You know how Costco occasionally sells Chanel and Louis Vuitton bags? Well, they might have to stop, if luxury brands like Omega have anything do with it.
The warehouse club is taking the Swiss watchmaker to the Supreme Court, appealing a lower court ruling that said Omega had the right to control who bought its products in the grey--or secondary--market.
The grey market, which is something luxury brands don't like to talk about, is where lots of leftover product goes. There's a secondary seller who buys it from the luxury brands at a major discount--that seller then passes it offer to discount retailers. It doesn't happen often, because luxury brands tend to burn or melt their extra/imperfect stock, but it does happen.
In related news, the European Commission has released a set of rules that say luxury goods makers can block Internet-only retailers from shilling their goods. eBay, which boasts the biggest second-hand luxury market in the world, could be severely affected by this.
Luxury goods makers might think they'll benefit from tighter control, but will they? Do discount retailers really tarnish a brand?