On 30 May 2000 put Calvin Klein Inc. (CKI) lawsuit against Warnaco Group, Inc. and Linda Wachner, CEO, for the violation of its jeanswear licensing and distribution agreement and in doing so, diluting the equity of its brand. On 26 June, 2000, Warnaco countered with its own suit, denying the allegations of major brand dilution and distribution justified by warehouse clubs as acceptable business practice. The counterclaim further alleged that CKI had, in fact, violated the license and erod … Read more »

On 30 May 2000 put Calvin Klein Inc. (CKI) lawsuit against Warnaco Group, Inc. and Linda Wachner, CEO, for the violation of its jeanswear licensing and distribution agreement and in doing so, diluting the equity of its brand. On 26 June, 2000, Warnaco countered with its own suit, denying the allegations of major brand dilution and distribution justified by warehouse clubs as acceptable business practice. The counterclaim further alleged that CKI had, in fact, violated the license and eroded the brand through their own policies and practices. The lawsuits were precedent setting: This was the first time a licensed manufacturer / distributor was responsible with brand equity dilution or a designer charged for ineffective brand advertising. It was a case that would possibly rewrite the rules of fashion licensing, and distribution, and to bring into the spotlight the tensions faced by attempts to compensate for any brand steward revenue growth objectives with the maintenance of equity of the brand. This case provides extensive background information.
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from
Susan Fournier,
Jessica Boer
Source: Harvard Business School
28 pages.
Publication Date: Nov 19, 2002. Prod #: 503011-PDF-ENG
Calvin Klein, Inc. vs. Warnaco Group, Inc. HBR case solution

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