This economy is ripe for fake and copycat luxury goods
That is not the reaction from companies seeing cheaper versions of what they sell – but it should be. When it comes to fakes and dupes, of everything from Lululemon Athletica leggings to Dior handbags, imitations are most threatening when the real thing isn't delivering.
The best defence, particularly in the luxury sector, is to ensure that the provenance of products is impeccable and that they are giving people a sense of value for money.
Value is a tricky concept to pin down. I think of it roughly as the feeling of getting more than the amount one paid. Right now, that's in short supply. The average price of a basket of iconic luxury products in France rose by 54 per cent between 2019 and the end of 2024, according to analysts at HSBC.
Meanwhile, US tariffs threaten to elevate the cost of clothing and cosmetics. Such an environment has opened the way for dupes and fakes. This has been thrown into sharp relief by Lululemon accusing Costco Wholesale of copying its designs in a lawsuit filed in June.
The first thing to know is that dupes and fakes are different. Fakes are counterfeits, usually with an identifiable label or logo, making them easier to challenge in court. The big problem with fakes is tracking down those responsible. They're particularly pernicious, too, as they fund organised crime and exploit vulnerable workers.
A NEWSLETTER FOR YOU
Friday, 2 pm Lifestyle
Our picks of the latest dining, travel and leisure options to treat yourself.
Sign Up
Sign Up
The escalating cost of genuine luxury goods has also allowed illicit manufacturers to raise their prices, enabling them to invest in better production capabilities. This has led to the rise of so-called 'super-fakes', which are almost indistinguishable from what they're copying.
When it comes to dupes, the picture is more complicated. They don't pretend to be the real thing; instead, they offer a similar but cheaper version. This is what the Lululemon and Costco case is about.
' US tariffs threaten to elevate the cost of clothing and cosmetics. Such an environment has opened the way for dupes and fakes. '
Fashion has always looked for more affordable takes on the hottest items. But more explicit dupes have been legitimised by TikTok influencers focused on saving money. Brands cracking down now face a delicate balance between protecting their intellectual property and alienating consumers.
Calling out a copycat can also give them oxygen. Mentions of Costco specifically alongside Lululemon have risen by 130 per cent this year, according to Launchmetrics, which tracks social media data.
Legally, dupes are complex. They don't have a recognisable logo or symbol that can be challenged. Professor Susan Scafidi, founder and director of the Fashion Law Institute at Fordham Law School, told me that under US law, while there is protection for copyright, patents and trademarks, there is no separate category for design rights, as in Europe.
Consequently, Lululemon is pushing under the US legal framework to find a way to protect the actual three-dimensional shape of its garments, for example highlighting specific design features such as the placement of seam lines in its jackets and men's ABC Pants.
The case could have broader implications for dupe culture. Costco declined to comment and has not filed a response.
Lululemon has been at the forefront of brand protection, for example suing Peloton Interactive in 2021 over a line of workout clothes that the Canadian company said copied its proprietary designs. The two parties settled out of court a year later.
But Lululemon is also under pressure from nimbler rivals such as Alo Yoga and Vuori, as well as changing fashion tastes, which have seen women swop leggings for looser-fitting styles and casual wear inspired more by pyjamas than Pilates. Analysts have pointed to an increase in discounting at the retailer. Little wonder it's keen to crack down on imitators.
Lululemon's position could not be more different from that of Hermes International, whose iconic Birkin bag has sparked a raft of dupes.
While Hermes' chief executive officer Axel Dumas told analysts in February that copies of the Birkin were 'quite detestable', he also acknowledged that it was 'quite touching' to see social media posts saying 'we respect Hermes, we can't afford it. But in the meantime, I feel like dreaming about it'.
' These kinds of scandals encourage consumers to question what they're actually paying for. And they make it easier for Chinese factories to claim that they manufacture the goods, even though most luxury items are made in Europe. '
Indeed, dupes don't seem to have dented demand for the coveted accessory. A bag that bore an uncanny resemblance to a Birkin was briefly for sale on Walmart's website in December for US$78. Dubbed the 'Wirkin', it quickly sold out.
More recently, Philadelphia designer Jen Risk has created the 'Boatkin', the love child of the Birkin and LL Bean's iconic canvas Boat and Tote.
