Target's US quest to find how it was sold a pup

It's as far away from the glittering and lush make-up counters of a cosmopolitan retailer as you can get. A grim and barren highway an hour's drive from Fort Worth, Texas, where pick-up trucks and petrol tankers motor pass an isolated Delux Inn motel and a Cross Roads Bible Church.

Somewhere along this bleak highway, not far from Sean's Mesquite Pit BBQ, is the global headquarters of Mudd Puppy Cosmetics, a tiny outfit with a simple website that does a roaring trade in MAC make-up, and whose hands Australian retailer Target ultimately placed its reputation and trust in when it purchased goods that are now being described by MAC's parent company as counterfeit.

US court documents obtained by BusinessDay reveal that Target, owned by Perth-based conglomerate Wesfarmers, is pursuing Mudd Puppy Cosmetics and its sole owner Marcy Dickerson through the American courts to discover where she obtained her MAC cosmetics range from.

Mudd Puppy, based just outside Decatur, Texas, 70 kilometres from Dallas, is the last place you would expect a retailer the size of Target to source its cosmetics but this is exactly where the trail runs dry for the national retailer. It speaks volumes about the risks of parallel importing from the grey market.

Target followed the supply line to an obscure wholesaler called 'Get Your MAC On', based in the nearby state of Arizona, and after suing it in court discovered that it got its questionable make-up from Mudd Puppy.

When BusinessDay called Mudd Puppy owner Ms Dickerson last week she was shocked at the court case against her but stated she stood by the authenticity of her MAC supply. Asked where she got her stock from, Ms Dickerson hung up.

Her website, which has partially been removed, advertises Mudd Puppy's ability to source MAC at wholesale prices for its retail customers.

"We are a wholesale company specialising in name brands that are acquired from overstock," it reads.

Another page, also unavailable to view, has a series of Q&As that include the headline, "Are your cosmetics authentic?" and "Why do some boxes show shelfwear or have a crushed corner?"

What Target will discover if it obtains access to a host of Mudd Puppy internal documents, letters, notes, emails and invoices could either sink or save its reputation and the trust of its customers.

In September last year, Target was forced to strip its store shelves of MAC - Australia's biggest-selling prestige cosmetics range - after MAC owner, Estee Lauder, claimed the make-up was fake.

Estee Lauder launched its own lawsuit against Target, which is still crawling its way through the Australian courts.

The case is being quietly cheered on by department stores Myer and David Jones, who have the exclusive right to sell MAC in Australia and were not impressed with Target advertising and selling its MAC range at up to a 40 per cent discount.

Target has launched its own investigation to uncover where its supply of MAC was sourced, as part of its own defence, worryingly revealing that it cannot be sure who the eventual manufacturer was for the alleged counterfeit make-up.

"Target has been accused of trademark infringement in the Australian litigation with Target's sale of certain cosmetics," lawyers for Target state in civil action against Mudd Puppy filed with the US District Court in Fort Worth.

"Target's accusers allege that the cosmetics in question are not genuine. Being able to establish the authenticity of those cosmetics is crucial to Target's defence."

Target tracked down the MAC make-up from the Australian importer to the wholesaler in Arizona, and then to Mudd Puppy.

"Mudd Puppy is an upstream supplier of the allegedly infringing cosmetics. Efforts to obtain documents from Mudd Puppy through informal means prior to the filing ... were unsuccessful."

A spokeswoman for Target confirmed its legal detective work in the US as it solved the riddle of the dodgy make-up. The retailer, which recently installed its third chief executive in two years, said the Australian supplier it bought the MAC product from assured Target they were genuine.

"As part of our investigations into the source of supply to our Australian supplier we've identified US-based company Mudd Puppy and have taken legal action in the USA seeking that the company reveal their source of supply," she said. "This action is also still in progress and it would be inappropriate for us to comment further."

Ultimately, Target's reputation could be saved or buried somewhere along the lonely 1209 Texas highway. The fact that make-up is placed on the body, and often partially ingested by its users, raises a series of problems for Target if the cosmetics are eventually proved fake.

The wild goose chase - here and in the US - is continuing.