Haute Couture icon Louis Vuitton will be entering uncharted waters with its first television ad campaign, a 90-second travel-themed commercial shot in France, Spain, India and Japan.
The company is calling it "the first ever on-screen corporate campaign by a luxury house."
It's a bold move by a company looking to expand its footprint in fast-growing markets like China, although the ad will air worldwide. But I'm not sure if it's the right move.
Just a few days ago, I wrote on WalletPop, our new personal finance blog, about the cooling demand for designer handbags. The reason? Fashion-forward consumers are concerned that the tops bags from the top designers have become all-too ubiquitous in recent years, and no longer project an image of class and exclusivity.
A television ad campaign could further turn off these consumers and do considerable damage to the brand's cache. There's a reason that Louis has opted not to do commercials in all its years as a top fashion house, and the abrupt shift raises questions.
Louis Vuitton is a division of LVMH Moet Hennessey L.V. (ADR) (OTC: LVMUY), publicly traded under an ADR under the symbol LVMUY on the Pink Sheets.
With subprime meltdown and credit crunch in full-swing, there is a lot concern about how consumer spending will be effected. Just yesterday, Fortune's Geoff Colvin declared the American consumer tapped out, saying that the "evidence is powerful that, as incredible as it may seem, U.S. consumers are going to start living within their means again. Brace yourself."
So what does that mean? Well for starters, companies that depend on consumers living above their means probably won't fare too well: This could include many middle-market apparel stores, furniture stores, and other non-essential moderate-luxuries. An old couch looks like a lot more comfy when you can't pay your bills.
But investors seeking solace from the weakened consumer (and remember, you should only seek solace if you think this is likely to be a long-term shift. If you think it's temporary, you may want to buy on the bad news) may want to look toward luxury goods makers. According to BreakingViews, "If there's a financial crisis going on, nobody told the world's luxury brands. LVMH Moët Hennessy Louis Vuitton, the French luxury group, and Burberry, the United Kingdom apparel designer, say their wares are flying off the shelves. At LVMH, third-quarter revenue grew 15% -- the fastest pace in years -- driven by handbags, watches and jewelry. Appetite for Burberry's tartan creations pushed its first-half retail sales up by 25%, as the group continued its march across the American heartland." BreakingViews goes on to speculate that continued weakening in the US economy could hurt these brands, but I tend to disagree. Luxury goods consumers are well-positioned enough that they just aren't that vulnerable to the factors hurting lower- and middle-income consumers: rising gas prices, housing woes, etc.
At the opposite extreme, I continue to think that discount stores, especially dollar stores, could do well if the middle-class decides to tighten its belt. But the little luxuries that middle class shoppers like to indulge could find themselves squeezed.
This post is part of our Battle of the Brands feature. Let us know which brand you prefer, and watch out for more Battle of the Brands posts.
Recently, someone told me that only 1% of all Louis Vuitton handbags in the world are authentic, which is quite surprising considering how many people, young and old, tote the luxury status symbols. I guess what most of them don't realize is that some of these bags are the real McCoy, while it seems a lot more are just reproductions. Several weeks ago, I posted Coach bags: You're just not worthy because Coach Inc. (NYSE: COH) was stepping up their luxury handbag game with a new, more exclusive line of bags priced from $10,000 to $500 and adding hoity-toity boutiques to bring in a more elite clientele.
While both Coach and Louis Vuitton (LVMH) (EPA: MC) already have classic and luxury goods status among many, it seems that both companies are grasping for the top rung of the handbag ladder. LVMH may seem to be ahead of the game, since A-list celebrities such as Uma Thurman, Naomi Campbell, Scarlett Johansson, and even rapper Snoop Dog often travel in style and are photographed with LV bags. In comparison, I can't even think of an instance where I've spotted a celebrity with a Coach bag. After a quick Google search, I did however find a picture of Jessica Alba holding a cute Coach Daphne Straw Top Handle Bag ($168), which surprised me because most women I see with Coach bags tend to be older and middle class. In fact, a budding fashionista once told me that Coach bags were "mom" bags. So then it's understandable that Coach would spring this new Legacy line on us in a not-so-veiled attempt to lose its "mom" status.
As reported on Auctionbytes, eBay Inc. (NASDAQ:EBAY) recently announced an initiative to thwart the listing of counterfeit goods on its auction site. The program will be targeted at a tiny selected group of particular product names. Most probably in reaction to pending litigation by companies such as Louis Vuitton and Christian Dior Couture, this move seems to be a bit of oil targeted at a few squeaky wheels.