Yet, in the first half of this year, Hermes' leather goods and saddlery sales, of which so-called 'quota bags' account for about 60 per cent, according to analysts at Bernstein, outperformed most rivals. The sale of Jane Birkin's original bag for US$10 million only adds to the allure. Hermes has also in the past taken legal action to protect its intellectual property.
There's a lesson to be learnt from the Birkin's multifaceted appeal. Not only is it notoriously hard to get hold of, but it is handmade in Hermes' workshops in France.
Such supply chain integrity is a crucial weapon in fighting fakes. It also underlines why issues such as cashmere maker Loro Piana being placed under court supervision in Italy for alleged poor working practices are so damaging.
Sister house Dior faced a similar action last year. These kinds of scandals encourage consumers to question what they're actually paying for. And they make it easier for Chinese factories to claim that they manufacture the goods, even though most luxury items are made in Europe.
LVMH Moet Hennessy Louis Vuitton chief financial officer Cecile Cabanis told investors last month that the company, which owns Loro Piana and Dior, had already stepped up checks on manufacturers and would intensify scrutiny of suppliers.
But LVMH and the broader industry must be more vigilant. Because if consumers can't count on their luxury bag being made the right way, why not save thousands of dollars and buy a super-fake? BLOOMBERG
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Times
4 days ago
- Business Times
This economy is ripe for fake and copycat luxury goods
IT'S not you, it's me. That is not the reaction from companies seeing cheaper versions of what they sell – but it should be. When it comes to fakes and dupes, of everything from Lululemon Athletica leggings to Dior handbags, imitations are most threatening when the real thing isn't delivering. The best defence, particularly in the luxury sector, is to ensure that the provenance of products is impeccable and that they are giving people a sense of value for money. Value is a tricky concept to pin down. I think of it roughly as the feeling of getting more than the amount one paid. Right now, that's in short supply. The average price of a basket of iconic luxury products in France rose by 54 per cent between 2019 and the end of 2024, according to analysts at HSBC. Meanwhile, US tariffs threaten to elevate the cost of clothing and cosmetics. Such an environment has opened the way for dupes and fakes. This has been thrown into sharp relief by Lululemon accusing Costco Wholesale of copying its designs in a lawsuit filed in June. The first thing to know is that dupes and fakes are different. Fakes are counterfeits, usually with an identifiable label or logo, making them easier to challenge in court. The big problem with fakes is tracking down those responsible. They're particularly pernicious, too, as they fund organised crime and exploit vulnerable workers. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up The escalating cost of genuine luxury goods has also allowed illicit manufacturers to raise their prices, enabling them to invest in better production capabilities. This has led to the rise of so-called 'super-fakes', which are almost indistinguishable from what they're copying. When it comes to dupes, the picture is more complicated. They don't pretend to be the real thing; instead, they offer a similar but cheaper version. This is what the Lululemon and Costco case is about. ' US tariffs threaten to elevate the cost of clothing and cosmetics. Such an environment has opened the way for dupes and fakes. ' Fashion has always looked for more affordable takes on the hottest items. But more explicit dupes have been legitimised by TikTok influencers focused on saving money. Brands cracking down now face a delicate balance between protecting their intellectual property and alienating consumers. Calling out a copycat can also give them oxygen. Mentions of Costco specifically alongside Lululemon have risen by 130 per cent this year, according to Launchmetrics, which tracks social media data. Legally, dupes are complex. They don't have a recognisable logo or symbol that can be challenged. Professor Susan Scafidi, founder and director of the Fashion Law Institute at Fordham Law School, told me that under US law, while there is protection for copyright, patents and trademarks, there is no separate category for design rights, as in Europe. Consequently, Lululemon is pushing under the US legal framework to find a way to protect the actual three-dimensional shape of its garments, for example highlighting specific design features such as the placement of seam lines in its jackets and men's ABC Pants. The case could have broader implications for dupe culture. Costco declined to comment and has not filed a response. Lululemon has been at the forefront of brand protection, for example suing Peloton Interactive