Wednesday, 31 December 2008

Chinese win big bucks for footwear fraud

Fashionista knows how worried many of her readers are about Chinese manufacturers churning out vast quantities of lookalikes and fakes that compete with their own designer products at a fraction of the price -- but sometimes, to quote the classic cliche, the boot is on the other foot.  Here's a tale of four honest Chinese businesses, exporters of ladies' fashion shoes from Guangdong, China, who have just won a lawsuit against Los Angeles shoe importer/wholesaler Citicross Corp. A California Superior Court in Pomona, LA County, has awarded the fortunate foursome full damages plus interest totalling 3 million US dollars for fraud and breach of contract. This just goes to show that, when it comes to business ethics, one should never draw hasty conclusions based on national stereotypes.

Monday, 29 December 2008

The Legend of the Golden Fleece

The Sunday Business Post (Ireland) has picked up news that the Consumers' Association has criticised fashion retailer H&M for marking up its Irish prices by 40 per cent or more. It seems that, in H&M's new South King Street store, Dublin, sterling prices are being multiplied by almost one and a half as a euro conversion. H&M have responded by reminding the Consumers' Association that the Republic is a separate market to the UK and that its sterling and euro prices are set independently of each other.  Dermott Jewell, chief executive of the Consumers' Association of Ireland, is disappointed that the leading retailer had not introduced any real reductions in Irish prices despite the weakening of sterling:
"Their reaction has been either to remove or obliterate the sterling prices. Those who have left prices visible, as is the case here, are defiantly and unashamedly applying prices that do no more than fleece Irish consumers. This is really unacceptable. There is a lesson for us all in this as consumers, but when will we stop and take note? The problem remains that consumers still keep buying at these inflated and outrageous prices, rather than leaving the products on the rails and shelves of the greedy retailers".
Fashionista has a vague feeling that the Golden Fleece was a Greek myth rather than an Irish reality. But isn't Ireland still a free economy in which market forces prevail? Have no savvy competitors taken the opportunity to undercut H&M or to embarrass them through some robust price-comparative ads?

Wednesday, 24 December 2008

Pentland takes stake in Gio-Goi

Fashionista was delighted to read that Pentland had taken a stake in streetwear label Gio-Goi, proving that there are still investors out there with money prepared to invest in exciting growing brands despite the gloomy climate. Pentland has indicated that the Gio-Goi brand will be kept complelely seperate from Pentland and goes to show that new brands looking for funding should not rule out industry players to fund them as well as external sources of funding such as private equity houses and venture capitalists.

Tuesday, 23 December 2008

"Wedding dress and two curries, please ..."

Crain's Manchester Business reports that local importer A&A Fashions is facing the economic downturn by lashing out half a million pounds to turn its warehouse into a wedding venue. A&A's owner Hassan Choudry hopes to attract banqueting and exhibitions business, in particular Asian and Jewish weddings. He is also applying for planning permission for an Indian restaurant.

Fashionista applauds Mr Choudry's initiative, but reminds readers that, while slumps and downturns are but temporary hiccups, fashion is forever. When redeploying assets like business premises when trade is slow, do make sure that, once the fashion trade is on the ascendant again, the escape from Plan B back to Plan A is feasible in terms of time, expense and legal formalities. As an afterthought she adds, as usual the Americans have got there first: the logo on the left comes from an Arizona enterprise.

Friday, 19 December 2008

Why designers are better than models

Supermodel Kate Moss has reportedly just renewed her contract with Topshop for a further three years. She plans to add new collections of lingerie and accessories. Some people may wonder why it is that, in the olden days, beautiful women used to be 'models' but now they are 'designers' (see Fashionista's earlier post on Victoria Beckham). The answer is simple. Hire a model and you hire a clothes-horse. Hire a designer and you hire a name as well as a body, and the designer's fortunes and reputation are more closely tied in with the fashion house or retailer concerned. 

