PORT LOUIS, Mauritius — A visitor to the Indian Ocean island of Mauritius could very well think she had died and gone to Ralph Lauren-outlet heaven.
This story first appeared in the April 10, 2003 issue of WWD. Subscribe Today.
The tiny island — at 1,150 square miles, it’s not much bigger than Rhode Island — has a population of 1.6 million and its beaches attract about 600,000 mostly European tourists per year. Tourists who leave the beach for even a moment are almost guaranteed to spot an “Original” Ralph Lauren factory outlet store — there’s no less than 500 of them on the island.
If that astounding number of stores isn’t enough to peddle the well-known brand name, clothing with the Ralph Lauren and Polo names also shows up in the tote bags of beach hawkers — so that even the most indolent sunbathers are pretty much guaranteed to have a shot at buying a souvenir from their vacations with the Ralph name on it.
One could easily think Mauritius would be the Polo Ralph Lauren Corp.’s favorite market. Except for one small detail: Every single piece of Ralph Lauren clothing manufactured and sold in Mauritius is fake. Yet the trade is legal — at least in the eyes of the Mauritian government.
The Ralph Lauren saga began in Mauritius in 1992, when Aurdally Bros. & Co. registered the Ralph Lauren trademark with the unsuspecting local Customs authorities. Aurdally Bros. was one of the first companies to set up garment-manufacturing facilities on the island, primarily for the domestic market. Garment manufacturing is now a key source of foreign exchange for Mauritius, which exported $254.7 million worth of apparel to the U.S. last year.
Strangely, after registering the trademark, Aurdally Bros. didn’t do anything with it, and the brand remained dormant for six years.
In December 1998, a group of businessmen set up a company called Captain Tasman and approached Aurdally Bros. to buy the license to produce Ralph Lauren products. For the first year, Captain Tasman paid Aurdally a licensing fee of $67,000, and began manufacturing T-shirts, polos and oxford shirts bearing the label Ralph Lauren, complete with the polo-player logo.
(All dollar figures have been converted from the Mauritian rupee at current exchange rates.)
“I built up the brand from scratch in Mauritius,” declared Ajay Beegoo, managing director of Captain Tasman. “Initially, I had five shops selling Ralph Lauren products. Our production and distribution was carefully controlled; our quality was excellent. Soon, we expanded to 12 shops, and we were subcontracting to a few other selected factories.”
One manufacturer, who requested anonymity, said, “It was a lucrative setup for both Captain Tasman and Aurdally Brothers. The owner of the trademark got his licensing fee up front every year, and Captain Tasman in turn sold distribution rights to various outlets for [about $1,600] a year. So everyone was happy.”
Everyone, that is, but the real Polo Ralph Lauren.
A trademark license in Mauritius is valid for seven years, at which time it may be renewed. When 1999 rolled around, the Ministry of Trade and Industry refused to renew the license, citing a request lodged in 1998 by the New York-based creator of the brand.
Polo Ralph Lauren had asked the Mauritian government to expunge the trademark, which it considered to be illegitimate, unauthorized and improperly managed.
Aurdally Bros. and Captain Tasman filed an appeal against the government’s decision. In 2000, the Ministry announced that it would review the case.
The case is still under review, and many garment manufacturers have decided to jump into the game while the government mulls what to do. In some cases, they’re not even paying royalties to Aurdally Bros.
“It became a free-for-all situation,” explained Marcel Lapierre, a Mauritian entrepreneur who recently set up Fakebusters, a company that specializes in policing and safeguarding intellectual property. “Everybody decided they wanted a piece of the action.”
While the scale of the Ralph Lauren counterfeiting industry here is enormous, it is by no means the only well-known brand illegally reproduced. Replay, Diesel, RipCurl, Versace, cK Calvin Klein and Kenzo have also been knocked off or traded illegally.
“This is a hugely profitable industry,” said Lapierre. “It easily brings in between [$33 million to $67 million to the Mauritian companies selling products with the Polo label] a year, at least.”
Beegoo, of Captain Tasman, agreed the situation has gotten out of hand.
“I, myself, have practically stopped manufacturing Ralph Lauren products,” he said. “I now produce for and sell to only eight shops. This situation is downgrading the brand.”
Despite his shaky claim to the brand name, Beegoo contended he has been a responsible steward of the image.
“I saw an opportunity to do business, and I grabbed it,” he said. “I really protected the brand and looked after it.”
He said that he stepped in to stop manufacturers who had begun to export the bogus Lauren goods.
