Summary: On Friday Coach (COH) filed a lawsuit against Target (TGT), claiming that Target is selling a bag which infringes on various Coach trademarks. According to Coach, not only do the bags in question have Coach's signature C-pattern printed on the bag, the word "Coach" is actually on the hand tag. According to Coach CFO Mark Devine, "We have gone into stores in Florida and purchased this ourselves. It isn't ours." Target, claims the bag is an authentic Coach product, stating, "Target has procedures in place to ensure that we do not sell counterfeit products to our guests... We have been assured that the Coach product showcased in our store is authentic, therefore we believe the lawsuit is without merit." This is not the first run-in Coach has had with Target. On September 21, Coach sent Target a letter claiming that target's Isaac Mizrahi tote bag infringed on a Coach design. More recently, Coach claimed that another Target product (this time selling under the Cherokee label) infringes on Coach's abstract "Optic C" design.
Related links: Full WSJ article • Lower Gas Prices Help Low-End Consumers, Retailers • Where is the Retail Carnage Everyone Keeps Talking About? • Solid Growth and Appealing Price Make Coach Attractive • Coach CEO Comments on China Growth Strategy • Gross Margin Kings -- Apparel & Accessory Stocks • Earnings Conference Call Transcripts: Target Q2 2006 (August 10, 2006), Coach Q4 2006 (August 1, 2006).
Potentially impacted stocks and ETFs: Wal-Mart (WMT), Kohl's (KSS), Sears Holding (SHLD), Costco (COST), Nordstrom (JWN), Saks (SKS), Tiffany (TIF). ETF: Retail HOLDRs (RTH)
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