For the record, since 1 May 2007 Topshop has launched eight best-selling collections under the Kate Moss for Topshop label (click here for launch pictures), available in 22 countries worldwide and also in Australia, Europe and the United States via

Wednesday, 17 December 2008

Oily Boy

What's in a name? The Washington Post provides "Fashion Guidance for Aging Japanese Lads", reporting that the latest fashion magazine for "elder boys" intended to encourage expenditure on male fashion in an ailing market is called Oily Boy. Some mistake surely? But then the first choice, "Old Boy" was not available for trade mark reasons. So will "Oily Boy" appeal to the aging male population with savings to spend? The thinking is that it will because "Oily Boy" is the nickname of the late Jiro Shirasu, once the coolest guy in Japan - who made news by allowing himself to be photographed in jeans, stained with oil. Fashionista hopes that 50+ male market will remember Jiro, but is not sure the magazine will catch on here.

Monday, 15 December 2008

Gracefully she slips out of her own name ...

Drapers reports today that Amanda Wakeley has stepped down from the label which will continue to trade under her own name. This story reminded Fashionista of the saga following the sale of another wedding dress designer's label: Elizabeth Emanuel.

Readers may recall that the designer famous for creating Princess Diana's wedding gown sold her business, together with a trade mark application for her name ELIZABETH EMANUEL. After falling out with the purchaser of her business, Ms Emanuel tried to oppose the registration for the ELIZABETH EMANUEL trade mark on the basis that it would deceive the public. The six year legal battle culminated in a referral to the ECJ which held that Ms Emanuel could not deprive the purchaser of a right it had legally acquired from her:

"A trade mark corresponding to the name of a designer and first manufacturer of the goods bearing that mark, may not , by reason of that particular feature alone, be refused registration on the ground that it would deceive the public..., in particular where the goodwill associated with that trade mark... has been assigned together with the business making the goods to which the mark relates".

Accordingly Ms Emanuel now trades under the brand "Art of Being" although her business' URL retains her name: Fashionista hopes that as part of the sale, Ms Wakeley and investor-owner Jason Granite agreed the extent to which she can use her name for any future projects to avoid customer confusion and, most importantly, expensive legal bills.

Old clothes cool in Poland

A striking piece of writing in The New York Times ("In Poland, Style Comes Used and by the Pound") describes the fashion market in Poland, where the latest fashion is second-hand clothes. It seems that the affluent young sector of the market is now so confident of its ability to buy new clothing that it has at last taken to wearing old clothes.

Right: how old is old? Will the clothes of the '60s ever return?

The Tomitex second-hand store, on Nowowiejska Street, downtown Warsaw, is the place where it's all happening, it seems. The article states:
"... One boutique for the latest new styles, aptly named Luxury & Liberty, has opened in the former headquarters of the governing Polish United Workers’ Party, which also previously housed the Warsaw Stock Exchange since the end of Communism".
Fashion designer Ania Kuczynska adds that, after socialism, consumers placed a great emphasis on labels and logos, to prove that their clothes were new and expensive. A willingness to embrace used clothes signals a new maturity in a city finding its way in fashion:
"It’s just the next step in our reality, in our growing economy. The times are changing".
Fashionista recalls the Nineties, when the best way to dispose of last season's European fashions was to export them to Bulgaria (which was then outside the European Union) with a note to the effect that the buyer could do whatever he wanted with them so long as they never came back. Now it seems there may be some mileage in wearing them a bit, warehousing them and then exporting them to countries where 'old' is the new 'new'.

