Fakes tend to do that. Look what it did to Coach.
I am not sure I agree with you guys. Hermès, Chanel, Louis Vuitton, and other premier brands are equally (if not much more) counterfeited. But they have been able to manage their brand image more effectively than MK.I have 3 MK bags and those are from retail. In LA area it's very popular brand but in my personal opinion I haven't seen innovation or something that caught my eyes. In addition the market is saturate of fake MK that's what killed/burned the brand.
MK is not a failing company by any means and, as many pointed out, the brand is still quite popular. But they are challenges ahead, especially as some legacy MK customers trade their 'aspirational luxury' bags for more expensive designer brands.