Designers fight retailers - Luxury leather-goods makers say companies sell knockoff handbags

With plush leather or crystal beads, upscale handbags remain one of the best ways for women to wear their taste -- and their bank accounts -- on their shoulders. But how do you know that high-priced handbag with the designer label is the real thing? In the eyes of high-end luxury designers, you can never be too certain. And they've launched an all-out war to keep fake handbags out of the hands of mainstream merchants.

Last week, luxury leather-goods maker Coach Inc. sued Target Corp., accusing Target of selling knockoff copies of its handbags. Target denied the charges and insisted it doesn't sell forgeries. A few months ago, Italian fashion group Fendi S.R.L. filed a lawsuit alleging that Wal-Mart Stores Inc. and Sam's Club sold counterfeit handbags, passing them off as genuine. Wal-Mart denies the charges. The dispute has some retail experts wondering whether the products are really fakes, or whether the luxury designers are simply upset that their products ended up in mainstream discount chains -- which cheapens the image of their products.

"There's an aura of style related to a Coach trademark," said Jim Nikolai, a Minneapolis attorney and a specialist on trademark infringement. "That aura is diluted if it ends up in the hands of discount retailers." In the past, one easy way to tell if a product was fake was to look at who was selling it. Typically, counterfeit luxury items were peddled on street corners and at flea markets, and the real deals were in high-end department stores. But with more luxury items appearing in mass-market retail channels, location is no longer a determining factor. Costco Wholesale Corp. has sold Gucci watches. And Chanel perfume can now be found at midtier department stores. There is no law that prohibits those retailers from selling high-end luxury items, even if the designers don't want them to.

"If Coach sold a product to a third-party supplier that sold it to Target legally, then Target has every right to sell it," said Dan Butler, vice president of retail operations and merchandising for the National Retail Federation. "But Target has to be prepared to say in court where it got it." In a lawsuit filed in New York, Coach said Target sold copies of a Coach bag it "explicitly identifies as a genuine Coach product" at a store in Largo, Fla. Kira Doughan, a spokeswoman in the legal department at Coach, said the company's engineers analyzed the bag, which sold at Target for $200, and determined that it was a counterfeit. The company is investigating reports that Coach handbags have appeared in Target stores in Michigan and California; Coach bags have been spotted at Twin Cities-area stores this past week. A Target store in St. Paul on Monday was selling Coach handbags for $134.99 and Coach wallets for as much as $164.99.

Coach is seeking a court order barring Target from selling the bags. The lawsuit also requests any payment of profits the discount retailer made on sales of the items. "Target has procedures in place to ensure that we do not sell counterfeit products to our guests," Target spokeswoman Carolyn Brookter said in a prepared statement. "We have been assured that the Coach product showcased in our store is authentic; therefore we believe the lawsuit is without merit." She declined to answer further questions, including where Target got the bags. This is not the first time Coach and Target have gotten into a tug-of-war about purses. Also, Coach recently complained that some of Target's private-label handbags too closely resemble Coach designs.

Source: redding.com