The Knockoff Economy (9 page)

Yet the Ghesquiere affair suggests that norms against copying among the fashion elite are not especially powerful. According to the
New York Times,
Ghesquiere not only spoke candidly about the matter; he also didn’t seem embarrassed. “I’m very flattered that people are looking at my sources of inspiration,” he said, comparing what he did to the practice of sampling in the
music industry. “This is how I work. I’ve always said I’m looking at vintage clothes.” He didn’t think the incident would hurt his reputation. “No, I’m known for many things,” he said.
⁶⁷

Moreover, the
Times
suggested, Ghesquiere was not alone in his optimism that the incident would produce no lasting harm. “Although Julie Gilhart, the fashion director of Barneys New York, expressed astonishment when she saw how similar the two garments were, she said: ‘I don’t think this diminishes Balenciaga’s creativity at all. How many people have copied Yves Saint Laurent? My question is always: Who can do it better? We’re all savvy enough to know what’s been borrowed and what hasn’t.’”
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Ghesquiere is just one designer, albeit a well-known one, and so we cannot rest much on this particular vignette. But a look around at the fashion press suggests that he is hardly alone in either his actions or his views. Marc Jacobs has been widely accused of being derivative of the work of John Galliano, Chanel, Martin Margiela, and others. (Jacobs himself offered an interesting defense to this charge: “I’m attentive to what’s going on…. I have never insisted on my own creativity, as Chanel would say.”).
⁶⁹
In 2008, the design team of Proenza Schouler was criticized for riffing too much on Ghesquiere’s work at Balenciaga. Earlier, Calvin Klein was said to rip off Helmut Lang and Giorgio Armani. And so on. Top designers are not infrequently accused of lifting from their rivals. The accusations don’t appear to deter them, nor are the copyists held to account by their peers in any way that we can detect.
^*

Interestingly, some designers even see parallels with chefs, whom they perceive as largely reinterpreting the work of others rather than copying. Christian LaCroix opined that “a designer has to at least put his or her own twist on a look.” “Inspiration is not enough,” he said. “You have to bring your own strength, energy and imagination to push further. It’s like cooking. When you cook directly from a book, you just copy a recipe. When you adapt it, adding this spice or that ingredient with your own fantasy or intuition, you make the dish your own creation.”
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It is inherently difficult to assess the power of social norms, but responses like these make it hard to believe that they play a substantial role in restraining copying—at least aside from point-by-point copying—among leading designers. And of course the sheer fact of extensive and often open copying
is very hard to explain if the norms against copying are strong. For these reasons, we doubt that social norms explain all that much about how fashion designers remain so creative in the face of extensive copying.

Perhaps fashion designers remain innovative in the face of wide-scale imitation because the benefits that accrue to the “first mover” are large enough to sustain innovation.
⁷¹
If a clothing designer can sell enough units before copies begin to flood the market, the return may be sufficient, on average, to make continued innovation profitable.

We think that first-mover advantage does have some effect in fashion. But there is little evidence that it is the center of the story; rather, first-mover advantage appears to add to the incentives that the piracy paradox already provides. What do we mean? If first-mover advantage was the best explanation for the fashion industry’s ability to create in the face of copying, designers would need to have an appreciable time gap before copyists moved in—in other words, a gap, perhaps only a couple of months, during which they could sell versions of their designs before copyists got to it. As we noted earlier, however, copying in the industry is very fast. It is often claimed that today copyists are as quick, or maybe even quicker, to market than originators. If true, this casts doubt on the power of first-mover advantage to make a difference in the fortunes of designers, since the copy might come out right after the original—or might even be first to market.

Let’s dig a little deeper. There is no good study of the speed of copying, and so it is hard to know the exact length of any first-mover advantage that might exist. Still, it seems plausible, given changes in technology, that copyists are faster today than they were the past. At least, this view is widely held. It is often given as a reason that, whatever the failures of Maurice Rentner in the 1940s to convince Congress to amend American copyright laws to protect fashion, such an amendment is necessary
now.

Yet there is good reason to be skeptical that copying is much quicker now than it was in the past. Indeed, for a very long time the copying of fashion designs has been easy and fast. Well before Al Gore invented the Internet, ordinary photos combined with a fax machine allowed copyists to begin work within hours of photographing or sketching the original. Even before that, transcontinental air travel allowed designs to be copied in a matter of
days, and for designs produced domestically, less than a day.
Time
magazine wrote in 1936 that “by the early Depression years [copying] had gone so far that no exclusive model was sure to remain exclusive 24 hours; a dress exhibited in the morning at $60 would be duplicated at $25 before sunset and at lower prices later in the week.”
⁷²

So very fast copying is actually many decades old. And people have been predicting doom from fast copying for just as long. Back in 1940, a
Harvard Business Review
article about design piracy noted that fashion producers have, “within the past 50 years,” been complaining “that modern, high-speed methods of communication” have made copying much quicker and therefore more harmful to originators.
⁷³
If the industry moved that fast during the 1930s and 1940s, the speed of copying has hardly changed meaningfully in the decades since. In fact, even the claim that copyists are beating originators to market, which sounds like an artifact of our whiz-bang Internet-meets-Globalization 21st century world, is old news. Close observers of the industry were sounding the alarm about this alleged peril when Herbert Hoover was just starting his run for the presidency.
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In short, claims about the impact of fast copying sound grave and new but have been around a very long time. Fast copying is old hat. And in the intervening (many) decades, the American fashion industry has grown enormously successful. The bottom line is that there doesn’t seem to have ever been a golden age of first-mover advantage, in which designers could reap the benefits of originality before copyists swooped in. Given that, it is hard to believe that first-mover advantage explains why copying doesn’t kill creativity in fashion.

Nor, by the way, is there much evidence that fast copying causes serious harm to the fashion industry overall. If fast copying is a really serious problem, it is hard to explain the industry’s commitment to its runway schedule. A lot of new fashion designs debut in the major spring and fall shows in New York, Paris, Milan, and London. The “spring” shows are actually held the preceding fall. And the “fall” shows the preceding spring. If first-mover advantages were crucial, and rapid copying deadly, we would not expect to see such a significant lag between the runway and retail. The industry would rely more on secrecy and speed to protect first-mover advantage. That the major players do not suggests that first-mover advantage is not the mainspring of innovation incentives for the industry as a whole.

Still, first-mover advantage probably does play some role in the creative success of the apparel industry. But it is more important to
consumers
than to producers. What do we mean?

It may be easy to copy a design quickly, but that doesn’t mean the public is going to
buy
quickly. There is a lag as consumers figure out what they like and what is trendy that season. The lag that exists between debut and diffusion allows early adopters to differentiate themselves from the crowd. Fashionistas adopt a new design, and then, in a few cases, it begins to spread. The freedom to copy a design that is becoming hot helps to create a trend and, ultimately, expand the market for that design. For this process to unfold, however, the design must become hot in the first place. And as a practical matter, styles become hot over time, not instantly (and of course most remain very cold). In short, some lag between creation and
widespread
copying almost always exists, and this lag is an essential element of the piracy paradox. But that is not the same as saying the reason fashion designers stay creative in the face of copying is because they have a meaningful first-mover advantage.

In sum, the trick to being a successful fashion copyist isn’t just copying. It’s copying
winners.
And that almost always requires waiting.

The paradoxical effects of piracy in fashion have an interesting implication. If free and legal copying propels the fashion cycle forward ever faster, leading to more rapid turnover in styles and more sales, why do individual designers leave the copying to others? In other words, shouldn’t designers knock off
their own
designs? The more designs diffuse, after all, the quicker they die—and hence the quicker new designs can debut.

