Originally Posted by iammatt
The whole point is that if your marginal profit is high, what you need to do is simply sell more goods and attract more customers. That is why I do not understand this kind of action from EG. They are not going to lose customers because PLAL sells a few pairs online. If anything, they will attract more customers to their dealers who have been happy with purchases from PLAL.
This may or may not be true. One very important point that, interestingly, has not been mentioned in this thread, is that brands have different marketing strategies for different areas, and what may be perceived and marketed as a luxury brand in, say, North America, may not be so in, say, Europe, and vice versa.
One famous example is Levis, which is marketed as a high end brand throughout most of Europe. There was a rather notorious lawsuit against a rather famous retailer in the UK by Levis for importing made for the US market Levis into the UK market, and selling them for less. Levis USA has tried to position itself in the US as a high end brand, with mixed success. Similarly, brands like Converse and Pony, which are pretty ho-hum brands in the United States, command a much higher price, and prestige, in Europe. But once a brand name has been compromised, cachet is nearly impossibly to regain, even with Herculean efforts to do so. Calvin Klein had an acrimonious fight with Warnaco, which held the license to manufacture Calvin Klein underwear, and which distributed its product to discount stores like J.C. Penneys. Others on the board (namely, those working for CK) will have a much better knowledge of this than I do, but I believe that this lead to Calvin Klein being very difficult to sell. After that debacle, none of the luxury goods conglomerates wanted to touch it. It was tainted.
I feel the need to reiterate that I have no dog in this particular fight, nor do I understand the contractual agreement between PLAL and EG. If I had to wager, though, my money would be that PLAL has little cause against EG, and knows it.