Inclement Leather

Coach Inc. (New York), the manufacturer and marketer of high-end leather goods and accessories, has filed a complaint with the Japanese Fair Trade Commission (JFTC) regarding rival LVMH Moet Hennessy Louis Vuitton (Paris). Coach’s complaint is that LVMH has harassed Japanese retailers in violation of Japan’s anti-competitive practices.

The complaint, filed in Tokyo with the JFTC, says LVMH has engaged in “inappropriate and threatening behavior by exerting pressure on common business partners.” In these examples, Coach claims LVMH has threatened department store management with either not going forward with development plans or pulling the Louis Vuitton brand out of certain locations entirely if these retailers allowed Coach to open or expand branded vendor shops.

According to Coach, the Japanese unit of French luxury brand LVMH Moet Hennessy Louis Vuitton allegedly put pressure on department stores that were in talks with Coach Japan, saying that Louis Vuitton outlets would withdraw from the stores if Coach Japan were allowed to open or enlarge its outlets.

Louis Vuitton Japan said it had “no information other than what has appeared in the press. “LVMH notes it has been active in Japan for more than 40 years, and not only have its commercial practices there never been criticized in any way whatsoever, indeed they are regularly praised.”

The LVMH statement went on to say it would vigorously defend itself. “[We] can only question the motivation of the firm that filed this complaint, which is known to manufacturer most of its products in regions with cheap labor.”

Coach said it is challenging LVMH’s behavior even though those practices have not impeded Coach’s distribution in the marketplace. Coach has been rapidly expanding its sales on the Japanese market for luxury band goods, coming closer to market leader Louis Vuitton. For the current year, Coach projects sales to grow 30 percent. Coach said it believes that “fair competition in the marketplace should be the only way to allow Japanese consumers to decide the destiny of our respective brands. Further, management’s sense of fair play does not allow Coach to stand by and permit others to infringe upon the company’s rights to trade freely in the market.”

The JFTC said it will launch an investigation.