schafer, who worked on that case for Louis Vuitton, said, “Brand owners have their hands full, with counterfeit stuff being sold all over the Internet, people selling out of the trunks of their cars and on card tables on the street. There are a lot of people looking to trade on counterfeit goods.”
In fiscal year 2012, $864 million worth of fashion-related counterfeit goods bound for the U.S. were seized by federal officials, according to the International AntiCounterfeiting Coalition. And that figure does not reflect the countless other counterfeit goods that are being sold in brick-and-mortar stores, flea markets and online. Just last week, federal and local officials seized thousands of counterfeit items — bearing such labels as Louis Vuitton, Michael Kors and Ralph Lauren — with an estimated value of $1.8 million from a Nashville store.
If 3-D specialists and superfake sellers weren’t enough, there is the plethora of counterfeiters selling online. To try to crack down on online counterfeit sales in China, the International AntiCounterfeiting Coalition signed a deal with Taobao, China’s largest consumer-to-consumer Web site in the world’s most populated country, in August. IACC president Bob Barchiesi described the Coach settlement as “fantastic.…It sends a message to landlords and property owners that they can and will be held accountable. It is also a reminder that you should know who you’re dealing with [through your business.]”
New York City’s Canal Street and Santee Alley in Los Angeles continue to be trouble spots — and trendsetters — for counterfeiting, he said. To help shoppers wise up, the IACC is working with the Crime Museum in Washington to unveil an exhibition later this year. The IACC-backed DesignsFauxReal Web site is another way consumers are learning about the risks associated with shopping on counterfeit sites, Barchiesi said.
(In 2010, eBay won dismissal of a Tiffany & Co. lawsuit accusing the auctioneer of deceiving customers by allowing the sale of counterfeit Tiffany jewelry on its site.)
After the Counterfeit Triangle raid in New York City’s Chinatown, which seized $1 million in fake fashion items and held the building owner responsible with a hefty fine, some counterfeiters were driven to the streets — the trunks of their cars and street corners — to sell their knockoffs. Scafidi said, “It’s not new laws but increased enforcement, including enforcement against landlords, that has pushed counterfeit sales out of back rooms and onto the streets again.”
“My personal philosophy to beauty is paying attention to oneself. I love to be outdoors, lots of fresh air, trying to take care of yourself as best you can. I always notice that comes through,” says Felicity Jones, the global face of @shiseido-owned @cledepeaubeauteus, which launches today. Head to WWD.com to read more about the actress’ love for beauty and how she prepared for her new role in “The Basis of Sex,” playing the young Ruth Bader Ginsburg. #wwdbeauty (📷: @dandoperalski)
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews