Customer or Competitor?

Merchandising Underwear

Lorynn Divita

Business Case
Source: Bloomsbury Fashion Business Cases
DOI: 10.5040/9781474208765.0015
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Knight Underwear is a well-established underwear company with excellent brand recognition, based in the United States. Knight has a strong relationship with PrimeKo, a global discount retailer that stocks their products. However, competition for retail space and presence within PrimeKo stores is high as the retailer also stocks their own private-label underwear brand in addition to a key competitor. Knight has a new line planned for the Christmas period. PrimeKo’s underwear buyer expresses interest in the line during a meeting with Knight’s merchandising manager, and while she does not commit to placing an order, she keeps hold of a sample set and indicates that she will order in the future. However, just weeks after the meeting, Knight discovers that PrimeKo has released a very similar line under their private-label brand, eight months before Knight’s is due to launch. Primeko’s version is of lesser quality but the design is very similar and it is cheaper, which gives it a competitive edge over Knight’s product. Knight must now decide how best to react. How should Knight respond to the retailer in the face of a potential case of design theft and the subsequent diminution of sales for their key product of the year?

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