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Sunday
Nov022014

Fast-Fashion: Predicted by Coco Chanel, Embraced by Today's Designers, and Supported by Vogue

In the Spring of 1931, Coco Chanel set sale for Hollywood after signing a one million dollar contract with Samuel Goldwyn to design and dress his female stars on and off the screen. Upon her return to France, she stopped in New York where she discovered Samuel Klein, a popular discount store where customers shopped without any assistance through the iron racks and selected dresses that were all copies of one design or another. Klein's business model relied on rapid turnover of inventory by cutting prices. The company didn't spend any money on advertising and still managed to generate 25 million dollars in annual sales, which at the time was a considerable amount of money. Samuel Klein in 1931 was what Zara, Forever 21, and H&M are today in 2014. What Coco Chanel stumbled upon was one of the first fast-fashion businesses. Based on all historical accounts, she was in awe at the industrialization and democratization of fashion and had the foresight to declare that fast-fashion was inevitable and Klein's selling policy was a sign of things to come. 

Coco Chanel (right) with actress Ina Claire (left)

The bold and sharp-tongued designer stated that "fashion does not exist unless it goes down into the streets. The fashion that remains in the salons has no more significance than a costume ball." Her response to copies was more accepting than other couturiers, declaring "what rigidity it shows, what laziness, what unimaginative taste, what lack of faith in creativity, to be frightened of imitations! The more transient fashion is, the more perfect it is. You can't protect what is already dead."  Coco Chanel even went so far as to present a fashion exhibition in 1932 where she invited dressmakers and manufacturers to attend in order to copy her designs. She wanted her look to reach the mass market because she understood that this imitation was what made the designs into fashion. 

Even with this stamp of approval from one of the most influential and innovative fashion designers in history, fast-fashion continues to be a polarizing topic among industry insiders and fashion lawyers. There are those who view fast-fashion as part of the fashion cycle, creating trends by taking the aspirational looks and designs seen on the runways and bringing them to life on the streets by making it affordable. The trend continues until the fashion elite decides to differentiate themselves from the group and create a new set of trends, starting the cycle all over again. Those who hold this viewpoint believe in what has been coined by legal scholars as the "piracy paradox," where copying plays an integral role in the cycle and business of fashion.

Then there are those who view fast-fashion companies as nothing more than knock-off mills that copy major and emerging designers and dilute their brands. Those who adopt this point of view do their best to steer clear of stores like Forever 21 and Nasty Gal. Fashion blogs like Racked, Fashionista, and The Fashion Law have even made it a point to police fast-fashion companies and call them out whenever they produce a copy of a famous design.

While it's important to encourage fast-fashion companies to avoid copying original designs and producing knock-offs, these articles go so far as to put a "ban fast-fashion" spin to their stories, which is a drastic over simplification and unrealistic solution to a business model that generates hundreds of millions of dollars in annual sales and revenue. It is also ignoring the industry's own acceptance of the importance of fast-fashion in spreading trends. Designers like Proenza Schouler, Altuzzara, Marni, Maison Martin Margiela, Isabel Marant and many more have launched design collaborations with stores like Target and H&M as a way to take their look to the masses in an effort to reach out to a larger, untapped customer base and bring brand awareness.

This strategy has also been criticized by bloggers, who claim that such design collaborations target customers who won't be able to afford the designer line anyway and simply encourage consumers to shop more fast-fashion. However, these types of partnerships aren't just mere short-term sales drivers. They ultimately serve as a customer acquisition tool, be it immediate or in the future, by allowing luxury brands to access an entirely different market of young and budding fashionistas. Maybe she can't afford the Marni, Isabel Marant, or Altuzzara line in the short-run, but she now has accessed the brand and will likely grow to shop it in the future when she can afford it.

Even Vogue has acknowledged the significance of fast-fashion, most recently in its issue last March with an article on Sophia Amoruso, CEO of Nasty Gal. However, some industry insiders were critical of the coverage due to the company's history of copying designers. While these views held some valid points, they were a bit short-sighted and ultimately showed a lack of understanding of Vogue's very own mission statement, which is the following:

“A commitment to visual genius, investment in storytelling that puts women at the center of the culture, and a selective, optimistic editorial eye.” 