in 2021 over a line of workout clothes that the Canadian company said copied its proprietary designs. The two parties settled out of court a year later. But Lululemon is also under pressure from nimbler rivals such as Alo Yoga and Vuori, as well as changing fashion tastes, which have seen women swop leggings for looser-fitting styles and casual wear inspired more by pyjamas than Pilates. Analysts have pointed to an increase in discounting at the retailer. Little wonder it's keen to crack down on imitators. Lululemon's position could not be more different from that of Hermes International, whose iconic Birkin bag has sparked a raft of dupes. While Hermes' chief executive officer Axel Dumas told analysts in February that copies of the Birkin were 'quite detestable', he also acknowledged that it was 'quite touching' to see social media posts saying 'we respect Hermes, we can't afford it. But in the meantime, I feel like dreaming about it'. ' These kinds of scandals encourage consumers to question what they're actually paying for. And they make it easier for Chinese factories to claim that they manufacture the goods, even though most luxury items are made in Europe. ' Indeed, dupes don't seem to have dented demand for the coveted accessory. A bag that bore an uncanny resemblance to a Birkin was briefly for sale on Walmart's website in December for US$78. Dubbed the 'Wirkin', it quickly sold out. More recently, Philadelphia designer Jen Risk has created the 'Boatkin', the love child of the Birkin and LL Bean's iconic canvas Boat and Tote. Yet, in the first half of this year, Hermes' leather goods and saddlery sales, of which so-called 'quota bags' account for about 60 per cent, according to analysts at Bernstein, outperformed most rivals. The sale of Jane Birkin's original bag for US$10 million only adds to the allure. Hermes has also in the past taken legal action to protect its intellectual property. There's a lesson to be learnt from the Birkin's multifaceted appeal. Not only is it notoriously hard to get hold of, but it is handmade in Hermes' workshops in France. Such supply chain integrity is a crucial weapon in fighting fakes. It also underlines why issues such as cashmere maker Loro Piana being placed under court supervision in Italy for alleged poor working practices are so damaging. Sister house Dior faced a similar action last year. These kinds of scandals encourage consumers to question what they're actually paying for. And they make it easier for Chinese factories to claim that they manufacture the goods, even though most luxury items are made in Europe. LVMH Moet Hennessy Louis Vuitton chief financial officer Cecile Cabanis told investors last month that the company, which owns Loro Piana and Dior, had already stepped up checks on manufacturers and would intensify scrutiny of suppliers. But LVMH and the broader industry must be more vigilant. Because if consumers can't count on their luxury bag being made the right way, why not save thousands of dollars and buy a super-fake? BLOOMBERG
Business Times
05-08-2025
- Business Times
Alibaba to shut premium Hema X outlets after rivalry heats up
[SHANGHAI] Alibaba Group Holding plans to gradually wind down the last of its Costco-like members-only stores, underscoring its retreat from a hyper-competitive Chinese retail arena. Its supermarket chain Hema has begun shutting down premium 'Hema X' outlets, which charge members an annual subscription for access, a person familiar with the matter said. China's e-commerce leader is taking action to shore up overall profitability, the person said, asking to remain anonymous discussing a non-public decision. The impending closures were first reported by local media including Jiemian. The move marks a strategic retreat from a model that failed to gain traction against Walmart's Sam's Club and Costco Wholesale, which have proven popular with Chinese consumers looking for exclusive products and bulk bargains. It also reflects a broader effort to refocus on AI development and vie with and PDD Holdings to attract consumers during a Chinese economic slowdown. Alibaba had begun shuttering Hema X outlets over the past year or so, reversing an expansion that began around 2020. The last Hema X store in Shanghai will close on Aug 31, after three closed in Beijing and eastern Jiangsu province in July, local media reported. A Hema representative did not respond to a request for comment. The company still intends to expand its main Hema chain, which helped pioneer a supermarket model combining fresh produce, a restaurant concept and quick delivery in 2015. It plans to add some 100 Hema stores this year, the person said. More broadly, Alibaba had begun to retreat from physical retail even before going all-in on AI, unwinding years and billions of US dollars in investment. This year, it agreed to sell its shares in Sun Art Retail Group to private equity firm DCP Capital. Earlier, it struck a deal to unload its Intime department store business. BLOOMBERG
