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.”
Breaking News: @louisvuitton's men's artistic director @mrkimjones is leaving the French fashion house after nearly 7 years. Jones joined Louis Vuitton in 2011, following a three year tenure as creative director of British luxury goods brand Alfred Dunhill. Jones is to exit Louis Vuitton after showing his fall 2018 collection for the brand in Paris on Thursday. Read the full exclusive story on WWD.com. Link in bio. #wwdnews #wwdfashion
For men’s fall 2018, @giuseppezanotti drew on elements from streetwear, sport, biker, combat and rock ‘n’ roll. Pictured here are a pair of shoes from the collection, featuring zippers, rhinestones, and silver hardware. Head to WWD.com to see a roundup of the accessories from Milan’s men’s fall 2018 shows. #wwdfashion (📷: Andrea Delb)
To celebrate the 25th anniversary of @ralphlauren’s snowboarding collection, the brand is mining its archives. The iconic brand is reintroducing vintage styles and dropping new designs for a color capsule that will be available in Ralph Lauren stores and @openingceremony on January 25. The capsule will consist of 10 pieces, including the Snow Beach Pullover, pictured here, which is a collector’s item that rapper Raekwon wore in Wu-Tang Clan’s “Can It Be All So Simple” video. #wwdfashion (📷: Tom Gould)
For @rochasofficial’s pre-fall 2018 collection, creative director Alessandro Dell’Acqua channeled the sophisticated and intriguing Catherine Denevue in the film “Belle de Jour.” Polished collarless coats, midi skirts, suits and ’60s graphic motifs were all featured in the collection, adding a sense of discreet luxury. See the rest of the photos on WWD.com #wwdfashion
“We tried to produce clothing of that couture quality, but the most daunting part was that we only had a matter of days [to do it],” said costume designer Lou Eyrich, who recreated Gianni Versace’s iconic looks for @americancrimestoryfx. Eyrich searched online retailers and vintage shops for original pieces from the design house and for @penelopecruzoficial, who plays Donatella Versace. Head to WWD.com to read how she created the Versace world. #wwdfashion
Only three months after her stellar debut catwalk season, @kaiagerber has inked her first big design collaboration –– with @karllagerfeld. The collection blends Lagerfeld’s Parisian chic aesthetic and the model’s signature West Coast casual style via RTW, accessories, footwear and more. The #KarlLagerfeldxKaia collection will launch in September with a series of events. Get all the details on WWD.com. #wwdnews #wwdfashion
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews