Counterfeiting is a major problem for luxury brands. (Read our 800 gazillion Adventures in Copyright posts to get the gist.) So it's no surprise the Financial Times dedicated an entire segment of Thursday's "Business of Luxury: Focus on America" summit to the issue. FT fashion editor Vanessa Friedman moderated the panel, which featured intellectual property attorney Harley Lewin (he repped Christian Louboutin on the YSL case), PPR IP director Katrina Burchell, and Proenza Schouler CEO and co-founder Shirley Cook.
The focus of the panel was counterfeiting on a mass scale (Cook said that while Proenza Schouler has only found knockoffs of its popular PS1 handbag on Canal Street a few times, there are counterfeits all over Asia). The takeaway?
For one, Cook says that counterfeits for sale on the web aren't necessarily affordable: A knock-off of a $1,500 bag will often be priced at around $800. "People think there's a possibility that it's real, that they're getting a deal." While Cook conceded to Friedman that 2% of her operating income is dedicated to stopping counterfeits, Lewin suggested that for some brands, that number's more like 5%. "If your brand is successful, you will always have a counterfeit problem," he said.
But for Cook, it's not just about the flat-out counterfeits. "You lose not only to counterfeiters but you lose to fast fashion, you lose to people who are not far off the mark from where you are," she said, subtly referencing what Proenza Schouler went through with Target. The big box retailer, which had collaborated with the luxury brand in the past, sold a bag so close in style to the PS1 that Cathy Horyn wrote a whole story about it. "'Get the Look for Less' is my least favorite page in any magazine," she says.
Lewin urged that the biggest threat to brands hasn't even become a real threat just yet. "When the cost of 3D printing is reduced, it's going to create an entirely new generation of businesses," he said. "It's not far away."