Saturday, 13 December 2008

UKFE joins BCIA as dreams begin to come true

Retail Bulletin reports that, in the first phase of his plan to create a single voice for the fashion and textile industry Peter Lucas, chairman of the British Clothing Industry Association (BCIA), has announced that UK Fashion Exports (UKFE) has been brought into the BCIA and that talks are progressing well with representatives of the textile sector. The combined expertise of BCIA and UKFE is said to be able to provide members with a wide range of services covering legal, technical, health and safety and employment issues, not to mention import/export, sales and marketing, shows and exhibitions and training and development. Adds Lucas:
"There are many other organisations that do a number of these things, but it would be more efficient if we did a lot more of them together, so that when we, the industrialists get together, there are a significant number of us at the same place and time to share our experiences, rather than us participating in a series of smaller gatherings".
Fashionista feels that this all adds up to a lot of sense. The British fashion industry is already divided up into so many sectors, each with so many players in it; anything that makes best use of shared resources and avoids duplication of effort and expertise is surely to be welcomed.

Wednesday, 10 December 2008

Of Sleeves and Arms

Oscar-winning British actress Dame Helen Mirren may be set to get her own M&S fashion label. Having previously bemoaned the fact that designers fail to make dresses with sleeves suitable for older women, when asked if she would accept an offer from M&S to have her own label she said "Oh yes", adding that she would call it "DWS: Dresses With Sleeves". M&S's Stuart Rose has described the idea as interesting and did not deny it.

Fashionista thinks the idea of DWS is surely tongue-in-cheek. She knows those initials stand for "dripping with sarcasm" and "divided we stand". More to the point, given Dame Helen's outstanding portrayal of Her Majesty The Queen, M&S should check out the conditions under which manufacturers of fashion apparel might seek the Royal Warrant and with it the chance to reproduce the Royal Arms.

Monday, 8 December 2008

But do catwalks have nine lives?

The Telegraph's fashion director Hilary Alexander wonders whether the catwalk may itself be going out of fashion in these cash-strapped times. It seems that American designer Marc Bouwer is planning a webcast for next February's New York Fashion Week, costing US$60,000 as opposed to $200,000 for a catwalk show, and that lots of very fashionable folk have been saying all along that they really wanted to try an alternative that wastes less time or proves some other point.

Another point that's just occurred to Fashionista is that someone, somewhere should be paying lower insurance premiums if the risk of stiletto-wearing models losing their balance, injuring both themselves and the creations they are displaying, is reduced.

Sunday, 7 December 2008

Skechers Croc'd?

It's got holes in it -- but is it a Croc? The answer's "no". After indulging in some carefully-phrased hostilities, Crocs Inc and Skechers USA Inc have announced the settlement of all litigation between them in a patent infringement suit brought by Crocs. The terms of the settlement agreement apply to all outstanding litigation in respect of Croc's shoe technology anywhere in the world and appear to result in Skechers concentrating on its core styles in place of more Croc-like footwear.

Fashionista says: when it comes to footwear, IP-savvy people thinks of trade mark rights, designs and copyright and (apart from fame, fortune and glamour) not much besides -- but for anyone who takes a nerdish delight in these things, a search through granted patents reveals that there's a huge chunk of patented technology attached to the ergonomic shape of shoes, the functionality of their soles and the industrial processes for making them.

Friday, 5 December 2008

Keywords v Trade Marks -- let the battle commence.....

Given the growth of the online channel, all fashion retailers have been forced to learn all about SEO (search engine optimisation). One way to drive traffic to your website is through the purchase of keywords using Google's Adwords programme. In May this year Google changed its policy to allow advertisers to buy their competitor's trade marks as keywords. Yesterday Interflora issued proceedings against Marks & Spencers and Flowers Direct Online over their purchase of the "Interflora" mark (and various misspellings of the mark) as Google keywords.

Although brand-owners complain that competitors are trading off their goodwill and reputation by buying their trade marks as Google keywords, others argue that Google is promoting competition and consumers are not confused - they know the difference between a natural search result and a sponsored link. While that may be the case, Fashionista sees keywords as virtual signposts, and can't imagine the Courts allowing M&S to put an Interflora sign in their shop window, so why should the rules be different online?