Business Times
01-08-2025
- Business Times
Lululemon vs Costco: the fashion copycat fight
THEY say imitation is the sincerest form of flattery, but what happens when it veers into outright theft? Costco, the members-only discount store, has long been famous for private label products that compete head to head with national brands in everything from vodka and cranberry juice to mattresses and laundry detergent. Its Kirkland signature products are so popular that it has become something of a national guessing game in the US to determine which manufacturers actually produce them. But rivals contend that the Washington state-based group's recent forays into lookalike clothing have taken emulation a step too far. Last week Lululemon, the luxury athletic clothing brand, sued Costco in federal court in California, alleging that it had illegally copied at least six patented clothing designs, including its popular Scuba hoodie and Define jacket. Lululemon's popular Scuba hoodie PHOTO: LULULEMON That lawsuit comes hard on the heels of one filed in May by Deckers which claimed that Costco had illegally copied its Ugg slippers. Deckers is a repeat litigator: it also sued Costco over lookalike 'mini-boots' in 2023. Fashion copycatting has been a fact of life for decades, from street vendors who illegally purvey faux Chanel bags to haute couture designers who 'borrow' ideas from rivals, sometimes in homage, but often in envy. It is made possible in part by relatively vague US intellectual property rules for fashion designs that grant more protection to technological advances, such as technical fabrics, than innovative design. But the Lululemon versus Costco fight stands out because it involves two large, publicly listed companies and it takes direct aim at a growing cultural phenomenon: the quest for 'dupes'. A NEWSLETTER FOR YOU Friday, 2 pm Lifestyle Our picks of the latest dining, travel and leisure options to treat yourself. Sign Up Sign Up Once seen as embarrassing parsimony, buying knock-offs has become a fashion statement of its own. Egged on by hashtags, TikTok videos and media articles, customers are leaning into the fun of finding cheaper but still good alternatives, turning the search for dupes into a public treasure hunt. Nearly half of US consumers surveyed by analytics firm First Insight said they had tried a product specifically because it was a 'dupe', and 70 per cent of shoppers who make more than $150,000 said they were more likely to try a dupe than other private label goods. Mass market retailers are only too happy to play along. Big box stores and fast fashion chains have a long history of offering clothing and shoes that emulate the vibe of more exclusive stores. But the dupes craze has taken the copying – and the profits – to a new level. 'Everybody does it. The retailers will tell you they are trying to fill a need. Lululemon is not going to sell to Costco, so Costco says, 'People like these leggings, why don't I make some,'' says Joe Feldman, retail analyst at Telsey Advisory Group. Lululemon initially tried to be playful about defending its unique looks from imitators. In 2023, it hosted a 'dupe swap' in Los Angeles, where customers were encouraged to trade in their knock-offs for the real thing. But Costco's latest efforts were more than Lululemon was willing to bear. The warehouse store's US$20 sweatshirt mimics the ornamental stitching and pouch pockets of Lululemon's Scuba offering, which sells for six times the price. And Costco's dupe of the Design jacket mimics an unusual line of curved stitching across the back. Lululemon contends in its lawsuit that those specific details violate the 'trade dress' patents that it has registered over the past two years, as well as a trademark on the colour description 'tidewater teal' that it applied for one day before filing its claim that Costco had 'unlawfully traded upon Plaintiffs' reputation, goodwill and sweat equity'. However Costco, which did not reply to a request for comment, has an arsenal of potential defences upon which to draw. US rules protect makers from infringement claims if the similarities are based on function rather than distinctive design. The warehouse group could also try to turn the dupe craze to its advantage by arguing that consumers are unlikely to be misled into believing that they are buying a Lululemon original. Costco's products are clearly marked with either the Kirkland brand or the manufacturer's name. Despite the publicity, most patent attorneys expect the dispute to settle, as Deckers' first Uggs lawsuit did last year. Each side has too much to lose from a trial. Costco could be on the hook for gigantic monetary damages, while 'if Lululemon were to lose, it would be open season' for other duplicates, says Josh Gerben, a DC patent attorney. If there is a clear line between flattery and forgery, few in fashion want to know exactly where it is. FINANCIAL TIMES
