Louis Vuitton Coach Lawsuit

We hadn’t heard that Coach had poached a Vice President from Louis Vuitton, but the news came to us yesterday by way of a The Fashion Law post detailing Louis Vuitton North America’s new lawsuit against the American leather goods stalwart and one of its newest executives, Joon Ma. Apparently there’s some bad blood between the handbag giants.

According to The Fashion Law, Ma left her spot as Vice President of Canada and Bermuda in early April to take on a new role at Coach on April 28. LVNA believes that violates the six-month non-competition clause in her employment contract, which is often enough for a jilted employer to file a lawsuit in and of itself, but the rest of the details make things a little bit more interesting. LVNA claims that before leaving, Ma transferred confidential trade secrets about Louis Vuitton’s business and strategy to her personal accounts, and then tried to erase the evidence that those transfers happened.

From where I sit, there are two important points here: First, Louis Vuitton considers Coach a competitor. While the company may only admit to it in legal terms, it seems as though it wasn’t that long ago that LV probably wouldn’t have deigned to admit it at all, even for the benefit of suing someone. Second, Coach is very serious about making an upmarket swing under new creative director Stuart Vevers (who is, notably, also a former LVMH employee who left the company to go to Coach.)

LVMA is seeking damages, as well as a six-month timeout for Ma before she can start her new role at Coach. Although it remains to be seen how the lawsuit will transpire, we hope that Coach keeps in mind the plight of Mulberry, a brand that also went about poaching premier designer executives and raising prices, only to be frantically trying to undo the whole debacle two years later. Raising prices is a tricky task, especially for a brand with an ardent following that’s long been used to a friendlier price structure.

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  • Guest

    Another question that comes to mind with a coach price increase is whether or not the resale market will maintain those prices. A LV customer can usually resale their purchases for a significant portion of what they paid for them. Will coach bags be able to fetch the same?

    • http://www.purseblog.com/ Amanda Mull

      One thing in Louis Vuitton’s favor on resale is the brand’s extremely tight distribution, which is the same thing that keeps resale prices for Hermes and Chanel high. There’s only one place to get each of those brands, and that’s from the brands themselves, which don’t do discounting or have seasonal sales on bags, in general. The only way to get a Louis Vuitton bag for less than retail is to buy it second-hand, which makes more people willing to do that, which drives up second-hand prices.

      Brands that don’t do as well on resale are generally brands for which buying a brand new, marked down item is an option for consumers. Unless Coach tightens up its distribution in favor of its own company boutiques (which is something that brands like Gucci and Prada are currently doing), there’s no market force that would raise resale prices.

      • Guest

        I don’t know a lot about Coach and I wonder if they generate more revenue from their boutiques or their outlets? I do know many people will be upset if Coach closes their outlets and FOS.

      • http://www.purseblog.com/ Amanda Mull

        I don’t think they release the specific numbers, but those outlets are such a double-edged sword. Their customers love them and they’re always mobbed with shoppers buying multiple products, but because they’re so numerous and well-stocked, they definitely set the expectation that Coach bags are worth less than their original asking price. I’m interested to see how the brand’s revamped strategy affects them.

      • Guest

        It will be interesting to see how everything plays out.

      • coachgirl82

        As an ex-employee of COACH both their retail & factory stores generate revenue. The $$ of revenue they have to bring in is different for each but the company is also bringing in new products which is aimed to bring excitement into the brand for long-time customers and hopefully new customers. I don’t see COACH closing their outlets. I can definitely see them opening more outlets in the future.

    • Sydnie

      Another questions is whether or not the market is willing to pay a higher price for Coach. More people may become outlet shoppers that currently shop in the full-priced store. The outlet is online as well which makes it more convenient for people to switch over.

  • Edia

    every monogramed bag is an enemy of LV

  • Sydnie

    Coach bags do not hold a value at all regardless of if they were purchased at the outlet. They also are not made of the same quality. LV has a reputation for quality and exclusivity. Coach will never have that reputation (at least not in the near future). Seems like LV has nothing to worry about in terms of competing with coach.

    • sara

      I agree with most of your comment aside from an exception. Plenty of people, myself included, are limited on the amount of money they have available to spend on accessories. I don’t think LV has the same reputation for exclusivity as some other brands — although they appear to be attempting to address this issue by raising their prices. I would have to think long and hard about purchasing LV if I can purchase more than one Coach bag for the price of one LV bag. So far I haven’t been able to justify the price difference between LV and Coach in LV’s favor.

      • Sydnie

        I have a few Coach bags. I use all my bags but I do take amazing care of them. The Coach ones just don’t hold up. Even if they were in excellent condition, I couldn’t get what I paid for them while all my LV bags are currently worth more than I paid for them. I don’t necessarily think LV is as exclusive as a Birkin or a Chanel but I definitely see tons more Coach around. Personally, I like classic bags and am not into the trendy ones. I would rather pay the additional money for a bag that will last and I am less likely to see someone else with. It’s a matter of preference. Either way, trade secrets and a noncompete is grounds for a lawsuit.

