Fraud in a handbag

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Fraud in a handbag

Posted On : Apr-03-2010 | seen (2864) times | Article Word Count : 1115 |

Fake accessories devalue top brands and cost design houses billions in lost profits. But could you tell a Kate Spade bag from a sweatshop copy?

DO YOU know when a Louis Vuitton bag is not a Louis Vuitton bag? Are you sure you could tell the difference?
If you know exactly what to look for, phoney goods will reveal their slipshod roots. The devil is in the detail: a fake Louis Vuitton Pochette will be typically a half-inch too small, with a just-too-dark leather trim and a poorly fitted, cheap zip. But maybe you don’t care enough to look that closely.
Fakes are becoming increasingly realistic and distribution methods more sophisticated, allowing the fakers to operate faster and sell cheaper. New designs hit shady backrooms in the same week that they hit Bond Street and Madison Avenue, and some illicit establishments even keep luxury houses’ catalogues under the counter, enabling a customer to point to the bag of their choice.
The market in counterfeits — sold openly on pavements or in dodgy shops — is raging, from Oxford Street to Ventimiglia on the Italian/French border, to New York’s Canal Street.
How much is the fake accessory business worth? Definitive figures are impossible to calculate, but according to the Global Anti-Counterfeiting Group, fashion companies suffer the largest loss of revenue to counterfeiting of all industries, losing £727 million a year in the UK, the equivalent of 3.2 per cent of annual revenue.
The International Anti-Counterfeiting Coalition, a watchdog group based in Washington, says that clothes and accessories accounted for the biggest seizure of counterfeit goods last year: the total value of fashion fakes amounted to 36 per cent of the retail value of the real thing. Nancy Kratzer, assistant director for fraud investigations at the US Customs Office, concedes that only a fraction — less than 5 per cent — of the fakes produced are seized by the authorities each year.
Barbara Kolsun, the senior vice-president and general counsel for Kate Spade, the New York handbag designer, claims that for every authentic Kate Spade bag sold, a fake is sold too. “With an annual profit of $70 million (£44 million), that’s a huge potential loss to the company,” she says. Typically, fakes are sold for about 10 per cent of the real version’s price.
Clearly demand has been fuelled by the infatuation with logos of the past 15 years, enraging those companies whose brands are “devalued” by the fakers. LVMH, for instance, is suing two South Korean merchants over alleged “trademark infringements” — distributing LVMH-brand counterfeit bags and leather goods. As part of its effort to fight fakes, LVMH recently attended a trade show in Seoul, hosted by South Korean Customs, to help customers to tell fake goods from real ones.
In theory, the genuine article should be distinguished from its sham cousin by its accessories, including a proper dustbag in which to store it, and a certificate of authenticity. But for $80 on Canal Street you can find a copy of Stephen Sprouse’s iconic graffiti-splattered Louis Vuitton duffel bag (a bag that, half-deliberately, looked like a fake to begin with), accompanied by a logoed dustbag and provenance papers.
