When one of the handles of Karineh Gurjian-Angelo's Yves Saint Laurent bag broke, she took the tote to a YSL boutique to have it fixed. Instead of repairing it, the sales associate told her it was fake.
He pointed out all the subtle ways he could tell it wasn't authentic, including the bag's improper lining and lack of embossing on the bottom. She was mortified.
"I felt like I was back in school in the principal's office," said Ms. Gurjian-Angelo, a New York photographer who often shoots accessories and is familiar with high-end handbags.
She had been thrilled to get the shiny black YSL bag on eBay for $300. The low price made her suspect it might be fake, but when it arrived with price tags that looked authentic, she said she thought, "Wow, it is real."
Ms. Gurjian-Angelo fell victim to a new generation of counterfeit fashion goods, offering much more convincing facsimiles of actual products. They are a far cry from cheap knockoffs, with "Prado" or "Cucci" logos sold out of trash bags on street corners to consumers who know they're buying fakes. The goods are made of high-quality materials, with zippers and grommets boasting the brand name, and are stamped with what appears to be the proper manufacturing location and date. They're fooling even savvy shoppers, especially online.
Vendors selling fake merchandise can easily set up legitimate-looking ecommerce sites, with full product descriptions as well as marketing images and logos that look like those on websites selling authentic goods. They also buy keyword advertisements on search engines to lure in bargain-hunting shoppers, said Frederick Felman, chief marketing officer at MarkMonitor, a firm that helps companies protect their brands.
The prices of the imitators are rising, confusing customers who are looking for the real deal at a discounted price. Still, the higher-priced fakes are just a fraction of what a real item would cost. YSL's authentic version of Ms. Gurjian-Angelo's bag sells for more than $1,500.
The second-hand marketplace is often where counterfeiters sell fakes to unsuspecting customers.
Ebay says it combats fakes aggressively, in part through a program which gives brands or other intellectual property rights owners special tools to report listings. When brands flag a listing as inauthentic, it is removed within hours, the company said. EBay also independently scans its millions of listings for fake products.
In a statement, eBay's Dan Dougherty, associate general counsel, intellectual property, said, "In the rare cases when a counterfeit item appears on the site, buyers are covered for eligible purchases through our Buyer Protection programs." The programs enable buyers to return an item if it wasn't what the seller promised. (Ms. Gurjian-Angelo didn't take action regarding her bag.)
Some manufacturers are fighting back by embedding hidden security devices into products and scouring the Web to attempt to stop unauthorized sites selling their products.
The International Chamber of Commerce estimates that the value of counterfeit and pirated products worldwide is about $600 billion, and projects that figure to double by 2015. Last year, U.S. agents conducted nearly 20,000 seizures of goods that infringed on intellectual property rights, an increase of 34% from 2010, according to a report from U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement. In 2001, there were about 3,600 seizures.
Footwear was the top commodity seized, the government agencies said. Clothes and handbags ranked third and fourth, respectively.
Before buying what she thought was a vintage Chanel bag at a local consignment store, Vickie Laliotis, a student and fashion blogger, eyed it carefully. The hardware bore the company's name and the front closure featured the brand's signature interlocking Cs. Ms. Laliotis even sniffed the quilted scarlet tote to see if it smelled like real leather.
Convinced it was real, Ms. Laliotis paid more than $100 to buy the purse.
"I figured, well, why would they make a fake out of such nice leather?" said the 27-year-old, who lives in Victoria, British Columbia.
Later, Ms. Laliotis deduced from the lining and other markings that her purchase was a fake. She tucked it away in her closet. "I couldn't wear it. I just feel like a fraud," she said.
A new quilted Chanel handbag would cost several thousand dollars.
"Fighting counterfeit goods is a major concern," a spokeswoman for Chanel said in a statement, adding that the brand dedicates "considerable financial and human resources" to pursue producers of fake goods. The company said that "some counterfeit leather goods do look a lot like the real thing." The only way to ensure a bag is actual Chanel, the company said, is to purchase it directly from Chanel or its authorized retailers.
More than 60% of counterfeit goods seized by U.S. agents last year came from China, which has a sizeable pool of highly skilled labor and is increasingly the source of legitimate luxury goods manufacturing. Seizures from China rose 18%, in part the result of higher mail activity.
Online sales of counterfeit goods make fighting back a much more complex task than it used to be, says Tom Onda, chief intellectual property counsel at Levi Strauss & Co. Instead of scouring flea markets and raiding retailers, "trying to monitor the Internet is a Herculean task," he said.
The jeans maker has a team of 40 employees worldwide who, among other things, keep tabs on unauthorized sites selling its product. When a cease and desist letter doesn't suffice, the company works with the Internet service provider to take down the site, Levi's said. It also may file civil action. But successfully taking down a site doesn't mean removing the product from the marketplace, Mr. Onda said. Often merchants just set up a new domain name.
To fight back, more brands are turning to authentication devices into their merchandise. Levi's is researching a new type of labeling technology to help its own anti-counterfeiting teams identify its products as authentic. Mr. Onda declined to provide specifics. High-end denim brandTrue Religion Apparel Inc. puts a security device into each pair of its jeans, said Deborah Greaves, security and general counsel. Mr. Onda and Ms. Greaves declined to give specifics citing concerns that details would undermine their security efforts.
Applied DNA Sciences, based in Stony Brook, N.Y., has a new technology that embeds botanical DNA into fibers that can then be sewn into a garment. The DNA is detectable under a specific light and can be assigned to a specific brand. It can't be copied. The company's clients include two European luxury brands, which it declined to name.
At Chanel, the company tracks each part of a bag's production process using a unique number, sort of like a vehicle identification number on a new car, which is then printed on a card that comes with the bag, a spokeswoman said. For consumers, the devices are only helpful if they take the product somewhere for verification, such as an official boutique.
Elizabeth Bernstein works for Portero, an online second-hand luxury-goods retailer. She investigates vendors who sell handbags and leather goods on the site. Portero guarantees authenticity or a full refund.
Hardware on a luxury product should have the appropriate markings, texture and weight, Ms. Bernstein said. Metal pieces shouldn't feel like plastic or sound like tin when they clink together. Zippers should close effortlessly, without resistance or snagging. Toggles and locks should also turn easily.
Most luxury products are hand-stitched—one reason behind the high price tag. Fakes are often created with machines. The human element adds a level of imperfection that won't be found on most fakes, she said.
Ms. Bernstein is constantly tracking the knockoffs' improvements. Recently, a Louis Vuitton bag had the proper stamp of the year, week and location from which the bag was produced. "They're making better and better fakes every day," Ms. Bernstein said. LVMH Moet Hennessy Louis Vuitton SA, had no comment. - WSJ
Written by: Elizabeth Holmes