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On the Importance of Grad Students   In Defense of Securitization
Jul 27 2007 11:49AM EDT

When Counterfeits Increase Brand Value

Lauren Goldstein Crowe reminisces today about the early days of Kate Spade:

The brand launched in 1993 and was famous for simple nylon bags which might be the most easily knocked-off design in handbag history. Thanks to legions of fans in Japan, the brand was able to survive the knock-offs and now makes much of its money in other categories, like home furnishings.

Just one question, here: has any brand ever been severely damaged by knock-offs? The way Lauren writes, the Kate Spade knock-offs were bad things, a problem which the company had to overcome. The other way of looking at it, of course, is that the knock-offs were the best thing which ever happened to Kate Spade, only served to enhance the value of the Kate Spade brand, and were instrumental in allowing its founders to sell the company for $124 million.

One of the most faked brands in the world is D&G, and I'm told that they are almost aggressively unhelpful when any law-enforcement agency asks for their assistance in prosecuting counterfeiters. My guess is that they know full well that the existence of counterfeits only serves to enhance the desirability – and sales volumes – of the real thing.

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