The biggest competition or threat for luxury brands is not another luxury brand but the knockoffs, counterfeits or fakes. The knockoffs have become an organized global business with powerful players having sound financial backing and a strong and reliable distribution channel. Even conservative estimates of fake sales go in to billions of dollars.
The big brands are always alert and do their best to stop the knockoffs from stealing their share of the market. But the fakes are so agile and innovative that if you catch them here they pop up elsewhere. One such case came to its conclusion after 24 long years. The case involved the Burlington Coat Factory and it seems that they are more than great coats; they are also former hawkers of knockoffs. The case dates back to 1986 when Burlington Coat Factory sold a bunch of fake Fendi handbags.
Now, 24 years later, the case has finally been settled. Burlington must pay Fendi over $10 million in damages. It might surprise some people that the discount retailer is happily forking out the cash to Fendi who are amongst the most powerful luxury brands in the world. You can very well imagine how lucrative and big the business in knockoffs is.