B.A.F.F.L.E.D. Fashion Law

Big Merger Style

After a little break in August, which we hope you enjoyed, too, we're back with a discussion on the collision of 2 of our favorite things--fashion and M&A (mergers and acquisitions). 

Just recently, American luxury group, Tapestry, found itself standing before the court in a standoff against the Federal Trade Commission (FTC). Tapestry, the group housing brands like Coach, Kate Spade, and Stuart Weitzman, is in the midst of an $8.5B acquisition of Capri Holdings, the house containing the likes of Michael Kors, Jimmy Choo, and Versace. As often the case, the crux of this FTC claim is the concern of reduced competition, with so many brands rolling up to the same owner. The concern is the limitation it will put on the "accessible luxury market". It is often considered the market for those just getting into luxury goods, like teens and young professionals, or those choosing not to pay exuberant prices, no matter the heritage of the brand. 

Tapestry and Capri see things differently.

The yet to be united Tapestry and Capri believe this merger will not only be good for the consumer market, but for America on the luxury stage altogether. Tapestry claims the deal will spur innovation, optimize economies of scale on the business side and improve options, selection, and experience on the customers side. 

The FTC counters with the claim the Tapestry foothold would drive up prices, limit consumer options, and make the "accessible luxury market" diminish greatly. They see it creating a greater divide between the haves and have-nots, hurting the economy versus doing any good. Understanding the power of these conglomerates in the marketplace, there's also a good chance this deal could push consumers to younger, upstart brands. This would be a positive for those companies, but the scope to which it'd be able to impact them is difficult to determine. 

Proceedings could take a while, and they're just a little over a week into hearings thus far. If approved, the combo positions Tapestry in a similar vein to LVMH, and elevates the American luxury house in a space long dominated by European houses stunting brand heritage and legacy.

Being such a diverse nation, the hope is there will be great benefits in this deal across all of its many parts, for all of our many diverse business and consumer types.

We'll be watching this one...

B.A.F.F.L.E.D. Fashion Law

The Root of Fashion Week...is Fashion Law--

Clearly, questioning the validity of fashion law is fading.  There was a time when "fashion law" got blank stares and/or a series of questions.  That response is escaping, as it should be.  Today, with fashion being such a major focal point in our economy and everyday lives, people understand what it is and why it's needed.

The root of fashion law goes back to the start of fashion in general--likely the times when Sir Charles Fredrick Worth began putting tags with his name on it in the dresses he designed.  As we continue in excitement about New York Fashion Week, we can point to fashion law as its source.  We mentioned Dressing Constitutionally as a new must-read for legal fashionistas.  Now,  Intellectual Property at the Edge: The Contested Contours of IP, a book edited by professor Jane C. Ginsburg of Columbia Law School, is due out this year.  

The new book includes a chapter by Columbia Professor C. Scott Hemphill.  He discusses the start of the Fashion Originators' Guild of America--a union of designers working together to keep their designs protected. They agreed not to work with entities who infringed on the designs of members, thereby supporting the counterfeit and knockoff market. You can even see some of their authorized labels here.  In 1941, the U.S. Supreme Court denied their attempts at protecting themselves as violations of antitrust law. 

Despite the ruling of the Court, the Guild's seasonal shows of their original work strolled on.  This was not only their way of showing their stuff, but letting everyone know it belonged to them.  It was also the mother of the modern-day New York Fashion Week.

“The Fashion Originators’ Guild of America: Self-Help at the Edge of IP and Antitrust,”, Professor Hemphill's chapter in the book takes a deeper look into the court case, antitrust issues, and where protection of fashion designs currently lies.  See, fashion law is not only real, but more established than you'd think. 

Can't wait to read this one!