Brands including Louis Vuitton have taken action against Google in France for selling keywords that were identical to their trade marks. While, in most of these cases, Google lost the first round, it has appealed the French decisions and three references to the European Court of Justice are currently pending. These references give M&S and Flowers Direct the basis to request a stay of Interflora's claim until the ECJ delivers its ruling.

While we are unlikely to get clear guidance from the Courts on this issue in the near future, now that Interflora has decided to take legal action, businesses may think twice before bidding on a competitor's trade mark as a Google keyword.

Thursday, 4 December 2008

Law on Laur

Fashionista has just been reading an enjoyable "life in a minute" bio-feature on a genuine "Law" fashionista -- Natasha Law (you can read it here too, on Times Online). Having now recovered from the disappointment of learning that Ms Law's daily routine does not involve a trip to her lawyers to have the highlights in her design rights freshened, she is consoled by the confession that Ms Law has her eyes on a treasured piece of design antiquity. when asked, "If you could steal a wardrobe from anyone - past or present, fictional or real - whose would it be and why?", she replied:
"Lauren Bacall, whom I have loved and aspired to be like in vain since I was about 13: the hair, the suits, the dresses".
The Fashionista has some good news for her. Lauren Bacall's heyday as a fashion icon was the 1940s, which suggests that -- whatever the jurisdiction and whatever the type of legal right that originally protected the contents of that coveted wardrobe -- a little due diligence should uncover a large amount of clothing that is now nestling firmly in the public domain.

Wednesday, 3 December 2008

Keeping cool in KL, the Islamic way

It's not just regular laws that designers and fashion houses have to contend with -- in some places there are religious laws and customary norms too. In "Funky Islamic fashion struts conservative catwalk", Sean Yoong reports on the scene in Kuala Lumpur, where Muslim shoppers are being treated to an exciting range of colours and designs on garments that combine sartorial elegance with the demands of modesty and religious belief. The article states:
"Fashion gurus say Islamic apparel is a fast-growing segment of their worldwide industry, fueled by growing numbers of affluent, liberal Muslims who want to balance propriety with style and globally renowned designers such as Elie Saab whose creations can fulfill religious rules".
A notable export market is the United States, where Muslim women are said to "want to be a little bit more trendy than what is being given to them from Yemen." Elie Saab plans to expand her collections to other countries with sizable Muslim populations, such as China and France. Even non-Muslim designers are getting in on the action: a case in point is the ethnic Chinese Malaysian Lee Khoon Hooi, whose idiosyncratic zipper necklaces and tulip-shaped gowns have been sold in boutiques from Beverly Hills to Taipei.

Tuesday, 2 December 2008

Posh confession raises copyight issues

Weighing in at nearly 3,000 words, Lisa Armstrong's "Posh Frocks" (Times Online) provides a fascinating insight into the mind of Victoria Beckham, once better known as Posh Spice but now a fashion label in her own right. This interview touches on an aspect of copyright law that is often poorly understood:
"Without apparently taking offence (she has been fighting cynicism since she started school), she tells me that she does the designing. “Do I draw? No. Then again, nor do lots of designers. But I put it all on myself and walk around in it, and I know what feels comfortable. I know how a dress should sit. I've worn so many in the past and when I see the photographs I think, crikey, my boobs are up round my neck again because the corsets are too short and not cut high enough. Like I knew I would spend a lot on the best-quality zips because, like many women, I've had my share of crappy zips. I wanted a zip that undoes from both ends because then you can either put the dress on over your head or, if you don't want to mess up your hair, you can step into it - and also, you know, going to the loo wouldn't be this whole big palaver.”"
This raises the issues of authorship and ownership of copyright and design right in clothes designs, templates for manufacture and the garments themselves. If the person producing the actual embodiment of the design is not the designer herself, and if that person has sufficient scope for artistic discretion that the resulting design reflects a degree of artistic initiative from the person producing the sketches as well as the person giving the instructions, it's easy for copyright disputes to arise. A few swift strokes of the lawyer's pen can produce a solution to this problem that is at once both functional and elegant -- and which won't spoil anyone's hair-do.

Monday, 1 December 2008

Shutting up shop - how to get redundancy right

With the news this week Woolworths has gone into administration, it is inevitable that the New Year will see a number of store closures, and the accompanying redundancies. With this in mind, set out below is a brief overview of the redundancy process.

1) What is redundancy?
This is when an employer dismisses an employee because it will be closing down the employee's work place 9as in this scenario) but it will also apply where an employer will not be carrying on the part of the business in which the employee works, or it needs fewer employees to do that type of work.

Redundancy is a potentially fair reason for dismissal. But, unless the employer follows a proper procedure in a genuine redundancy situation, there is a risk the dismissal will be found unfair. In the event that an employee is successful in an unfair dismissal claim, they could be awarded up to £63,000 (£66,200 for dismissals after 1 February 2009). Store closures which involve making 20 or more employees redundant within a period of 90 days or less, require an employer to follow a collective consultation procedure in addition to consulting individually with employees.

2) When is a redundancy dismissal fair?
There must be a genuine redundancy situation and a fair selection process. There must be appropriate warning and consultation, a fair selection process and consideration must be given to suitable alternative employment for the employees in question. For retailers this could mean offering to move an employee from shop floor to warehouse (or vice versa) or to another store.

3)What is the process for collective redundancies?
A collective redundancy situation arises where an employer proposes to make redundant 20 or more employees at one establishment within a period of 90 days or less. An employer must consult with appropriate representatives at least 90 days before the dismissals take effect if 100 or more employees are to be made redundant, or otherwise at least 30 days before.
The consultation process must include consultation about ways of avoiding the dismissals and of mitigating the consequences of the dismissals. The employer must disclose in writing to the representatives certain information including the reasons for the proposals, the number and description of employees to be made redundant, and the method of selection. Failure to consult adequately or at all can lead to an Employment Tribunal making a protective award (of up to 90 days' pay per employee).
An employer contemplating closing a store may well find that it is caught by the collective redundancy regime, and it is therefore important to allow a sufficient period of time to carry out the consultation process before the firm dismissal takes effect.

The Fashionista says that since the purpose of a redundancy programme is to reduce costs, it makes good financial sense for employers to get specialist advice upfront when considering a store closure to ensure they get the process right and minimise the risk of expensive and time consuming Tribunal claims and possible damages awards.

New look, no mark

Weymouth (UK) based fashion house New Look has made quite a name for itself, but it's not an easy name to keep to itself. Last week the Court of First Instance dismissed its appeal against the failure of its application to register the words NEW LOOK for a whole raft of fashion items and accessories as well as a store name for its retail trade. Said the court, the words were
"a banal expression which is part of everyday English and does not present any linguistic difficulty. That expression will thus be understood to mean ‘new appearance’ by a public who are native English speakers, but also by people with a basic knowledge of English as such a level of knowledge is sufficient, in the present case, to understand the sign applied for".
What's more, New Look couldn't show that its name had become distinctive of its business throughout the territory of the European Union, the trading zone that the Community trade mark covers. This decision only covers the words NEW LOOK: it doesn't affect the eye-catching logo at the top of this post.

Fashionista says, choosing the right name for a label is a tough call. Names that send out a strong and attractive message are often those easiest to market, but their very strength as a message to shoppers is a weakness because messages like "new look" are kept free for all traders to use.

Friday, 28 November 2008

With the rise of company failures will pre-packs become the norm?

A pre-pack is a sale of a company's business and assets (often to existing management) that is negotiated prior to the formal appointment of an administrator with the intention that completion of the sale take place immediately following such appointment. Recent examples of pre-packs include Faith Shoes.

