Burlington Coat Factory Pays $10 Million To Fendi Over Memory Lapse

In the 1980s, discount retailer Burlington Coat Factory — where all the cool kids got their two-toned jeans when I was in middle school — got snagged selling faux Fendi bags. As part of its settlement with the Italian luxury brand, the Factory agreed to never sell anything with the Fendi name again without the label’s permission. Unfortunately, someone forgot about that agreement and now Burlington has to pony up $10 million to Fendi.

For 15 years, Burlington Coat Factory observed the injunction. And then in 2002 products with the Fendi name started popping up again. In a costly case of memory lapse, the retailer’s lawyer, who had been involved in the original suit, only thought to make sure that the products being sold were authentic.

“The simple truth is that I had long forgotten them by 2002,” said the attorney about the details of the settlement.

And so the Factory continued to sell Fendi wares until 2006, when the label got wise and took them to court for violating the injunction. The court agreed in 2007 and ordered the retailer to pay $4.7 million.

And then yesterday, the court slapped on an additional $5.7 million for damages, attorneys’ fees, and costs for willful counterfeiting.

For its part, the Factory says it did nothing wrong and settled the matter just to be done with it:

Burlington Coat Factory agreed to settle the matter with Fendi so that current management will not have to spend time in appeals on matters that happened under prior management, many years ago.

Burlington Coat Factory will pay $10 million to settle counterfeit-goods fight with Fendi [Philadelphia Inquirer]

Comments

Edit Your Comment

  1. ShruggingGalt says:

    Ouch.

  2. Raekwon says:

    I hope their lawyer gave them a discount on his fees for this.

  3. apd09 says:

    be careful when you go there because you should know that some people think it’s cool to throw buckets of fake blood on you as you are walking out of Burlington Coat Factory.

  4. pecan 3.14159265 says:

    I propose a headline change: Factory Fences with Fendi and Fails; is Fined Financially

    • LoadStar says:

      Fantastic!

    • nbs2 says:

      Well done.

      I understand the $4.7m for violation of the injunction, but I’m not getting the part of the $5.7m that towards the willful counterfeiting – it sounds like they made sure to only sell authentic products.

      • pecan 3.14159265 says:

        Well, BCF was fined the $4.7 million becuase it violated the injunction. It was fined the additional money because the injunction had been in place since the 1980s and I think the court reasoned that BCF should have already known and had made it a practice at that point to not stock any Fendi items. In 2002, when the Fendi items were in stock, there was apparently no attempt to ensure they were authentic and as far as I can tell, BCF made no attempt to prove to Fendi the bags were authentic. It just accepted the fine to get past the matter. This makes me think that the bags were counterfeit.

        • nbs2 says:

          From what I can tell, the article suggests that the attorney was pretty adamant that the buyer make sure that the bags were authentic and makes no indication that Fendi asserted that the new bags were counterfeit.

          If Fendi didn’t make the assertion, I’m not sure why that portion of the penalty came into being. The rest of it (costs, etc) I understand. Even if Fendi did make the assertion, without any evidence I see no reason for the judge to have assessed it.

          • nylawyer says:

            The $4.7 was for contempt of court. The $5.7 was for treble damages for willful counterfeiting. nbs2 the point is that they sold counterfeits not genuine product. When the Factory says they made sure to sell only real product they are, ahem, spinning.

    • yulingo says:

      +1!

  5. john says:

    Haven’t been in a Burlington in decades. Unfortunately, Burlington’s in my neck of the woods are only in the ghetto. So I have always assumed they were marketing to lower income neighborhoods.

  6. drjayphd says:

    Forgot about the settlement? Was this attorney on WWE’s legal team?

  7. sopmodm14 says:

    all those designers price their items so high, that when better bootlegs come out, they put them to ligitation….b/c they don’t make profit from sales, just winning those legal cases (lol, but true)_

  8. initforthelulz says:

    Haha, I used to work at BCF and I remember seeing those bags around. I never knew about the lawsuit though, and I can’t really say I’m surpirsed.

    After a few years and some luck I was promoted to the corporate office working for one of the VPs. I knew most of the buyers, including the one responsible for Accessories. Again, I’m not surprised this happened.

    Now employees’ won’t even have their $.50 raise to look forward too. Burlington was already hurting enough and they just kicked themselves while they were down. Glad I got out when I did.