Briefing: November 11, 2022
StockX garnered attention on social media this week after making some changes to the marketing of its authentication efforts. In a statement on Thurs., the Detroit-based resale platform revealed that it has “updated the name of [its] verification process” – moving away from labeling the goods on its platform as “Verified Authentic” and “100% Authentic” to a new “StockX Verified” label. The company says that “StockX Verified is our own designation and not endorsed by any brands sold on StockX.” (It also assured consumers that nothing in the actual authentication/verification process has changed.)
The name-change is interesting for at least a couple of reasons …
- First, it comes as StockX is embroiled in an NFT-centric lawsuit with Nike, with the Swoosh accusing it of TM infringement and counterfeiting, as well as false advertising, among other things, and asserting in an amended complaint in May that by peddling products as “100% Verified Authentic,” StockX is looking to trade on the reputation and appeal of the Nike brand. That labeling is also an issue, per Nike, as “StockX has been and is currently dealing in counterfeit Nike goods, which renders [its] ‘100% Verified Authentic’ claims false and/or misleading.”
- The move away from “100% authentic” is also notable, as it is not the first time a reseller has made such a shift. The RealReal notably dropped references to the pre-owned products on its site as being “100% Authentic.” TRR’s shift in language followed from CNBC reports in 2019 that centered on counterfeit goods offered up by the reseller and from the still-ongoing lawsuit waged against it by Chanel a year prior, in which Chanel accused TRR of selling counterfeit goods and engaging in “improper business practices” by “represent[ing] to consumers that it ‘ensure[s] that every item on TRR is 100% the real thing.’”
The Bottom Line: The evolving language seems to be a nod to the still-potentially-rocky relationship between resale entities and brands, particularly as the secondary market continues to grow in value and as an increasing number brands begin to launch resale ventures of their own.
On the litigaton front: Beauty brands Dew Beauty and Tula Life are sparring over the “CLAYDATE” trademark. (That complaint is here.)
The week in earnings (and takeaways): The RealReal reported results for Q3 ending on Sept. 30, with revenue rising 20% to $143M and net losses falling to $47.3M from $57.2M in Q3 2021. CFO and Co-interim CEO Robert Julian pointed to “strong demand” in Q3 for “RTW, handbags, men’s & branded fine jewelry.”
In recent deal-making news: Gap is off-loading its Greater China arm – namely, Gap Shanghai Commercial and Gap Taiwan Ltd – to its operating partner in the region in an all-cash transaction worth $40M. Baozun Inc. will also obtain the exclusive rights “to manufacture, market, distribute and sell” Gap products in Greater China for a 20-year term.