In fact, the Sprouse bag is no longer available at Louis Vuitton stores, so now the only way to get one is to purchase such a fake — or deface a pristine Vuitton yourself.
Last year on Canal Street, New York’s miracle mile of ersatz designer fashion between West Broadway and Lafayette Street, the NYPD uncovered a maze of secret tunnels, trapdoors and fake walls to find $125 million worth of counterfeit watches and handbags.
At the same time, Ken Bensinger, a reporter for The Wall Street Journal, conducted an experiment in which he asked fashionable women if they could tell top-flight faux from real. They failed, dismally.
“When we asked a group to try to figure out which was which, they couldn’t,” says Bensinger. “But when we told a second group that the pieces were all fakes, they said ‘oh, you can tell from 40ft away’. I asked why they thought so, and they mentioned features that they said were blatantly bad — such as Louis Vuitton piping being the wrong colour — but which were in fact spot-on.”
How do you know if you have the real thing? Some companies hire professional fake-spotters, either salespeople at luxury houses or others who work behind the scenes authenticating, archiving and appraising. Some are dealers in vintage goods, steeped in the history of fashion fraud, and they know their stuff. Spade’s remedy was to employ Kolsun, the former chairwoman of the International Anti-Counterfeiting Coalition. “Counterfeiting means lost revenue for the city as well as a loss to the company,” she says. “We pay income tax, we pay company tax — the fakers don’t. It’s a federal crime and a New York state crime to sell and distribute counterfeit goods.
“The problem is that consumers aren’t aware. It’s a supply and demand problem — like drugs. As long as consumers think that it’s not a big deal, they’ll buy them.”
At the King’s Arms resale shop in Chelsea, New York, Jamie Brown is a connoisseur of Hermes, Chanel, Gucci and Fendi. He prides himself on being able to turn a bag inside out to scrutinise the workmanship and ferret out the subtle mistakes that fakers make. But he doesn’t like to give customers bad news.
“We don’t want to burst any bubbles,” he says with a laugh. “I never say anything. Most of the ladies I sell to wouldn’t buy a fake. The ones, who know, know, and the ones who don’t — well, you let them go on with their dream.”
The vintage craze has exacerbated the problem. “More and more people are using the idea of vintage to counterfeit items,” says Phillippe Dugeny, the anti-counterfeiting manager for Vuitton. And, he adds, eBay is heaven for people hocking fakes: “It’s so easy to lie on the internet.”
Cynics might say that anyone knocking off a luxury item is doing a public service in the tradition of Robin Hood. But, says Kolsun, counterfeiters often have ties to organised crime, and most fakes are produced in sweatshops.
“If you buy a fake bag, you are buying into all kinds of things,” she says. “You are directly supporting terrorism, among other things. The money is going to sources that you don’t want it to go to, and you have to ask yourself whether you want your money to help these people.”
The truth is, you get what you pay for — and the only surefire way to make sure your Vuitton bag is real is . . . to buy it at Vuitton

