By  on March 10, 2005

NEW YORK — There’s another legal war in the fashion world.

On Wednesday, Manhattan-based Coach filed a complaint against French luxury goods conglomerate LVMH Moët Hennessy Louis Vuitton with the Japanese Fair Trade Commission. Coach alleged that, throughout the past year, LVMH has repeatedly practiced foul play and engaged in anticompetitive measures.

Specific details of the complaint could not be made public in compliance with Japanese law, but Coach alleged in a statement that LVMH has been actively trying to coerce Japanese department stores into dropping Coach by threatening to stop developing Louis Vuitton in those stores.

The two leather goods giants have enough financial clout and retail muscle to turn the battle into an all-out war that could spill over to department stores worldwide.

“We cannot accept being subjected to anticompetitive practices aimed at limiting our ability to freely offer Coach in the marketplace,” Lew Frankfort, chairman and chief executive officer of Coach Inc., said in a statement. “It is not the way we do business and is contrary to our principles of fair play.”

Reached in Paris late Wednesday, an LVMH spokesman had no comment on the Coach complaint.

But LVMH is not one to take such cases lying down. The French conglomerate remains locked in a long-running lawsuit against financial giant Morgan Stanley over what it claims were biased reports written by the bank’s luxury goods analyst, Claire Kent.

Louis Vuitton is the top imported accessories brand in Japan, but Coach has said that it recently eclipsed Prada and Gucci and is now number two behind Louis Vuitton. In Japan, Coach has had a 40 percent compound annual growth rate at retail over the last four years and the country represented about 21 percent of Coach’s total sales in fiscal 2004, which were $1.32 billion.

It comes as no surprise that LVMH chairman Bernard Arnault is sitting up and taking notice. In fact, it is widely believed Arnault keeps a close eye on the success of Coach in America and in Japan, and he is said to often bring it up in strategy meetings. When Frankfort and Antonio Belloni, LVMH’s group managing director, were seen huddling at the Milan Fashion Summit, which was cosponsored by Merrill Lynch and the Wall Street Journal last year, the rumor mill went into overdrive with speculation ranging from LVMH looking to acquire Coach, or the two parties possibly cooking up a distribution deal to build Coach’s presence in Europe and Asia. Given the complaint, it seems likely they touched on the subject of Japan and LVMH’s actions there.

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus