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JFTC closes LVMH anti-competitive investigation says Coach

Sep '05
Modern classic American accessories marketer Coach Inc explained the Japanese Fair Trade Commission (JFTC) has ended its investigation regarding LVMH Moet Hennessy Louis Vuitton's (LVMH) harassing and anti-competitive practices in Japan without taking any action.

Coach filed the complaint in Tokyo in March describing a pattern of conduct going back over the previous year, in which LVMH engaged in inappropriate and threatening behavior by exerting pressure on common business partners. At the time, Coach noted that while they had not suffered any material damages, even the suggestion of anti-competitive behavior required decisive action.

Lew Frankfort, Chairman and Chief Executive Officer of Coach Inc said, "They believe the filing with the JFTC and the subsequent investigation served primary goal, which was to send a strong message that they will not tolerate any actions that limit consumer choice."

While LVMH attempted to pressure Coach's retail partners in Japan, JFTC representatives apparently determined that the department stores used their independent judgment regarding all sales space and were not influenced by LVMH's harassing behavior. Mr. Frankfort added, "This finding is surprising because it contradicts what department stores repeatedly reported to Coach executives prior to the filing of the complaint."

Coach continues to experience excellent growth in Japan as it has during the last several years, expanding with both its retail partners and in stand-alone shops. "They are hopeful that the increased scrutiny brought to bear by the filing of this complaint - which appears to have resulted in an abatement of LVMH's interference with the department store partners - will continue in the future and contribute to the promotion of fair competition in the Japanese market," Mr, Frankfort concluded.

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