Creditors often feel hard done by in pre-packs as they feel they have been kept in the dark with the sale having taken place before they have even learnt of the company's insolvency or had the chance to exercise their contractual rights and that a better price could have been achieved by putting the business out to tender. Others would argue that pre-packs are a legitimate tool to preserve value in a company's business for the benefit of stakeholders generally leading to the preservation of jobs and a greater realisation of value than might otherwise be achieved. They point to the fact that they enable a company that would otherwise not have sufficient funds to be traded by an insolvency practitioner in administration, to effect a sale that would not otherwise be achieved and to the fact that it prevents the company's customers, third party suppliers, landlords and intellectual property licensors exercising any automatic termination rights on the commencement of an insolvency process, realising the value of assets that might otherwise be lost.

Fashionista thinks that there are circumstances where pre-packs may be appropriate but it is clearly not a one-size-fits-all approach. Finally, a word of warning if you are thinking of doing a pre-pack and you have leasehold properties, watch out for the landlords. They often don't take kindly to finding that they have a proposed new tenant for their shop or business premises with little or no notice. The potential purchaser would be wise to sound out a landlord immediately before the sale to avoid the risk that he withholds his consent to any assignment thereafter.

"The bag doesn't know it's a bag ..."

Canada's Eye Weekly carries a punchy piece, "The Louis Vuitton Con", by Rea McNamara, which discusses the ideas of Marcus Boon, an academic whose forthcoming book In Praise of Copying seems guaranteed to raise a storm. McNamara writes:
"Western society inherited from Plato the most popular concept of copying, that "everything is a copy" (also known as mimesis). Heidegger would later say that mimesis equals copying a presentation — “all copies are made and produced” quoted Boon — and the parodying of something in a manner. How’s a bag then the imitation of an idea?

Perhaps it has something to do with our concept of luxury. Boon showed an original 1927 Louis Vuitton ad with this delicious sales pitch: “The trunks that last a lifetime… is French but LOOKS French… not only IS the finest but APPEARS the finest.” The idea of an "essential" LV outward appearance is complicated, a sameness not easily differentiated between a real Canal Street stall with fake product and the faux Louis Vuitton stall (with real product) installed outside the Brooklyn Museum for their Takashi Murakami retrospective (the Japanese artist famously re-made the LV monogram in "super-flat" technicolour). Outsourced manufacturing muddies it further — is the Louis Vuitton bag really French? LV artistic director Marc Jacobs is American, after all".
The article continues in much the same vein, with lots of philosophical points to ponder. For example,
"Louis Vuitton would like you to believe in their version of a "projected" fixed original essence. But a bag isn’t really a living entity is it? It can’t do transcendence. The bag doesn’t know it’s a bag, and while Vuitton would lead you to believe that designation is key (neat seams, hologram authenticity cards, serial codes), it’s obviously unstable".
Fashionista awaits the publication of Professor Boon's book with interest and trusts that, in view of its title and its author's thesis, it will not be burdened by the presence of a copyright notice.

Thursday, 27 November 2008

VAT down to 15%, but do retailers have to pass it on?

In the wake of the Government's pre-budget report announcing a reduction in the rate of VAT from 17.5 % down to 15%, Fashionista sets out below a practical guide for retailers about the impact of the VAT reduction, which will apply from 1 December 2008:

1) Is there any obligation to pass on the reduction to customers?

The short answer is NO. HMRC has issued guidance explicitly stating that, whilst businesses are strongly encouraged to pass on the reduction, there is no obligation to do so. This is consistent with raft of consumer law in this area.

2) What if the retailer DOESN'T pass on the reduction?

Retailers may not want to pass on the reduction (at least not immediately) for a number of reasons, including the logistical nightmare (and cost) of repricing goods and services, amending billing systems and changing advertising and marketing materials, particularly at such short notice.

Perhaps the main issue is one of potential negative publicity, and its impact on brand value and sales. However, retailers (particularly those who operate exclusively online) should also consider what their consumer terms & conditions say. Normally, where terms & conditions change (including prices), customers must be given notice of the change and, if the change disadvantages them, given a right to terminate. Depending on how a retailer's Ts&Cs are drafted, failure to pass on the VAT reduction could constitute a change in price which disadvantages customers, even though the headline figure doesn't change, because the amount of revenue retained by the client will increase. Under the Distance Selling Regs (which apply to any etailer or retailer selling through a catalogue), businesses must set out the price of goods or services including taxes. However, except in specific industries (such as insurance), there is no obligation to set out how much the tax element of the price is. Therefore, if the reduction is not passed on, clients are unlikely to have to reprint their price lists and other marketing material.

3) What if the retailer DOES pass on the reduction?

While this is the most desirable option from a PR perspective, it does pose significant practical problems. For most of the high street retailers, the task of re-pricing all stock is a logistical nightmare. As Drapers reported yesterday, while most of the UK's major retailers are intending to pass on the 2.5% reduction, many are planning to take off the discount at the till point rather than by re-ticketing stock.

From a legal perspective, this raises an interesting question about the application of the recent Consumer Protection from Unfair Trading Regulations 2008, which make it a criminal offence to give a misleading price indication. The Regulations provide that retailers are exposed to potential criminal liability if they mislead consumers as to price. When these Regulations came into force earlier in the year, BERR issued guidance which stated that, in the event of a change in the rate of VAT, businesses would have 14 days from the date of the change (i.e. from 1 December) in which they could merely use "a general notice or notices" to avoid giving misleading price indications to consumers. This could imply that all materials displaying incorrect prices should be replaced by 15 December to avoid the risk of prosecution.

Fashionista has learnt that one high street retailer intends to place signage at the till point informing consumers that the VAT reduction will be discounted at the till, so that the price as shown on the ticket includes VAT at the old 17.5% rate. On the basis that other retailers intending to take off the discount at the till will use similar signage, they should be able to escape criminal liability under the Regulations. This is because, to attract criminal liability, a retailer must:

(a) knowingly or recklessly engage in a commercial practice which contravenes the requirements of professional diligence, AND
(b) the practice materially distorts or is likely to materially distort the economic behaviour of the average consumer with regard to the product.

In this scenario outlined above, Fashionista doesn't think either limb is fulfilled. "Professional diligence" is a defined term which refers to the special skill and care reasonably expected of a trader, commensurate with honest market practice and the general principle of good faith. A retailer who is seeking to pass on the VAT saving and using signage at the point of sale to inform is customer is not acting in bad faith. Further, the second limb, would be fulfilled only if the consumer would not acted differently had he known the correct price. Fashionista can't imagine too many shoppers complaining that they have paid less than the ticketed price.

Tuesday, 25 November 2008

'Primark effect' raises parliamentary hackles

Today's Telegraph reports that British MPs are blaming throwaway fashion from shops such as Primark for an increase in the amount of clothes being dumped in landfill sites. The so-called 'Primark effect' arises when cheap garments, often made from manmade materials that cannot be recycled easily, are worn just a few times and then binned, according to Parliament's Environment, Food and Rural Affairs Committee.

Above left: whatever you think of Primark's fashions, the chain has proved more popular than most UK parliamentarians -- and now it seems its clothes are likely to outlast them too.

Fashionista says MPs may be wasting their wrath on the wrong target. If clothes are made of substances that can't be recycled, they're going to cause environmental problems however many times they're worn. And not all clothing is binned because it's cheap: some is jettisoned because it doesn't fit any more, or murdered by owners who can't follow the cleaning instructions.