“I’ve taken legal action against several manufacturers and retailers. In some cases, I was successful in closing down certain shops, even putting some factories out of business,” Beegoo said. “These people were killing the market and bringing it down…What outraged me the most was that the public thought it was still Captain Tasman manufacturing all these poor-quality items. My name was being ruined.”
In 1998, a Ralph Lauren pique cotton polo shirt cost about $30 on the island. Recently, an itinerant beach hawker, who proudly flashed his government “Authorized Dealer” permit, offered to sell a comparable shirt for $8.50.
John Price, U.S. Ambassador to Mauritius, said he has had to dissuade several visitors from purchasing the bogus Polo products — which even caught the eye of some attendees of January’s African Growth & Opportunity Act trade forum held on the island.
“We have to tell people ‘don’t go — it’s not the real product,’” he said. “The fact is, these outlets are not selling authorized products.”
A Polo Ralph Lauren USA spokeswoman said: “We do not have a manufacturing or retail presence on the island of Mauritius — every piece of Polo Ralph Lauren merchandise produced and sold there is counterfeit. Once we learned of the counterfeit industry in Mauritius, we initiated legal proceedings to protect the integrity of our brand, and to help ensure that our customers don’t unknowingly purchase counterfeit Polo Ralph Lauren merchandise.”
There was a time, almost a decade ago, when Mauritius’ then-developing apparel industry did legally make some Polo Ralph Lauren garments. Leisure Garments, a division of Hong Kong-based conglomerate Esquel, filled real orders in the early Nineties, according to Richard Chin, managing director.
Beegoo, of Captain Tasman, said he would like nothing more than to go legitimate.
“Ralph Lauren cannot stop what’s going on in Mauritius,” he asserted. “This case will drag on in the courts for years. So, wouldn’t it be better to make a deal with Ralph Lauren?”
While acknowledging that “it’s easy to say that Customs should have known Ralph Lauren was an international brand,” Danielle Wong, director of the Mauritius Export Processing Zone Association, contended that “being an international brand, it is quite surprising that Ralph Lauren never bothered to register their trademark here.”
Ambassador Price said he believes the Mauritians want to resolve this issue, partly to avoid having a black eye on the branding front at a time when the nation is trying to further solidify its place as a trading gateway to Africa.
He said the current free-for-all situation shouldn’t be allowed to drag on for too long. The parties involved, he said, “should get on with it and adjudicate, or work out an agreement and make a deal. It can’t be left in limbo indefinitely.”
For its part, the Mauritian government has taken steps to address the issue of counterfeit production and trademark protection in general.
Josee Neta, industrial property office controller and acting controller of trademark, said, “There is a commitment on the part of the Government of Mauritius to create an investment-friendly environment in the country and to transform its economy into a modern and dynamic one.”
Strict new laws on intellectual property took effect in January. They were not retroactive.
Neta said the former laws were “limited to patents and trademarks and did not achieve the level of protection nor enforcement required.” The new laws contain clear enforcement procedures and provide for heavy penalties such as steep fines and imprisonment, which, she said, “will act as a deterrent to the importation and sale of counterfeit goods.”
Another key feature of the new laws is that well-known trademarks are protected, whether they are registered in Mauritius or not.
Neta said she believes these laws will help prevent further incidents of foreign trademarks being improperly registered.
Ambassador Price said he believes the new laws are a step in the right direction, but that it will take time to resolve the situation.
“This is not some small-room-in-the-back-of-the-house outfit,” he said. “This is a syndicate, a well-run operation with muscle.”
Neta declined to comment about the Ralph Lauren case, saying that it is “of a very complex nature and has not been resolved by the court.”
Price noted the U.S. Embassy in Mauritius has successfully intervened to stop the pirating of other U.S. brands. Last year, he said, Oakley approached the embassy with suspicions that some of its products that were made in South Africa were being illegally sold in Mauritius.
Oakley hired Fakebusters, which together with the U.S. Embassy, began to investigate and police the situation.
Their combined efforts resulted in a “successful clean-up operation,” according to Fakebusters’ Lapierre.
Price added that the Oakley cleanup had an extra bonus for Mauritius. He said Oakley was so impressed with the infrastructure of the local manufacturing industry that “they are sending a team to look at the island to set up here, to start a legitimate operation here.”
Until the government brings an end to its reign, Captain Tasman continues to lead the strong trade in bogus Ralph Lauren products. Beegoo claimed that he’s not really hurting Polo Ralph Lauren.
“Look at the plus side,” he claimed. “We’re actually doing free advertising for Ralph Lauren…I’ve built up the brand for them indirectly. Does it really matter if it’s fake? After all, image is everything, isn’t it?”