Walk into a street market anywhere from Manila to Manchester, and someone will be selling T-shirts branded with the distinctive CK logo of Calvin Klein, the New York fashion designer.
If the price is very low, the T-shirts are probably fakes. Calvin Klein, like most other internationally-known fashion designers, has, for a long time, had problems with counterfeiters selling poor-quality merchandise bearing his brand name. Now he is doing something about it. “As the Calvin Klein brand has become well-known, we’ve seen a big increase in counterfeit activity”, says Gabriella Forte, chief executive of Calvin Klein. “The better-known the brand name, the more people want to rip it off”.
In the past Calvin Klein took a relatively passive approach to the counterfeit problem. The company has now got tougher by establishing a network of employees and external specialists to uncover copyright abuse.
The move began with a general change in corporate strategy whereby Calvin Klein has aggressively expanded its interests outside North America. Calvin Klein has been one of the leading designers in the North American market since the mid-1970s. Now Calvin Klein is building up its fashion business in other countries. It has increased its investment in advertising, and restructured its licensing arrangements by signing long-term deals wit partners for entire regions such as Europe or Asia, rather than giving licensing rights to individual countries. But as sales and brand awareness have risen, Calvin Klein has become an increasingly popular target for Asian and European counterfeiters, alongside other luxury brands such as Gucci, Chanel and Ralph Lauren.
The fake goods, mostly T-shirts, jeans and baseball caps, not only reduce the company’s own sales but damage its brand image by linking it to poor quality merchandise. “You’d be amazed at how many people pay $5 for a T-shirt without realizing it’s counterfeit”, said one executive.
From The Financial Times