Luxury handbag retailer Cosette has vowed to rebuild after the business downsized dramatically during a 14-month investigation by NSW Fair Trading.
The luxury retailer fielded 1,079 complaints that it was allegedly selling fake bags, with a rigorous investigation by NSW Fair Trading eventually finding that all claims were unfounded.
Speaking with Ragtrader, Cosette director Don Grover confirmed the business had to shift back to its pureplay model, closing its only physical store in The Rocks, Sydney. He said the store closure came as the lease was up for renewal.
Alongside this, all Cosette staff took pay cuts as the business “almost lost its entire revenue” according to Grover, adding that the staff preferred to take pay cuts rather than being retrenched as “they're so passionate about the brand.”
All up, Grover said the downsizing amounted to about 60 per cent of the business.
Following the year-long headwinds, the Cosette director said the first step forward is working to remove posted reviews from the public across the internet that continue to claim their handbags from Cosette are fake.
Alongside this, Cosette has lifted its transparency online - revealing more information to its customers regarding how the luxury retailer sources its goods in a bid to shift the narrative of the last 14 months.
“We gave Fair Trading everything,” Grover said. “They know where every bag comes from. We can't, of course, put that out to market, and who would, right? But we can continually let our customers know where they come from. They're all European suppliers.”
Another key step is continuing to push sales, which Grover reports have started increasing in recent months, despite not being able to buy new stock over the last year.
“The good thing about what we sell is that most of it remains current,” Grover said. “This is very good product, and we store it very responsibly. So we've got the stock to sell.
“Sales are starting to increase now, slowly starting to increase. My advice to the team is it's going to take time; we can't afford to splash a lot of marketing dollars, but wherever we can, it's great to get the message out.
“Because, when you think about it, who else can actually say that everything they sell is legitimate? We're in a unique position now where our model, our business, and our product, have been validated by NSW Fair Trading.”
Grover added that new products are starting to arrive at its headquarters now.
He also said that Cosette will go back into the bricks-and-mortar space, but noted that the luxury business has primarily been an etailer.
“I mean, even when the store was there, 90 per cent of our sales were through the ecomm platform,” Grover said. “The fact is, it is good to have a multi-channel business.
“It's good that people can go and touch and feel the product and the service in the business. So having the store is a very positive thing to do.
“We'll just have to, you know, we'll dust ourselves off and, as best we can, start to rebuild the business.”
As a final point, Grover said the result of the investigation also highlighted the inaccuracy of third-party authenticators.
In an official statement shared in October, NSW Fair Trading noted that luxury brands had confirmed the authenticity of Cosette handbags that multiple online authenticators had advised customers were fake.
"The investigation highlights that there are significant issues with the accuracy and reliability of online authenticators, who use AI and algorithms to provide authentications. Consumers should be aware of the limitations of using some online authenticators,” Fair Trading noted.
Grover said there needs to be regulations or guardrails to keep the authenticator market in check.