As part of the Silicon Beach start-up scene, Sophia Amoruso and Nasty Gal are at the epicenter of the growing fashion-tech space. The company and CEO's success reflect the impact of E-commerce and social media on the industry, reveal the consumer habits of the Millennial generation, and embody the entrepreneurial and #Girlboss spirit and female empowerment of the time. While Nasty Gal has a long way to go in improving its business model to avoid selling blatant copies, Vogue was completely in the right to cover the story. Bloggers and industry insiders often forget that the magazine isn't just about promoting high-end designers and luxury brands. It is about providing its readers a snapshot of what is in fashion in both the literal and figurative sense, and that includes the business of fashion. Furthermore, looking back on Vogue's history, the editorial choice is not at all unusual given how Anna Wintour launched her tenure at the magazine. Her first cover in 1988 heralded a high-low street style, featuring model Michaela Bercu wearing a $10,000 Christian Lacroix jacket with a pair of $50 Guess jeans.

The general criticism of Nasty Gal outside of the Vogue article also reflects a lack of understanding of the growing pains a fast-fashion company has to go through as it transitions from a start-up venture to early stage company to eventually major corporation. The path to keeping up with the growth is often filled with mis-steps as the companies iron out their organizational issues and try to become more efficient. It is often true when companies claim that they are unaware of the infringing nature of any one item. Their large merchandising teams make quick purchasing decisions at high volume from foreign third party vendors in order to meet the customer demands. In many cases where a knock-off slips in to the selection, it very well is a mistake prompted by the fact that the original fashion work is not as readily identifiable as one would assume. This isn't an endorsement of companies that intentionally sell knock-offs. There are fast-fashion companies who have been in business for many years who implement this business practice, and we here at TFG don't condone that. However, the policing of this activity must be done within the context of the stage the fast-fashion company is in. 

When it comes to fast-fashion, rather than ban it or be obsessed with it, we here at TFG encourage a more middle of the way approach. As a consumer, it should be shopped in a conscious way for filler pieces and add-ons to one's wardrobe. There's no need to raid the stores for every trend one sees in magazines and fashion blogs. Define your style, set your budget, support quality designers where you can, and make fast-fashion a vehicle for rounding out your look in an affordable way.  

As a business, the fast-fashion companies that have managed to push the envelope in adopting the runway trends without actually copying the original fashion work are the ones that should be emulated by other fast-fashion companies. While walking this tight-rope is not always successful, companies like Zara have managed to take the runway trends, have their internal design team tweak as needed in order to avoid infringement issues, and make them affordable for the masses to enjoy. It does what fast-fashion companies should do with their merchandise, which is to take the look, give a nod to the designer's aesthetic, and transform it into its own inspired version. Zara's model exemplifies how literal copies aren't necessary to produce a multi-million dollar business. And while other fast-fashion companies have a long way to go in perfecting their business model in order to avoid becoming knock-off mills, one thing is clear...fast-fashion is here to stay. Merely policing the infringing activity over blogs isn't a sustainable solution. A more viable and business savvy approach would be to provide specific tools that fast-fashion companies can realistically utilize to help them become more compliant. For example, in my current job at a fast-fashion company, I work with the merchandising team to go over monthly selections and help them identify which items are infringing copies and which are not. I then work with the design team and vendors to alter the infringing items, removing any registered design marks or protected features, and transforming them from knock-offs to inspired-by versions. Over time, the merchandising and design teams have learned to apply these practices more efficiently and intuitively without any policing. I also created guidelines to help the merchandising team identify infringing goods before placing a large order from foreign vendors.

The examples above are only the tip of the iceberg when it comes to the types of turn-key programs that can be created to develop better business practices. Fashion lawyers, reporters, and industry insiders should shift the focus away from criticizing fast-fashion to adopting a more solution-oriented approach to its deficiencies. The business model has clearly stood the test of time and fashion lawyers and professionals must extend their knowledge base beyond policing the companies and start putting on their business caps to come up with specific tools and training that can be integrated into a company's operations. No single blog or online article will have as significant of an impact as developing detailed and viable guidelines that become inherent to the company's practices and provide a long-term solution towards compliance. Not even this post.

Tuesday
Aug262014

Gucci, Balenciaga, YSL, Bottega Veneta, et. al. File Suit Against Alibaba Group for selling Counterfeit Goods

The battle against counterfeits in China rages on in the latest lawsuit filed by Gibson Dunn last month on behalf of their clients Gucci, Balenciaga, YSL, Bottega Veneta and several other luxury goods manufacturers against Alibaba Group, a privately owned Hangzhou-based group of E-commerce businesses. The Plaintiffs are alleging that the Defendants facilitated the sale of millions of dollars in counterfeit goods.

