By and  on March 14, 2005

PARIS — The battle is on between Coach and LVMH Moët Hennessy Louis Vuitton, but it could be a long war.

It could take a year or more for Coach to resolve its dispute with LVMH over what Coach describes as harassing and anticompetitive behavior in Japanese department stores, according to the Japanese Fair Trade Commission.

A spokesman for the commission in Tokyo said Friday that investigations regarding the Anti-Monopoly Act in Japan often take “more than one year.” At the end of the process, the commission makes a recommendation to eliminate the illegal action, if any is found, and, “if it is not accepted [by the offending company], it takes another one or two years to finalize the decision,” the spokesman said.

Reached last week, executives at major Japanese department stores declined to comment on the case. However, speaking on condition of anonymity, one official noted that stores tend to acquiesce to demands from big brands since they generate such important sales.

To be sure, many big vendors are said to have thrown their weight around in the past to grow brands in Japan, where Vuitton commands a dominant position.

And there are already signs the battle between Coach and LVMH is going to be a drag-out fight. Bernard Arnault, LVMH’s chairman, is renowned for his combativeness, as evident in the barbed war of words he conducted with then-Gucci Group chairman Domenico De Sole when LVMH bid for Gucci in the Nineties and in the lawsuit LVMH filed against Morgan Stanley luxury goods analyst Claire Kent over allegedly biased research reports.

But Lew Frankfort, Coach’s chairman and chief executive, has been equally outspoken so far. Last week, in revealing the JFTC filing, he said: “We cannot accept being subjected to anticompetitive practices aimed at limiting our ability to freely offer Coach in the marketplace. It is not the way we do business and is contrary to our principles of fair play.”

In rebuttal, an LVMH spokesman said the French group would vigorously defend itself against any accusations and that, during its 40-year history in Japan, its business practices have been regularly praised. It immediately hit back at Coach’s business practices, saying it “can only question the motivation of the firm that filed this complaint, which is known to manufacture most of its products in regions with cheap labor.”

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