    • coachgirl82

      Sorry as an ex-employee of COACH I have to disagree with you. COACH bags regardless of their bags coming from regular retail stores to their factory outlets the quality is the same. They’re made put together in the same place. The retail stores supplies the factory stores with their inventory. Hence why “older” bags are sent to the outlets when new products are being introduced to the retail stores. There are certain bags that are only for sale in the outlets but the quality is the same. I’m not being biased because I worked for COACH. I do support the brand because even as a long time customer before working for COACH I never had an issue when it comes to quality of their items.

      LV and COACH they’re both different brands and I both of these brands are part of my handbag collection. Even with LV I can say that there’s wear & tear and sometimes their products do “fall apart” (with their stitching I’ve had issues in the past) but they’re quick to repair that problem same thing with COACH.

      Both brands carry good quality items. The style is obviously different. With COACH they try to make items affordable for customers of all ages. That’s why their collection varies from being fun to trendy to sophisticated so every customer who walks into a COACH store may find at least one item that they can see themselves carrying. With LV it’s very sophiscated and obviously their pricing is higher so their clientele is not wide as compared to COACH. Not everyone can afford a hand-bag that starts in the $1,000 range and wallets starting at around $500 and up.

      I support both brands. I do think you get your money’s worth with both. When you have quality issues sometimes it’s a “manufacture defect” and sometimes it’s just normal wear and tear. I’m saying this out of experience with both brands. Items are put together by hand for each brand. That’s why not every single item of a specific bag is the same.

      Both COACH & LV bags can last a long time as long as you’re careful with your bags and not throwing them around as if they’re not worth anything.

      • Sydnie

        I never said the quality was different at the outlet. Per my original comment, I said regardless of where the bag comes from. None of my bags are ever thrown around and are all well taken care of. It has been my experience that my Coach bags just don’t last as long. They look older sooner. It has been my personal experience but I never said that the bags were poorly made. I would also like to hope that anything I am paying at least double the price would outlast something I paid less for.

        I have nothing against Coach. I just prefer a more classic style which is why I would personally prefer to buy LV. I also don’t like seeing everyone I pass with the same bag.

        LV having a higher price tag (and a rising one at that) keeps the exclusivity as well as the resale value. You are right, not everyone can afford it. That makes it “exclusive.” Not everyone can afford a Birkin either. Many LV owners cannot go buy a Birkin. The reputation of LV also helps with the resale value. Which is why I feel LV has nothing to worry about with this situation. Although, I hope LV wins this one only to set precedent about property and non-competes. Unfortunately, if I didn’t tell my employer about my noncompete, I would be fired for not disclosing the information. Plus sued by my old company. Hopefully the same holds true in this case.

      • B

        Coach has major quality control issues. I had issues with in a week with 3 different limited edition bags. Anything from glue spots to peeking patent leather. That is with me buying my bags. I also had a pair of scrappy wedges break the first time I wore them. Those issues caused me to quit buying coach and sell the ones I had. You only get a small fraction of the price. However, I haven’t had those issues with the LV bags I have bought.

  • mollypete

    I disagree that this signifies LV’s belief that Coach poses a threat. LV has long been one of the most proactive in the industry in policing knock-offs and cheap copies. I think it’s just good business to make every effort to protect it’s designs. I don’t blame them for being sick of seeing every other high school girl carrying a “speedy” on the subway. That’s a very old design that’s entitled to more respect than it gets. And the bags are, after all, LV’s intellectual property.

  • shueaddict

    I think the real issue here is the breach of data confidentiality protocols. Many top executives get around the 6 month non-compete clause. If you’re on top of your game sitting on the side lines for 6 months is simply not an option.

    • Sydnie

      I agree. But, corporations have to protect themselves and their property. It will be very interesting to see how this all plays out.

  • LZP

    I suspect that LVNA is less concerned about Coach as direct brand competition, and more concerned about another company potentially courting its executives, and receiving proprietary information along with them. LVMH is certainly right to try to protect its trade secrets, and could also be using this lawsuit against Ma to show that they will enforce non-competes if others decide to follow her. I would be surprised if LVMA did not make an example of Ma, regardless of where she and Stuart are now employed. This is pretty serious stuff if she’s guilty of it.

  • Zezza

    Personally I will never again purchase a Coach product as resale was disappointing. Vuitton is most worried about the dealings of the ex employee not Coaches competition.

    • Sydnie

      Love your comment. I agree 100%. No more Coach for me either!

  • PJGambler

    Employers have a legal right to withhold their trade patents and design secrets. However marketing, accounting procedures, and operational strategies have been “borrowed” and stolen from every body. Unless it is a unique procedure only thought up and used by LV it will be hard to enforce against her-but if she was paid for a non compete she will face charges and probably be found guilty.
    Aside from owning a Coach briefcase, which has held up remarkably well over 15 years, I don’t see similarities with the 2 companies purses. To me, they are not even in the same ball park-appearance wise and cache..

  • Carol

    Has anyone purchased the new designer collection? What do you think of the quality and the price point?

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