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<h1> Fraud in a handbag</h1> Author: <a href='http://www.articleseen.com/profile_zinsser.aspx'>zinsser</a> DO YOU know when a Louis Vuitton bag is not a Louis Vuitton bag? Are you sure you could tell the difference? 
If you know exactly what to look for, phoney goods will reveal their slipshod roots. The devil is in the detail: a fake Louis Vuitton Pochette will be typically a half-inch too small, with a just-too-dark leather trim and a poorly fitted, cheap zip. But maybe you don’t care enough to look that closely. 
Fakes are becoming increasingly realistic and distribution methods more sophisticated, allowing the fakers to operate faster and sell cheaper. New designs hit shady backrooms in the same week that they hit Bond Street and Madison Avenue, and some illicit establishments even keep luxury houses’ catalogues under the counter, enabling a customer to point to the bag of their choice. 
The market in counterfeits — sold openly on pavements or in dodgy shops — is raging, from Oxford Street to Ventimiglia on the Italian/French border, to New York’s Canal Street. 
How much is the fake accessory business worth? Definitive figures are impossible to calculate, but according to the Global Anti-Counterfeiting Group, fashion companies suffer the largest loss of revenue to counterfeiting of all industries, losing £727 million a year in the UK, the equivalent of 3.2 per cent of annual revenue. 
The International Anti-Counterfeiting Coalition, a watchdog group based in Washington, says that clothes and accessories accounted for the biggest seizure of counterfeit goods last year: the total value of fashion fakes amounted to 36 per cent of the retail value of the real thing. Nancy Kratzer, assistant director for fraud investigations at the US Customs Office, concedes that only a fraction — less than 5 per cent — of the fakes produced are seized by the authorities each year. 
Barbara Kolsun, the senior vice-president and general counsel for Kate Spade, the New York handbag designer, claims that for every authentic Kate Spade bag sold, a fake is sold too. “With an annual profit of $70 million (£44 million), that’s a huge potential loss to the company,” she says. Typically, fakes are sold for about 10 per cent of the real version’s price. 
Clearly demand has been fuelled by the infatuation with logos of the past 15 years, enraging those companies whose brands are “devalued” by the fakers. LVMH, for instance, is suing two South Korean merchants over alleged “trademark infringements” — distributing LVMH-brand counterfeit bags and leather goods. As part of its effort to fight fakes, LVMH recently attended a trade show in Seoul, hosted by South Korean Customs, to help customers to tell fake goods from real ones. 
In theory, the genuine article should be distinguished from its sham cousin by its accessories, including a proper dustbag in which to store it, and a certificate of authenticity. But for $80 on Canal Street you can find a copy of Stephen Sprouse’s iconic graffiti-splattered Louis Vuitton duffel bag (a bag that, half-deliberately, looked like a fake to begin with), accompanied by a logoed dustbag and provenance papers. 
In fact, the Sprouse bag is no longer available at Louis Vuitton stores, so now the only way to get one is to purchase such a fake — or deface a pristine Vuitton yourself. 
Last year on Canal Street, New York’s miracle mile of ersatz designer fashion between West Broadway and Lafayette Street, the NYPD uncovered a maze of secret tunnels, trapdoors and fake walls to find $125 million worth of counterfeit watches and handbags. 
At the same time, Ken Bensinger, a reporter for The Wall Street Journal, conducted an experiment in which he asked fashionable women if they could tell top-flight faux from real. They failed, dismally. 
“When we asked a group to try to figure out which was which, they couldn’t,” says Bensinger. “But when we told a second group that the pieces were all fakes, they said ‘oh, you can tell from 40ft away’. I asked why they thought so, and they mentioned features that they said were blatantly bad — such as Louis Vuitton piping being the wrong colour — but which were in fact spot-on.” 
How do you know if you have the real thing? Some companies hire professional fake-spotters, either salespeople at luxury houses or others who work behind the scenes authenticating, archiving and appraising. Some are dealers in vintage goods, steeped in the history of fashion fraud, and they know their stuff. Spade’s remedy was to employ Kolsun, the former chairwoman of the International Anti-Counterfeiting Coalition. “Counterfeiting means lost revenue for the city as well as a loss to the company,” she says. “We pay income tax, we pay company tax — the fakers don’t. It’s a federal crime and a New York state crime to sell and distribute counterfeit goods. 
“The problem is that consumers aren’t aware. It’s a supply and demand problem — like drugs. As long as consumers think that it’s not a big deal, they’ll buy them.” 
At the King’s Arms resale shop in Chelsea, New York, Jamie Brown is a connoisseur of Hermes, Chanel, Gucci and Fendi. He prides himself on being able to turn a bag inside out to scrutinise the workmanship and ferret out the subtle mistakes that fakers make. But he doesn’t like to give customers bad news. 
“We don’t want to burst any bubbles,” he says with a laugh. “I never say anything. Most of the ladies I sell to wouldn’t buy a fake. The ones, who know, know, and the ones who don’t — well, you let them go on with their dream.” 
The vintage craze has exacerbated the problem. “More and more people are using the idea of vintage to counterfeit items,” says Phillippe Dugeny, the anti-counterfeiting manager for Vuitton. And, he adds, eBay is heaven for people hocking fakes: “It’s so easy to lie on the internet.” 
Cynics might say that anyone knocking off a luxury item is doing a public service in the tradition of Robin Hood. But, says Kolsun, counterfeiters often have ties to organised crime, and most fakes are produced in sweatshops. 
“If you buy a fake bag, you are buying into all kinds of things,” she says. “You are directly supporting terrorism, among other things. The money is going to sources that you don’t want it to go to, and you have to ask yourself whether you want your money to help these people.” 
The truth is, you get what you pay for — and the only surefire way to make sure your Vuitton bag is real is . . . to buy it at Vuitton

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