PARIS — Hermès International said the French national police dismantled an international crime ring that produced counterfeit versions of several of its bags with the help of the luxury house’s employees.
“This operation concludes a one-year investigation following an Hermès complaint based on clues and abnormal behavior identified through the house’s internal monitoring systems,” the company said.
Two Hermès employees have been dismissed as a result of the probe, but the company believes that several current members of staff could also be involved. The bags were sold through a parallel distribution network in Europe, the U.S. and Asia, it added.
A dozen people are believed to have been arrested in the bust on Thursday, during which police discovered clandestine workshops filled with precious leather skins. The Paris public prosecutor was said to have estimated the value of sales by one branch of the ring alone at 18 million euros, or $22 million at current exchange.
“Hermès is very satisfied with the efficient and diligent collaboration established with the national gendarmerie in this case and reiterates its relentless commitment to fighting counterfeiting,” the company added. “This action puts an end to the fraudulent project in progress.”
Counterfeiting costs France 6 billion euros, or $7.5 billion at current exchange, in lost revenue every year, according to the French National Anti-Counterfeiting Committee, or CNAC. French luxury goods association Comité Colbert recently unveiled a new campaign against counterfeiting that uses tongue-in-cheek slogans to raise awareness of the issue among travelers in airports.
Famed for its Birkin bags and silk scarves, Hermès has stepped up its public statements against counterfeiting in recent weeks.
In an interview with WWD last month, Hermès chief executive officer Patrick Thomas called for Internet service providers, search engines and social media sites to be held accountable for providing their services to companies selling fakes. “Eighty percent of objects sold on the Internet under the Hermès name are fakes. It’s an absolute disgrace,” he said.
A U.S. court recently ordered 34 Web sites peddling counterfeit Hermès products to pay the company damages of $100 million. Asked by a shareholder at the company’s annual general meeting on May 29 how long it would take to receive the payment, Thomas replied: “Eternity.”
Even with the difficulty of recouping damages, brands have pressed on in the battle against Internet counterfeiting since it has become the primary focus of illegal activity. In May, Deckers Outdoor Corp., the maker of Ugg boots, was granted a $686 million judgment in a Northern Illinois court against 3,007 China-based counterfeit Web sites selling fake Uggs.
In the same month, Burberry scored a $100 million judgment in Manhattan federal court against a network of Chinese cybersquatters, who used a variety of domain names to sell fake Burberry goods. Judges in the Hermès, Burberry and Deckers cases in the U.S. all ordered third-party sites and payment processors such as PayPal Inc. to pay the brands any cash held over from pending transactions. Part of the reasoning behind this decision is that it is extremely difficult to track down Web operators located overseas, and thus hard to obtain monies from them.
Even with that remedy, brands aren’t likely to collect anything close to the full judgments they are being promised by the courts.
“I think what the courts are finding in all of these cases is that the defendants are acting in complete disregard of the law,” said Joseph Gioconda, the lawyer who won the $100 million judgments for both Hermès and Burberry.
Gioconda, who is representing Michael Kors Holdings Ltd. in a similar kind of cybersquatting case in Manhattan federal court, noted that the more brands fight against Internet counterfeiters, the more courts will adapt new strategies to help combat these criminals.
“These cases have made the courts more aware of the plight of counterfeiters,” he said. “At the very least, it’s made courts quicker to act.”
There'll be no rest for those headed to Europe for men's, as Paris just closed the gap with Milan. According to a provisional calendar released by the Chambre Syndicale, Paris Men's Week will now open a day earlier on January 16. See new highlights on the official lineup on WWD.com. #wwdnews #wwdfashion (📷: @kukukuba)
BREAKING: Jonathan Saunders is leaving @DVF. The designer has resigned from his position as chief creative officer of Diane von Furstenberg, the company said in a statement on Friday. At the time of his hire, von Furstenberg said Saunders’ arrival symbolized and facilitated her stepping back from the day-to-day duties that occupy the work of a full-time creative director. The British designer joined DVF in May 2016 and was in charge of all product categories. #wwdnews
For @versace_official’s spring ad campaign, the brand emphasized the archival prints from the spring tribute collection dedicated to the late Gianni Versace. Closing out the show were five of Gianni’s favorite models: Cindy, Naomi, Carla, Helena, and Claudia. Bowing on December 18, the new campaign is yet another tribute to supermodel-dom as the images by Steven Meisel are fronted by @iamnaomicampbell, @cturlington, @gisele and more. #wwdfashion
Four-time Oscar-nominated actress Annette Bening has been waiting 20 years to play Gloria Graham in "Film Stars Don't Die in Liverpool," which will be released on December 29. The movie about Graham – a Hollywood star known for her controversial relationship with a younger Englishman named Peter Turner – is based off a memoir Turned wrote. "She felt vulnerable to him, because she loved him, she really did love him. And anyone that we really truly are in love with, we re vulnerable to in a very deep way," said Bening. Read our full interview with the modern icon of an actress on WWD.com. #wwdeye (📷: @ninebagatelles; Styled by @cristinaehrlich)
The crisp white button down: a staple that can be dressed up or down and accessorized throughout the decades. Here, on a Art Basel-goer in 2017 on the left and on the iconic Audrey Hepburn in “Roman Holiday” in 1953 on the right. #tbt #wwdfashion (📷: Andrew Morales)
Known for her work with @victoriassecret, 25-year-old model @georgiafowler is raising her profile in Hollywood. Fowler stars in @vincecamuto’s holiday campaign, which launched in partnership with “Pitch Perfect 3.” “Almost every shoot with Vince Camuto, I’ve had to face a fear…It was definitely a challenge. I’m so grateful for it, though. I’ve always wanted to be a pop star, so that was the perfect chance,” Fowler said. Head to WWD.com to read about Fowler’s experience modeling, including at the #VSFashionShow, and her relationship with Nick Jonas. #wwdeye (📷: @jilliansollazzo)
EXCLUSIVE: Huda Kattan just became the first beauty influencer to land a major beauty deal. Kattan's business, @hudabeauty, has received a minority investment from private equity firm TSG Consumer Partners. The brand, which industry sources say is on track to do $200 million in retail sales for 2017, will receive support on product, retail and geographic expansion through the deal. Get all the details on the deal and read @_a_collins' interview with Kattan on WWD.com. Link in bio. (📷: @jgreenery) #wwdbeauty #wwdnews
Peruvian model @juanaburga_official – who is known for walking the runways of @rodarte, @viviennewestwood and @torybuch – is making the move to the big screen with drama “Los Últimos.” The film premiered in Argentina in November and arrives in the U.S. and Europe in 2018. On making the switch from modeling to acting, Burga told WWD: “It’s a completely different thing – a lot of people think it’s similar or try to connect things, especially like getting used to the camera or being looked at all the time or playing these different characrers, but film is a completely different story.” #wwdeye (📷: @jgreenery)
London’s newly opened @designmuseum will look back on the life and work of Azzedine Alaïa in a show that the designer helped to curate before he died of heart failure last month. The retrospective, which Alaïa had worked on with Mark Wilson, chief curator of the @groningermuseum, will look at the impact of his work worldwide. The show, “Azzedine Alaïa: The Couturier,” will run from May 10 to October 7. Read more about the exhibit on WWD.com #wwdnews #wwdfashion (📷: @zefashioninsider)