Last week I read that Forever 21 was being sued for copyright infringement by small eco-friendly independent label, Feral Childe, and that the indie was separately suing Forever 21’s supplier, a factory outside Los Angeles that supplied the product. On the surface, this sounded like another supplier gone wild story, with Forever 21’s CEO quoted as saying, “[Forever 21’s] policy is to trust their suppliers not to break the law, rather than checking everything that they sell. ” And so I thought this story was going to tie back to our 2010 benchmark, Getting it Right the First Time, Designing and Delivering Merchandise that Sells. In that benchmark retailers reported an increase in collaborative design with trusted suppliers and a lack of governance around the quality of the product produced.

Further research and following all the links have led me to a very different story.

It turns out that Forever 21 has been sued for copyright-infringement dozens of times by more than 40 different designers. All cases have been quietly settled out of court. This time may well be different. For one thing, Feral Childe is a sympathetic victim – the brand is eco-conscious and one that the industry itself would like to promote. The reasons always come back to cost – it costs money to be eco-conscious, which depresses margins right out of the gate. Making a low-cost non-eco-friendly knock-off is cheaper, and in the world of fast fashion, the product can come and go before the original designer gets any of its investment back.

So what we have here is a bird of a whole different color – the CEO is claiming ignorance, and the lawsuit presumes it’s really just plausible deniability and suing the whole food chain just to be sure. Designer Eliza Starbuck has started an on-line petition at change.org to bring the whole issue into the view of consumers. As of this writing, only 3,966 people have signed the petition, but it has only just gotten started.

So what are we to make of this? The fashion industry has been all about knock-offs for as long as I can remember. In the old days, the process went something like this:

Year 1: A trend hits the runways,

Year 2: Similar product becomes available at high-end ready-to-wear clothiers,

Year 3: Similar looks become available at mass market outlets.

But Fast Fashion changes all the rules. We’re all familiar with the story of vendors in China making the official version of a product in one factory and making the non-official version in another factory right nearby. This is different. The fabric was quite literally reverse-engineered in the Los Angeles area.

This compresses the cycle to:

Week 1: New designer brings interesting fashion to market,

Week 6: Fast-fashion retailer brings low-priced knock-off to market.

The difference is not subtle. In the old model, everyone got some time to make money on the product. In the new model, all R&D is done by the high end innovator, and most of the profits reaped by the fast-fashion, low-priced retailer.

This brings us to not just a question of governance. It’s a question of ethics. Technology has enabled the Fast Fashion process and the supply chain that drives it. But is it right? Does Do Won “Don ” Chang, CEO of Forever 21 have any ethical responsibility here? Clearly Forever 21’s customers, mostly teenagers, are voting with their wallets. They’re fine with it. Eliza Starbuck hopes to change customers’ thought process, but in an era when cash is a scarce commodity, she may have a hard time changing minds.

Do we have some kind of moral imperative here? We don’t have a xenophobic issue at play – the whole thing played out in the same country – the US. But it somehow seems wrong to me. What do you think? I’d love to hear your thoughts. Please drop me a line.