Indeed, some have provocatively suggested that smart firms ought to give away cheaper, visibly inferior versions of their products.
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We are not aware of anyone who gives away bad versions of their clothes. And there is a good reason. Brand protection—the desire by trademark owners to maintain the exclusivity of their very valuable high-end marks—stops this from occurring in the real world. But we do see a careful version of self-knockoffs: what insiders call “diffusion” or bridge lines.

Diffusion lines are clothes by a famous designer that sell at lower price points under a distinctive but related label. A good example is Marc by Marc
Jacobs—clearly identifiable as something designed (supposedly) by Marc Jacobs, but not the same as the top end Marc Jacobs. To be sure, using a well-respected trademark at multiple price points runs the risk of diluting the value of that mark. While some fashion insiders stress the danger of these lines blurring a brand’s identity and tarnishing a mark—and cite the story of Halston, whose fall from grace and fortune was dramatic after he tried marketing clothes under his name to the masses at JC Penney—many well-known design houses have a second or even third line that is lower priced. One way to understand the phenomenon is precisely as a strategy to knock off one’s own signature designs, so that consumers who can’t afford the real thing can at least get a piece of it—and that desirable label.

A very prominent user of this strategy is Giorgio Armani, which has up to five distinct lines, depending on how one counts. Most fashion firms, however, do not go this deeply into the diffusion world. Why the Armani approach is not more common is an interesting question. But it is clear that at least some degree of self-copying occurs throughout the industry.

We suspect the reason true self-knockoffs—in which the same basic design is offered at different prices—are rare revolves around the great power of trademarks. Tarnishing a brand is perilous, as Halston and Pierre Cardin taught the fashion world. Moreover, different labels even within the same house—Armani Exchange, Armani white label, and so forth—have different identities, and it is dangerous to blur them. Customers at the high end will not appreciate it; it is one thing to see a favored designer’s work knocked off by Forever 21, and another for the designer to do it herself. Given this, fashion firms are wisely cautious. It is usually better to have someone else do the copying.

Let us return to where we began. Fashion is a huge industry in which imitation is everywhere—and completely legal. The fashion world ought to be in an economic freefall, since our conventional view of innovation tells us that widespread copying destroys creativity and kills markets. Yet the apparel industry is not just surviving—it is thriving. Extensive and legal copying accelerates the fashion cycle, banishing once-desired designs to the dustbin of apparel history (perhaps later to be dusted off and reintroduced) and sending the fashion-conscious off in search of the new, new thing. And copying allows trends, the cornerstone of contemporary fashion, to develop and spread. The result is an American fashion industry that is dynamic, innovative, successful, and full of copying.

In the spring of 2007 a chef named Ed McFarland opened a restaurant on Lafayette Street in downtown Manhattan called Ed’s Lobster Bar. For years McFarland had been the sous-chef at the very successful Pearl Oyster Bar on Cornelia Street in Greenwich Village. Pearl Oyster Bar was a small place, but it was well known and always packed. The chef and owner, Rebecca Charles, had built an avid following based on a simple formula: a short list of excellent seafood, elegant but spare New England coastal décor, a signature Caesar salad with English muffin croutons, and plenty of oyster crackers on the tables.

Eventually Ed McFarland sought to strike out on his own, and when he did, he took with him a lot of ideas drawn from his years working at the Pearl Oyster Bar. At least, so claimed Rebecca Charles. Shortly after Ed’s Lobster Bar opened less than a mile from Pearl, an angry Charles filed suit in the federal court in lower Manhattan. In her suit she claimed that McFarland had “pirated Pearl’s entire menu; copied all aspects of Pearl’s presentation of its dishes; [and] duplicated Pearl’s readily identifiable décor.”
¹
According to Charles, Ed’s Lobster Bar was “a total plagiarism” of her well-known restaurant. Perhaps most galling to Charles was the Caesar salad. When she taught
McFarland how to make her signature Caesar salad, she told him “you will never make this anywhere else.”
²
Ed’s Lobster Bar menu nonetheless featured a Caesar salad somewhat tauntingly dubbed “Ed’s Caesar.”