Cartier to Resellers: Watch Out!

Temperatures are rising this summer in more ways than one. It may be unbearably hot outside, but when it comes to the luxury brand market, things are positively boiling over.

Luxury brands have been beating the war drum loudly lately. With a weakened global economy eroding their profit margins, luxury brand marketers have seen their traditional upscale buyers turn away from the brands they once cherished. Instead, many of these consumers are trading down and looking for lower-priced bargains. Even worse, some are purchasing counterfeit goods.

This has led to a number of aggressive actions by the luxury brands, such as pressuring the European Commission to give a brand the authority to designate which online distributors can sell that brand's products. The Europe-wide ruling, which went into effect in June, also gives a brand the legal means to pursue e-tailers who are illegally selling the brand's goods or misrepresenting the brand's name.

Now Cartier is trying to extend that same kind of authority to the United States by going after an online retailer who sells name brand second-hand goods at a deep discount.

Cartier has brought suit in a U.S. District Court against HauteLook, accusing the e-tailer of making damaged and second-hand Cartier goods available on its site without permission.

In its complaint, Cartier accused HauteLook of "causing immediate and irreparable harm to the Cartier brand and trademark." Cartier says HauteLook sold used Cartier watches, damaged Cartier goods, and products with defaced authenticity certificates or warranties that do not apply, according to Reuters.

HauteLook had no immediate comment on the lawsuit. According to the company's website, the retailer holds 48-hour sale events, known as "flash sales," on leading brands. HauteLook says it "offers discounts of 50 to 75 percent off to millions of members in the U.S. and Canada" and claims that "over 1,000 high profile brands have chosen HauteLook to host more than 2,500 private events."

Versace recently won a $20 million lawsuit in the U.S. against retailers who were selling counterfeit goods. If Cartier wins this suit, it will be one more key victory for brands that are fighting hard to protect both their image and their bottom lines.