Wednesday, December 8, 2010

LVMH vs. Copycats, May the Fight Begin!

When your friends come to Hong Kong for vacation, what do they like to do? 1. Party, 2. Eat, 3. Shop? No! It’s 1. SHOP, and everything else is a bonus. Famed luxury brand, Louis Vuitton Moet Hennessy (LVMH) recently filed a U.S. trade complaint looking to block imported goods from China, more particularly the handbags and accessories that copy the ‘look’ of LVMH.
"Wow" was my first reaction after reading the article by Bloomberg, and then I started thinking about the repercussions to this type of trade ban. One of the repercussions I thought of were the entities that we know such as Mongkok’s Ladies Market and other similar markets in Hong Kong. These markets would have a sudden influx and overflow of look-a-like and knock off handbags, which would then be worth a lot more. Still not as expensive, but would be more affordable for people who want the designer look handbags. Just because there is a ban, doesn’t deplete the demand for the product.

Kanch and I were discussing this article further and couldn’t figure out why LVMH would want to put this trade ban forward, because essentially they are the creators of their own black-markets. Let me explain a bit more, if you have to think about what happens to products once the factory makes them; if there is a bend, lose thread, or any sort of defect, they don't just throw them away -- we assume these are the same goods, which is sold to Japanese, Korean distributors who re-sell the goods to Hong Kong – China and other markets where look-a-like / knock off bags are high in demand.

LVMH would not be a standalone in this type of procedure, almost all luxury brands would have to practice the similar. If this was true, it would be interesting to see the reaction of other luxury brands (in regards to this trade ban), because the ripple effect of many well-known brands and companies is vast -- as almost all luxury brand owners operate as major conglomerates in the industry. For now, all we can do is sit back and watch the show to see who backs up LVMH and what the U.S. government intends to do.

For those of you who are not in the Fashion Industry, or are constantly learning about the working ways of the luxury industry here is the 411 on who owns what:

Louis Vuitton, Loewe, Marc Jacobs, Fendi, Emilio Pucci, TAG Heuer, De Beers, Christian Dior perfumes, Céline, Benefit, Acqua di Parma, Guerlain, Make Up For Ever, **catching a breath** PLUS they own Sephora, Le Bon Marché, recently they gained stocks in Hermes and Edun – all of this is not including all the wine, champagne and liquor companies that LVMH also owns.

PPR owns the Gucci Group whom in turn owns Gucci, Alexander McQueen, Stella McCartney, Yves Saint Laurent, Bottega Veneta, Balenciaga, Sergio Rossi, and Boucheron. PPR also owns Puma, who consequently also owns Tretorn. – On another note, they also own FNAC and Conforama, Media and Grocery Store Franchises in France…**starting to get hungry, wish I ate a more hearty lunch**

Richemont Group
Cartier, Van Cleef & Arpels, Lancel, Montblanc, Chloé, Shanghai Tang, Azzedine Alaia, and from their most recent and most notorious dot com business: Net A Porter, which sells many brands owned by other conglomerates, but gives Richemont Group control on what to sell and how.

Other Conglomerates include, Prada Group, Diesel, TODS, The Affe Group, Puig Group, Phillips-Van Heusen, and others. CLICK HERE to read more from a fellow blogger who wrote a great, easy to understand entry, stating valuable information regarding the who’s-who of luxury branding.

Now... Who wants to go Shopping with me?

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