The details of the program are obtuse and ill-defined, but in part, the initiative involves a smattering of criteria which when encountered will trigger a red flag and expose a seller to manual inspection of their item listings. Included in the program are new restrictions against the listing of certain items from the countries of China and Hong Kong. While on its face this program seems helpful and reasonable, overall it is an unimpressive effort according to sources who have contacted this writer.
"What an unmitigated load of bull----!" , was the response I received from one associate. She sees this program as nothing more than another stopgap PR play reflective of the same type of flimsy "solution" eBay employed to quiet the Skype overloading of servers issue. In part, the concern is that while this program may indeed reduce the number of attempts to sell a few counterfeit copies of a few specific items, it will do nothing to pursue or prosecute those who are habitually engaged in practices of illegal merchandising on eBay's site.
Those French business folks are fiercely protective of their Louis Vuitton handbags, aren't they? Louis Vuitton has filed a $47 million lawsuit against online auction giant eBay for not "doing enough" to stop or stem the sale of counterfeit Vuitton goods on the auction site. It's another example of eBay being called out for not policing its auction site for counterfeit goods trafficking. If Vuitton were to win this suit, eBay might as well shut down, as there are counterfeit and knockoff goods in just about every possible eBay category. Fraudsters out to make a quick buck have flooded the auction site with low-quality, cheap goods -- which buyers crave, apparently.
Should eBay be held responsible for all the commerce atrocities that happen daily at the online auction giant? If so, the company may need a few hundred people on staff just to keep up with all the apparent fraud and counterfeit goods being listed and sold every single day. If not, how much is "enough" when trying to counter the counterfeiters?
Goodness -- those uppity bagmakers known as Louis Vuitton really are stingy about how, when and where its products are sold. It's hard to fault a company for protecting its trademarks and branding, but when it comes at the expense of suing an advertising aggregator, heck, they just don't care. Extreme exclusivity means mounting machine guns to your storefront, in a manner of speaking.
With that said tongue-in-cheek, heh, French personal item manufacturer Louis Vuitton has won a French court case against Google for Google's AdWords advertising platform violating Vuitton's trademarks. I can partially understand that Vuitton did not want to have blatantly counterfeit "Vuitton" products being advertised alongside the real thing in Google AdWords ads, but is it really Google's responsibility to police such things? Google is an aggregator of things, not really a producer of content. If anything, Vuitton should be going after the counterfeit advertisers for copyright infringement, not the conduit that makes those items visible to prospective customers.
This same argument is usually used in peer-to-peer file sharing discussions -- should "conduits" that allow music and movie pirates to trade content be the ones held responsible? I don't think so, since the "conduit" has many legal uses as well. The online commerce and consumer community will surely see more of these ridiculous lawsuits spring up from time to time, much to the chagrin of Google's bottom line.
Fendi, the upscale handbag brand owned by Louis Vuitton of France, has taken issue with Wal-Mart over what it claims is the chain's selling of counterfeit Fendi items in its Sam's Club stores. Fendi actually filed a lawsuit in Manhattan this past Friday with this claim as the leader.
Fendi claims that the bags, purses and wallets are infringing on Fendi's trademarks and designs, while being very close replicas of actual Fendi products -- and these knock-offs are selling for hundreds of dollars less than actual Fendi items. While knock-off products are nothing new in the retail trade, the fashionable Fendi brand and the reach of Sam's Club stores all across the U.S. do not make for a friendly and cuddly situation.
While Wal-Mart stocks knock-off items in droves in many of its stores, this is the first time in recent memory that it has allowed a vendor to bring in product with a price point that would only light the fire of a well-known upper-crust brand land Fendi. Imagine if Elizabeth Taylor's "White Diamonds" perfume was bing sold for $15 per two-ounce bottle at your local Sam's Club. She'd be in a tizzy about that.
As reported on 
Those French business folks are fiercely protective of their Louis Vuitton handbags, aren't they? Louis Vuitton has 
Goodness -- those uppity bagmakers known as Louis Vuitton really are stingy about how, when and where its products are sold. It's hard to fault a company for protecting its trademarks and branding, but when it comes at the expense of suing an advertising aggregator, heck, they just don't care. Extreme exclusivity means mounting machine guns to your storefront, in a manner of speaking.
Fendi, the upscale handbag brand owned by Louis Vuitton of France, has taken issue with Wal-Mart over what it claims is the chain's selling of counterfeit Fendi items in its Sam's Club stores. Fendi actually filed a lawsuit in Manhattan this past Friday with this claim as the leader.
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Waiting for the other shoe to drop: The looming credit crisis