The heavy hitters in luxury goods are going after a major internet giant. Alibaba comprises of business-to-business online web portals, online retail and payment services, a shopping search engine, and data-centric cloud computing services. It handles more transactions than any other E-commerce company in the world, totaling $248 billion last year (more than that of eBay and Amazon combined). Reports of Alibaba's impending IPO are speculating that it could be the largest IPO ever by a technology company.

The Plaintiffs are claiming that the Defendants assisted the counterfeiters' business operations by providing the marketplace, search engine, advertising and logistical services for their illegal enterprises. The complaint provides details of the search and sale process, demonstrating how the Defendants cause the sales to take place by directing customers to the illegal counterfeits through their proprietary algorithms and keywords sold to the counterfeiters that include Plaintiffs' trademarks and the word "replica."

Given the ongoing battle of counterfeiting in China, Alibaba's deep pockets, and the detailed 147 page complaint, we here at TFG don't foresee this case going away anytime soon without a major fight or a major settlement. We'll be sure to keep our fashion law readers updated. Until then, more details of the case can be found in the copy of the complaint below:

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Thursday
Aug212014

TFG Exclusive: Fashion Quote of the Day

                                                                             

"Fashion goes in only one direction – forward – and I am a firm believer in thinking that way too."

-Anna Wintour

  

Sunday
Aug172014

The Digitalization and Globalization of Fashion: What My Recent Trip to Europe Revealed about Fashion Tech's Impact

With the ongoing developments in fashion tech, there is no question that the digitalization of fashion has disrupted the industry and truly globalized it. Blogs, E-commerce sites, aggregate sites, auction sites, apps, mobile shopping, YouTube streaming, podcasts, Instagram, Pinterest and every digital platform in between have forever changed the people's access to fashion trends as well as the industry's access to the people. And no where did this shift become more evident to me than on my recent trip to Europe.

 

It had been almost ten years since I had last visited the continent. To provide our readers with a "tech snapshot" of that time, text messaging was the only exciting feature on any cell phone, the word "selfie" did not exist, there was nothing wireless about any computer or laptop, especially your internet connection, long distance calls back to the States inevitably involved a calling card purchased at a local newspaper stand, and the only thing I regularly bought online was music (illegally of course).

But I digress. My memories of Europe circled mostly around a couple study abroad experiences and countless summer vacations with my family. During our trips, we always made a point to indulge in some shopping and take advantage of the fact that Europeans were always one step ahead of the fashion game. People watching inevitably entailed taking note of what the women were wearing on the streets of Paris, Italy, London, etc., followed by stalking the trends in the stores and bringing them back home (tax free forms and all).

Last month, I took off for a three week trip with my husband that took us through Paris, Dubrovnik, Florence, various towns in Italy, and London. As we pounded the pavement from one city to the next, what immediately struck me was how the fashionable set of Europe were dressed no differently than their American counterpart. Birckenstocks, high-waisted jeans, pants, gladiator sandals, rompers, cross-body bags, crop tops, oversized blazers...name the trend, and that trend could be found on the streets of every city we visited.  

True, Europeans still have a more sophisticated way of putting a look together and maintain a greater appreciation of fashion. Some would even argue the inventory at the stores are still slightly different than back home. But I was surprised to see that those differences have diminished over the years and if anything, are almost unnoticeable. The fashionable set on these two leading continents, and around the world, are taking their cue from the same leading fashion blogs, Instagram accounts, and Pinterest boards. What I saw on my trip was essentially fashion tech's impact on real life- a global look that had been channeled through these digital platforms.

 

With one swift click of the mouse, the sartorially oriented can shop the same online boutiques that curate those rare styles and brands that ten plus years ago could only be accessed when visiting certain cities.  With one glance of any social media app on a smartphone, millions of followers from around the world can see the latest shoe style or "it" bag and can choose to either purchase it within seconds upon their discovery, or find an inspired-by version.  During the trip, I personally found myself cross-checking the stores' sale prices on my iphone with one quick search on my ShopStyle app. I even caught one sales lady lying to me when she insisted the brand didn't make the jacket I wanted in a smaller size. After one search on my Farfetch app, I found the jacket in a smaller size online, proving my instincts right and her sneaky sales pitch wrong. Needless to say, instead of making the purchase at that London boutique, I bought it on my iphone as I was exiting the dressing room (and at a better price!).

