Last year, however, a Canadian con artist was accused of expanding the repertoire of imitation Guccis, offering fake stock options in the the Gucci Group. Claiming that he was a member of the Gucci board and was tasked with creating an influx of cash, Timothy Khan sold over $7 million in nonexistent Gucci stock in 1995. By 1996, the investor who had purchased the counterfeit stock was demanding that Khan sell it. Offering a variety of excuses, backed up by a variety of seemingly official documents, Khan held on to the investor's money for a further eleven years. On March 19, Khan pled guilty to two counts of securities fraud and wire fraud. Each count carries a maximum sentence of twenty years in jail, and Khan's sentencing is set for June and will be held in Manhattan federal court.

Suddenly, a $20 knockoff purse doesn't seem like such a big deal!

Counterfeit Gucci: It's not just handbags! originally appeared on BloggingStocks on Thu, 27 Mar 2008 15:14:00 EST. Please see our terms for use of feeds.

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.

Are counterfeit luxury goods a big problem? originally appeared on BloggingStocks on Sat, 20 Oct 2007 09:40:00 EST. Please see our terms for use of feeds.

PPR Group, parent company of Gucci, has offered $7.1 billion for Puma, the company that manufactures basically all of my footwear. PPR is publicly-traded in France, while Puma trades in Germany. PPR said that its offer was "firm and final," but the market seemed to disagree. Puma shares traded slightly above the offer price, indicating that many observers believe that a bidding war will ensue. One prime suspect: Nike.

An acquisition of Puma might make sense for Nike Inc. (NYSE: NKE). While Nike has been hugely successful in the sports apparel market, it has not even come close to duplicating Puma's success as a cross-over, luxury brand for the fashion-conscious. Think of Nike as Pete Rose: Very adept at sports, but widely seen as a bum outside of baseball. Puma is more like David Beckham: Amazingly athletic, in addition to being urbane and sophisticated (and married to the coolest of the Spice Girls).

Nike is currently sporting very little in the way of debt, and could probably afford to take on Puma. The question is, given the company's history of lackluster acquisitions, do they want to?

Gucci chasing Puma originally appeared on BloggingStocks on Wed, 11 Apr 2007 09:56:00 EST. Please see our terms for use of feeds.

Puma sports a $7 billion bid from PPR originally appeared on BloggingStocks on Tue, 10 Apr 2007 17:15:00 EST. Please see our terms for use of feeds.