Five Legal Battles in Fashion and How They Affect You

When fashion goes legal, its never pretty. Large omni-channel brands begin to have poor decisions come to life, CEOs and CFOs begin to see pressure from their boards and inevitably, you the consumer, loses out, at least in the short run. However, without legal pressure, most brands will put the profit before the product. Here’s a look at some of the largest legal battles in fashion and how they are affecting you.

American Apparel

American’s Apparel legal battles aren’t so much legal as internal. The much-publicized inner-workings of the struggling teen retailer has brought intense scrutiny to just about every facet of the brand. Recent CEO Dov Cherney was given an ultimatum of quit or be fired, amidst claims of sexual harassment, cyber harassment, embezzlement, and an internal probe to determine other wrongdoings. Logistical issues plagued the retailer, which was restructuring to become a more modern brand since late 2012, but many point to American Apparel’s poor choice in marketing and advertising campaigns that are decidedly and overly sexual in nature as a huge cause. For example their Made in Bangladesh Ads, E-Commerce Images and their advertising evolution.

Image Source: Myth Andra Fenner

What it Means to You: The future is not clear for American Apparel, however the teen retailer has come into quite a bit of scrutiny and unwanted attention due to increasingly poor advertising choices and brand image. The price-conscious retailer probably won’t change its core merchandise or pricing, but don’t expect to see dramatically bold or trendy lines anytime soon.

Rachel Roy & The Jones Group

California-born Rachel Roy is one of America’s favorite designers and as one of America’s sweethearts, any news concerning Rachel Roy is big news. During April of this year, Roy sued then parent company Jones Apparel Group, which owned a 50% stake in her company, for ceasing the production and retail of her namesake line. Roy and The Jones Group have never seen eye to eye, but apparently the original contract was inked in 2008, stating that "Roy would at all times retain full creative control over the designs that were to be sold under her name, and would have exclusive approval rights over the use of the Trademarks."

Topson Downs recent acquisition of Rachel Roy’s label, which still allows the designer full creative rights, definitely is a win-win for everyone.

Image Source: FabSugar

What it Means to You: Rachel Roy is back in control of her brand as things should be. Expect her to stay very on trend while taking some distinct risks to show her new partners at Topson Downs that she is still an innovative designer, but also understands market trends and how to make a profit. Consumers will win with new designs and the same affordable, stylish label they have come to love.

LMVH & Ebay

Louis Vuitton Monet Hennessey and Ebay have been in constant litigation since Spring 2010, as the fashion giant has claimed that ebay, despite all its consumer and brand protections, has done very little to prevent sales of fraudulent goods through its online marketplace. Considering the increase in percentage of online vs offline sales, especially for the luxury consumer, LMVH initially demanded over $61M in damages from the ecommerce powerhouse. Subsequent rulings have stated that the French firm had no say over eBay’s US sales, but could rule on UK and France sales. A settlement has recently been reached for roughly $8M.

Image Source: Rue De Chic

What it Means to You: Your favorite luxury goods are just going to get more expensive, especially in the short run as eBay cracks down on counterfeit operations as a show of good nature. Inevitably, more fake stores will open, but expect to see less options for Donna Karen, Louis Vuitton, Givenchy and Marc Jacobs ( along with about 30 other labels of fashion, perfumes and jewelry).

JCPenny & Macys

JCPennys, since 2012, has been embroiled in a legal battle with Macys over a breach in an exclusive deal to sell cookware, bath and bedding products from the Martha Stewart Living label. In most recent news, a New York State court has ruled in favor of Macys, stating that JCPennys did in fact infringe on exclusive contract rights by retailing Martha Stewart Living goods; a fact JCPenny has continued to appeal. JCPenny claims to have unintentionally infringed on exclusive agreements, however many believe the appeal is not likely to stand.

Image Source: Business of Fashion

What it Means to You: Once Macys wins this battle; there will be one less major retailer selling Martha Stewart Living. Macys will compensate partially by increasing prices, making it the perfect time to search for alternatives to this popular home goods brand.

Diesel & Cybersquatters

In a page straight from the book of LMVH and eBay, Diesel has filed a lawsuit against nine individuals holding a total network of about 83 different websites with domains such as buydieseljeans.net. As online sales continue to increase, lawsuits such as these will increase in commonality. According to an article from Dazed, “Claims against cybersquatters is on the rise, and Diesel isn't the only one going after these brand weasels – Chanel and Adidas have all sued cybersquatters in the past, while Tory Burch was awarded $164 million in a landmark 2011 case against a group of counterfeiters”.

Image Source: My Fashion Database

What it Means to You: When any brand cracks down on counterfeiters, the consumer always pays as it means less options, less knockoffs and more expensive branded products. Taken from another angle, the consumer always wins as it means higher quality, better brand trust and stronger design principles. Either way you look at it, expect Diesel to win this suit and watch as prices rises for more competitive Diesel products.

Marcus Campbell

Content Editor / Engagement Marketer at Ideal Media. Making Olanola a better place to do the things you always wanted to do. Fashion Lover. Business Junkie. Code Hugger.



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