How much is that baggie in the window? The one with the quilted flap? The problem, as Chanel sees it, is that it’s not “full price.”
This week saw the start of a trial between the luxury goods giant and the luxury resale platform What Goes Around Comes Around (WGACA), the culmination of a years-long federal lawsuit that kicked off in 2018. It seeks to answer questions about whether budget-conscious fashion fans can trust the small industry of companies selling pre-loved purses to be selling them authentic goods.
A real-good price?
This isn’t just a trial about selling an old blouse or wallet you’re ready to part ways with. At issue is what happens when a business gets built around selling a whole bunch of old blouses and wallets. When it happens at scale—websites, storefronts, etc.—the reseller begins to look like a competitor for Chanel instead of a way for Chanel customers to make a little extra money. Because to someone walking down Wooster Street in New York’s Soho neighborhood, they can either 1) go to Chanel and pay $9,600 for a small classic bag or 2) cross the street and pay $6,500 for a similar model at WGACA.
The tricky part is that the WGACA proposition relies on the bags being real, which justifies a price that’s less than a new Chanel but more than a counterfeit one that might cost a couple hundred dollars. There are other benefits to the secondhand market, such as shrinking the environmental strain of producing new fashion goods. But a lot of people are drawn to the potential for savings. And so WGACA tells customers that it researches not just the from-the-brand bags for clues that its products are authentic (which have become sophisticated enough to include serial numbers and QR codes), but also fake bags.
“We conduct an extremely detailed research about the counterfeit market and collect data on exactly how they are made to compare to authentic pieces,” a page on the WGACA website reads. “Our Authenticators are trained on exactly what details to look for that indicate an item may be counterfeit.” In its suit, Chanel has alleged that those practices aren’t air-tight, and fake bags are getting through anyway. WGACA has long denied that.
Anthony Lupo, chairman of the law firm ArentFox Schiff, which often works with fashion brands, says that ensuring the purchase of the real thing for a less-than-the-real-thing price are both the heart of the secondhand market and also its thorniest issue.
“This is a real question for places that are resellers,” Lupo says. “Can you trust the authentication practices that go on? Is this a real problem, or is this just one or two things that slip through? You’re not going by 60% of the value of a real purse for a fake purse.”
Different approaches to fashion resale
A few companies have taken the same tack towards the secondhand market, though not all.
💍 Tiffany sued eBay in 2004 over jewelry that the auction website sold. That suit was dismissed because eBay wasn’t guaranteeing that every piece of sterling was real. (Though eBay does have a robust authentication business now.)
👟 Nike sued the sneaker resale website StockX last year, alleging that its authenticators weren’t stopping enough bootleg limited-edition kicks from hitting its site. That suit is still ongoing.
👜 In 2020, Gucci teamed up with resale platform The RealReal (which Chanel also sued in 2018—that suit is currently stayed pending mediation) to help strengthen and even supply some of the bags it resells.