Reuters report
ed today that a Paris court fined eBay $61 million over forgery. eBay is reportedly to pay the LVMH group 38.6 million euros.
LVMH is the world’s largest luxury goods conglomerate in the world and their holdings include Louis Vuitton.
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I am surprised that designers and luxury retailers haven’t been more aggressive in legally defending their brands from knock offs and imposters. Let’s face it; much of the value in designer bags, shoes and clothes is the status of the label. Sure, these designers are producing quality merchandise, but much of the high end value of their products is in the perception of them being high priced status symbols. Of course a 600 dollar Jimmy Chew shoe is better constructed and of higher quality materials than a mass produced 60 dollar Franco Sarto pair but is it 10 times better as the price would suggest? The reason Jimmy Chew can sell their shoe for 600 dollars is that they have spent time and money creating the perception that it is a luxury item worth 10 times the amount a standard department store pair is worth. Much of the value difference is in perception, not materials and workmanship. Why wouldn’t they want to defend that image and the investment they have made in establishing it?
The selling of knock offs not only cheapens a luxury brand’s image by allowing consumers outside their elite target market to be seen in the streets wearing the counterfeit product, it also highlights how little difference there actually is between the real deal and a knock off. Much of the reason people pay for designer goods is that they want to feel and be perceived as someone who can afford them. They want them to be that much better than their lesser priced counterparts. It feels good to have a Prada bag on your arm. It says to the world that you are important and successful and makes you feel the same. If you can accomplish that task for 25 dollars instead of 2,500 why wouldn’t you?
With celebrity worship and image consciousness at an all time high in our society and so many counterfeit items in circulation, I sometimes find myself wondering if the jeans on the woman across from me are the real deal or just a fake. That notion will undo millions of dollars worth of marketing and image development spent by a designer and they can not let that happen. I think these lawsuits will have to become more commonplace as luxury retailers have no choice but to defend their brand or loose their niche with today’s consumers.