 

Image Courtesy of Wall Street Journal 

The digitalization of fashion has essentially disrupted time and space between the consumer and the industry, creating a closer, instantaneous, and more informed global relationship than ever before. And while this topic is deserving of more detailed research and metrics to assess the degree of fashion tech's impact, sometimes it's enough to take to the streets, get out into the world, and see the ripple effect with one's own eyes. After all, in the case of fashion, the street is always one of the first places to look to anyways.

Thursday
Feb072013

2013 Fashion Law Recap

NYFW has officially begun and before TFG goes full force in providing our readers with the latest runway coverage, I wanted to go back to my fashion lawyer roots and recap some of the recent cases and developments in fashion law that have already set the tone for the new year.

First off, the legal dispute between Tory Burch and her ex-husband Chris Burch, colorfully dubbed by Judge Strine as a "drunken WASP fest" has been settled. As noted in our previous post, the dispute began over the sale of Chris's stake in Tory Burch LLC, which Chris claimed his ex-wife made difficult for him to do. Additionally, Chris claimed that Tory Burch was also interfering in business partnerships related to his new retail concept C. Wonder, which many claimed that its seeming likeness to the Tory Burch chain upset his former wife.  This was confirmed when Tory Burch countersued her former husband for trade dress infringement over the similarities between the two brands, as well as unfair competition and breach of fiduciary duty.

The similarities included the resemblance of their gilded logos, in-store light fixtures and respective candy-colored decor. Tory Burch’s lawyer Marc Wolinsky told WWD at the time, “[t]his guy ripped off Tory Burch. His product looks like our product, his stores look like our stores.” Chris Burch's lawyer Andrew Rossman responded that both of the brands’ products reflected “timeless styles that other people invented.” The terms of the settlement remain confidential. However, it is known that Chris Burch still retains an undisclosed stake in Tory Burch LLC.

 

Second, the Innovative Design Protection Act (IDPA) of 2012 has died in Congress because the 112th Congress has ended and the bill was not passed into law. Fashion continues to remain in exile of the U.S. Copyright regime, perpetuating the knock-off industry. 

Here's hoping that Senator Schumer will reintroduce the IDPA in the next session of Congress.  Designers deserve to be afforded some form of copyright protection. One thing is for sure- the debate over copyright protection for fashion continues.

 

Third, the Federal Trade Commission (FTC) fined four retailers — Macy’s Inc., Sears Roebuck and Co., Amazon Inc. and Leon Max Inc. — a combined $1.26 million for allegedly falsely labeling rayon products as made of bamboo. I have encountered some major labeling issues as a fashion lawyer and can confirm that the FTC does NOT mess around when it comes to labeling products, especially those meant to be eco-friendly. Their specific guidelines are meant to protect the consumer and prevent false advertising and misleading labeling.

Charles Harwood, acting director of the FTC’s Bureau of Consumer Protection, told WWD “If a textile is made of rayon, sellers need to say that, even if bamboo was used somewhere along the line in the production process.” Sears, including its Kmart subsidiaries, agreed to pay $475,000 to settle the charges, while Amazon agreed to pay $455,000, Macy’s $250,000 and Leon Max $80,000. More posts on FTC apparel guidelines to come.

 

Last and most recent, John Galliano won the first round of what is sure to be a protracted and intense labor dispute after a Paris court ruled that it was qualified to hear Galliano’s claims against his dismissal in March 2011 after 15 years as creative director at Dior, following a series of public outbursts during which he uttered racist and anti-Semitic insults. John Galliano blamed the remarks on work-related stress. 

Despite the disgrace in Galliano's downfall, complicated commercial contracts remain at the heart-and-center of this dispute. Dior's attorney believes that the Labor Relations Court is not qualified to hear the case, since Galliano was linked to Christian Dior Couture and John Galliano by a multitude of contracts, including several consultancy agreements with Galliano’s company, Cheyenne Freedom. He added that these could not be treated separately from the employment contracts established between Galliano and the two companies, and that he was therefore more an independent contractor than a subordinate. Nevertheless, the Paris court did not seem to agree and it remains to be seen what kind of severance package Dior's former employee will get.

2013 has already proven to be a fruitfull one in the fashion law world. TFG will be sure to be at the forefront of these as well as future cases and developments.