Chico's vs. Caché: When "Stolen Designs" Aren't Worth a Lawsuit
File this lawsuit under "Waste of Money." Chico's (CHS) -- specifically its White House|Black Market division -- is taking Caché (CACH) to court for breach of contract, misappropriation of trade secrets, unfair competition, theft-conversion and breach of fiduciary and other legal duties. In other words, WH|BM is accusing two of its former employees of spilling the beans on upcoming designs to Caché. The question is: with so many women's retailers selling similar styles, why spend time and money defending a print or pleat when you could be drumming up new ideas and sourcing better materials?
WH|BM's specialty women's retail concept is simple: sell exclusively black and white garments (with the occasional pop of color). Little black dresses (LBDs) are therefore a store staple, but the brand's smartly been mixing things up over the last year. Consequently prints and stripes sold as briskly as solids, helping WH|BM to close the first quarter of 2010 with comps up 15.3 percent as opposed to last year's increase of only 4.2 percent.
This is in sharp contrast to Caché which posted losses in seven of the past nine quarters and shuttered more than 25 stores. In the suit, WH|BM says it knows of the losses and the pressure from investors to turn the retailer's balance sheet around. Rather than building on its own success and leaving the competition in the dust, WH|BM is turning ugly.
If Cache is proven guilty, WH|BM wants a recall of all garments in its spring and summer lines that were "directly or indirectly" derived from confidential, proprietary and/or trade secret information. WH|BM also wants its competitor stop designing, manufacturing, marketing, distributing and selling any garments in its fall line, or any line thereafter, derived from the alleged confidential information according to WWD.
But if you look at WH|BM's print assortment, it's clear the company has done a little appropriating of its own, taking inspiration from a number of iconic fashion sources. The "Abstract Print Dress" for instance, pays homage to Pucci while the "Saffron Flower Print Skirt" is reminiscent of an Hermes scarf. However you don't see those design houses knocking on Chico's door demanding compensation.
As for styles, in today's retail world of runway to rack in just a matter of weeks, it's very hard to prove who originated a silhouette. For example, WH|BM jumped on the maxi dress bandwagon much like Bebe (BEBE), Old Navy (GPS) and Victoria's Secret (LTD). Swap an animal print for a floral or tie-dye and who can tell where any of these dresses were purchased?
Though the plaintiff may have some leverage in court because its two former employees decamped for Cache after their tenure at WH|BM, if the company didn't do its due diligence by copyrighting each print and silhouette, it will be hard to get traction for the charge of "theft."
If WH|BM is smart it will settle this quickly and get back to the design drawing board. In fashion -- as in life -- it's sometimes wise to take the chestnut "imitation is the sincerest form of flattery," stick it in your back pocket, and reinvent yourself.
Image via White House | Black Market
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