if you haven't heard the news, LVMH won the suit

Mass-market retailer, Wal-Mart settled with luxury goods house, LVMH yesterday, agreeing to pay a confidential sum to end a dispute over the sale of counterfeit Fendi handbags in its Sam's Club stores. Below is the backstory.

LVMH sues Wal-Mart over sales of counterfeit Fendi products; Coach sues Target

[source: ETHISPHERE]

November 28, 2006

Fendi, a purse and handbag brand of French luxury goods company LVMH Moët Hennessy Louis Vuitton, has sued Wal-Mart in federal court, alleging that counterfeit versions of its Fendi brand bags and wallets are being sold in Sam’s Club stores. According to the complaint, Wal-Mart has never purchased Fendi products from Fendi or any entity or person affiliated or approved by Fendi.

According to the suit, counterfeit Fendi handbags sell for as much as 68 percent less than the actual Fendi products, according to the lawsuit. (For example, a fake Fendi handbag priced at $295 vs. $925 for the original). Wal-Mart countered that the company’s “policy is not to sell counterfeit goods” and claimed that it will be able to demonstrate that the Fendi items in the store are not counterfeit.

On a parallel front, a customer from western Kentucky filed a federal lawsuit claiming the Prada handbag he bought at a Paducah, KY, store was a fake. Prada officials have confirmed that Wal-Mart is not a customer. Several weeks after this suit against Wal-Mart, Coach Inc. became similarly emboldened and decided to sue Target Corporation for what it claimed was a million dollars or more of sales of counterfeit handbags improperly labeled as authentic Coach products. Coach decided to quietly drop its suit however later when it appeared that perhaps Target did indeed get the bags in an authorized secondary market “close-out.”

Commentary: Prada and Fendi–Now available in New York, Milan, Miami, L.A. and Paducah! This isn’t the first time that Wal-Mart has been sued over counterfeit goods. In recent years it has paid $6.4 million to Tommy Hilfiger and $1 million to Nike over similar charges. We doubt that Wal-Mart found a legitimate leak in the Fendi supply chain. Rather, more likely is the term that Judge John E. Sprizzo used to describe Wal-Mart’s actions during the 1999 Hilfiger trial: “That’s chutzpah if I ever saw it.” Allegedly Wal-Mart is currently headhunting for a Chief Ethics Officer to join their organization. However, according to a number of people who have interviewed for the position, the offered salary is embarrassingly low. They have little hope of attracting a strong qualified candidate at that pay scale. Collectively, this behavior calls into question its high profile pronouncements about trying to become a more ethical company.

[article and commentary: ETHISPHERE]