The Wall Street Journal's "Numbers Guy" takes a look at the issue of counterfeiting of luxury goods, a major thorn in the side of such couturiers as Coach (NYSE: COH) and Gucci. According to The Numbers Guy, "Washington business groups such as the U.S. Chamber of Commerce and the International Anticounterfeiting Coalition calculate that global counterfeit sales equal $600 billion to $650 billion a year -- numbers parroted in news releases by companies claiming to fight piracy. They build on the often-cited claim that counterfeit goods represent 5% to 7% of all world trade."

The problems with this statistic are twofold: First, it's hard to get accurate data on the operations of organized crime. Secondly, even if we do know how many knock-offs are being sold, it's hard to say how much of that is actually detracting from the sales of the high-fashion labels: Is someone who buys a $10 pair of "Gucci" sunglasses from a street vendor really buying those instead of $300 Gucci sunglasses? Or is that sale instead coming at the expense of less expensive retailers like PacSun (NASDAQ: PSUN) or even Wal-Mart (NYSE: WMT)?

It's unclear how much illegal knock-offs are really hurting designers, but there's another issue that definitely is hurting them and, for now at least, it's legal: lower-budget knock-offs, perfectly legal because there's no logo, of runway couture, often before it even hits stores.

In September, I wrote that one of these knocker-offers saw herself as a champion of womens' rights -- "to look fabulous." But some of the fashion houses are lobbying Congress to pass bills granting greater copyright protection for designers.

Check out this excellent Los Angeles Times piece for the pros and cons of that.

An Associated Press piece looks at the balance fashion houses must strike in the pursuit of increasing sales: How to expand that target market without diluting the brand? It's a lot the challenges musicians face as they attempt to crossover without alienating their core fan base. Some succeed big time -- like Carlos Santana, Pavarotti, and Allison Krauss. Others fail in their crossover attempts and then find that their original fans aren't so quick to welcome them back.

Some industry observers are concerned that top designers have become all-too ubiquitous, licensing their names to cologne and other products outside of the company's traditional scope. And so they're losing their cache.

Is this a concern for shareholders of luxury couturiers like Coach (NYSE: COH)? With newer brands like True Religion (NASDAQ: TRLG) aggressively pursuing licensing deals, should we worry that the company will lose its reputation at a top maker of luxury denim, and better known for licensing its name to any tchotchke it can get a fee for?

When evaluating luxury apparel companies, take a very careful look at the company's efforts to protect its brands. Wall Street's push for quarterly revenue/earnings growth can make just about any new product look tempting to a management team motivated by stock options. But in the long-run, shareholders can only be rewarded if the brand image is managed effectively.