Friday, 24 October 2008

How to improve your online look - seminar

Despite the credit crunch, the online retail sector continues to grow (albeit at a slightly slower rate than in previous months). Improving Your Online Look was a timely opportunity for the retail sector to gather and consider the future of e-tailing and how to maximise the time a customer spends online.
The seminar held at Olswang on 24 October kicked off with a fascinating talk from retail consultant, Tony Stockil from the Javelin Group, who took us on a whistle-stop tour of his view of how the online sector is likely to develop over the next 2 to 5 years.

Ashley Hurst, associate in the Media Litigation team at Olswang, discussed the issues surrounding adding social networking capability to retail websites. As well as using established social networking websites such as MySpace to generate publicity for their products and drive traffic to their websites, many retailers are now looking towards developing their own websites in order to build in elements of user-generated content to increase brand loyalty.

Ashley examined how, from a legal point of view, website operators can be held liable for user-generated content on their websites, risking being sued for libel, breach of privacy and intellectual property infringements in respect of material posted on their websites by customers or other interested internet users.

Online sales have been out-performing the high street for some time now. For many retailers, entering the online space can be a time consuming and costly exercise. Tom Torkar, associate in Olswang's Technology team, looked at sourcing some or all online retail processes from a third party service provider as an answer to these concerns. Typically outsourcing can result in lower costs, an improved customer service and it should involve a service provider who has a higher degree of expertise and resources than the retailer has. But, if not managed correctly, the process can lead to a loss of control and visibility of the sales processes and the customer experience. Tom went throught some of the contractual mechanisms that retailers can put into place to manage the service provider's performance and to reduce risks for a retailer.

Sarah Wright, partner in the Intellectual Property team at Olswang (and founding member of the Fashionista team), discussed the unique challenges faced by brand owners online as they try to police misuse of their brands. Sarah explained that while the domain name dispute processes offered by ICANN (the UDRP) and Nominet are quick and relatively inexpensive, a brand owner cannot recover its legal costs or get any damages. Filing a UDRP claim against a domainer therefore has little deterrent effect. By issuing Court proceedings for trade mark infringement, a brand owner hits the cybersquatter where it hurts: the pocket.

Another challenge for online retailers is the growing cost of paid-for searches and the fact that since May 2008, Google amended its Adwords policy making it possible for competitors to purchase keywords identical to someone else's brand to direct traffic to their website. Without a precedent in the UK confirming the legality (or not) of purchasing third party trade marks as keywords, retailers are faced with a stark choice of either joining in and bidding on others' brands or watching their online ad spend grow as they compete with rivals to purchase their own keywords.

Monday, 20 October 2008

The Winter of Discontent – the battle over monthly rents

10For those retail landlords who are feeling the winds of change as tenants dig in for the months ahead and bargain hard for letting concessions, talk of monthly – or even weekly – rents is not breaking news. Unsettling as the Hermes "revolution" may be, the principle of breaking with the tradition of quarterly advance payments to assist tenant cash flow is nothing new.

The latest debate - echoing calls for the same in the early nineties - relating to monthly rental payments has raged for the best part of a year. Whilst there are arguments for reforming the practice, landlords are faced with not only the threat of voids and devaluation of assets but also the reality of meeting quarterly/contemporaneous repayments to their lenders.

Common examples of other rental concessions being negotiated by tenants are additional break opportunities, extended rent free periods, turnover only deals and demands for landlord capital contributions. All bring with them their own problems as landlords look forward to reviews and ERVs (estimated retail values).

Buckling under the pressure from Sir Philip Green and Lord Harris, some major landlords have just announced that they will allow retailers with less than four stores to pay rents monthly, with no financial penaltyIt now seems certain that a return to the recession of the early nineties is on the cards and that for retail landlords there is still more to come as we head towards Christmas and reports of household name retailers facing administration become daily rather than monthly news.

Many landlords are taking advantage of this period of low activity in the investment market to review their portfolios and the projected ability of their covenants to perform. With Christmas approaching landlords must be just as pragmatic as tenants and start putting in place strategic plans to combat what could quite possibly be, "the coldest winter since records began….".