Zara vs. Zara and Lily: A Lesson for Small Business Owners

This case is a great example of why small business owners should never decide on a name for their business without conducting a thorough trademark search through an attorney. Two years ago, an Australian based "mumpreneur", Shelley Tilbrook, decided to launch an online gift store called ZaraandLily.com, or Zara + Lily. Tilbrook came up with the trademark by combining the names of her daughter, Zara, and niece, Lily. Sweet, right?

Well apparently the major Spanish retailer Zara, Inc. didn't think so and their Australian lawyer sent the mumpreneur a cease and desist letter demanding that they cancel their business name and domain name, claiming it is "substantially similar or deceptively similar" to its client's. Like the United States, the trademark laws in Australia are all about preventing consumer confusion. And while Zara did not waste time in protecting their brand name, its PR team released the following statement to soften the legal ramifications:

"Zara Australia wants to underline its high respect for Ms. Tilbrook's initiative and has tried to demonstrate this throughout the process. We cannot forget that Zara originated from a small family business in apparel manufacturing and, as a result, the brand is empathetic to all entrepreneurs."

Nevertheless, Tilbrook still had to learn an expensive lesson. She was left with 50,000 dollars worth of merchandise that she could no longer sell and had to pay an additional 15,000 dollars in rebranding and web costs. For a small business owner, that is quite a hefty amount that she could have avoided paying had she hired an attorney to conduct a proper trademark search. Given that her business was online and had the potential of reaching millions of consumers across the world, her business name was even more susceptible to infringing on someone's trademark than, say, its brick and mortar counterpart. We hope Tilbrook sought the help of a trademark attorney for her new name- Peach and Pear Kids- and that the success of her business will continue despite this first legal hiccup. And to other small business owners out there trying to come up with a name or trademark, do your research and don't underestimate the degree to which big time corporations will go to protect their brand name. To check out the video clip of the news segment covering this case, click here.

Uniqlo Launches U.S. E-Commerce Site

If you haven't discovered Uniqlo, then you're missing out. But it's not entirely your fault given that the Japanese retailer only operates five stores in the U.S., four in the New York and one in San Francisco. I discovered Uniqlo when I was out in New York a couple years ago and realized what the buzz was all about. It's a fast-fashion retailer that gives you the chance to buy all those basic "filler" pieces at a great price, but without compromising on the quality (at least that's what my personal experience has been...cashmere sweaters at 80 dolllar price points? Yes please!).

The decision to launch an E-commerce site in the U.S. was a strategic move to help the Japanese retailer continue expanding in the U.S. and figure out where the bulk of their U.S. consumers reside. Through their online sales, the company can then determine where to build more brick-and-mortar stores. Their decision to open a store in San Francisco was also a strategic move, allowing the retailer to be close to Silicon Valley and the Bay area techies to help them launch their site. “Having a San Francisco store is a good opportunity to work with outside [tech] companies and experiment,” Shin Odake, CEO stated to WWD. “Hopefully, we can hire and find the talent. Global e-commerce is headquartered in Japan, but we’re open to moving the global headquarters to the U.S. We feel there’s more talent and more knowledge in the U.S. The fact that our San Francisco store is close to Silicon Valley was very attractive. We want to establish a relationship with the U.S. high-tech industry. We hope to learn from the U.S. market and make our Web experience better than it is today.” More talent and knowledge in the U.S. when it comes to E-commerce? Now that's something this Stanford alumna, former San Francisco resident, and all around fashion geek is proud to hear. To shop Uniqlo's new site, click here. 

Forever 21 In Hot Water With U.S. Department of Labor

It's possible that an entire blog can be dedicated to Forever 21's legal troubles. The Los Angeles based fast-fashion retailer has certainly given fashion lawyers plenty of material to analyze with their knock-off practices. Now it seams their labor practices are under scrutiny by the U.S. Department of Labor for allegedly working with suppliers that don’t pay workers minimum wage or overtime.

Apparently, the retailer has failed to comply with a subpoena issued by the Department for documents about its apparel contractors and manufacturers and now the government attorneys have filed an action with the U.S. District Court of Central California, which will allow a judge to hold a hearing on the matter. Forever 21's labor practices have been under scrutiny since 2008, after the department discovered that about a dozen manufacturers that work with the retailer have “sweatshop-like conditions.”

For a little labor law brush-up, the federal minimum wage is $7.25 an hour and employees that work more than 40 hours during a work week should receive overtime. The Department of Labor vehemently enforces these basic standards. "When companies like Forever 21 refuse to comply with subpoenas, they demonstrate a clear disregard for the law, and the Labor Department will use all enforcement tools available to recover workers' wages and hold employers accountable," stated the department's Ruben Rosalez to WWD. It will be interesting to see how far the case will go. In the meantime, you may want to think about hitting up other retailers to find good deals. Saving money should not be at the cost of good business practices. 

Maison Martin Margiela for H&M

Whenever any major designer decides to collaborate with H&M, there is always a major buzz going on within the fashion industry. From both a legal and business perspective, these collaborations have proven to be a smart branding strategy for high-end or lesser known designers who are trying to introduce their line to a wider audience.  In this instance, the fashion house is one of my personal favorites. Over the years, I have splurged quite a bit on Maison Martin Margiela itself and look forward to giving my wallet a rest with its affordable H&M line. However, because many don't take to the avant-garde aesthetic Margiela is known for, I admit I was curious to see how the brand was going to translate its particular high-fashion point of view to a fast-fashion mass audience. After reviewing the recently released images from the ad campaign, I am even more excited about getting my hands on the final product (specifically preying on the clear wedge boots, jackets, that awesome red dress, and the jewelry). Check out the beautiful line, which will be available in stores on November 15. 

Images Courtesy of Fashionologie

TFG Exclusive: Book of the Month

Okay, okay, so we're really late for October's book of the month. Work, family, and wedding planning have been keeping me pretty busy, but that won't stop me from sharing with our readers October's book of the month, Tom Ford. The coffee-table book is a complete catalogue of Ford's design work for both Gucci and Yves Saint Laurent from 1994 to 2004 and captures the brilliance of one of the masters in brand development.

It chronicles not only Ford's clothing and accessories designs for both houses, but also explores Ford's grand vision for the complete design of a brand, including architecture, store design, and advertising. Tom Ford features more than 200 photographs by Richard Avedon, Mario Testino, Steven Meisel, Helmut Newton, Herb Ritts, Terry Richardson, Craig McDean, Todd Eberle, and numerous other photographers. Many of the images were previously unpublished. The book was created in collaboration with Tom Ford himself and every page reflects his exceptional taste. I just purchased a copy last week and am truly obsessed with the visuals. If you are in the habit of collecting coffee-table books like me, Tom Ford is a must. To add this gem to your personal library, click here.