NEW YORK — Those Canal Street counterfeiters have taken their designer label copying know-how to new heights. Near dead-on versions of the Louis Vuitton Takashi Murakami bags for spring are being sold by vendors on Canal and Tuesday afternoon shoppers were clamoring for the knock-offs.
This story first appeared in the April 24, 2003 issue of WWD. Subscribe Today.
Women were squeezed inside the narrow stalls scrutinizing the shape, the color and the craftmanship detail of the hardware. The bags, which have a white background with multicolored logos, are being sold in about a dozen select stalls downtown in a range of styles from the diminutive “Pochette” to larger duffels. Vendors are asking anywhere from $75 for the smaller bags to $200 for the larger ones, but the final price depends on one’s haggling skills — and even the time of day. The authentic Murakami Vuittons range from $360 for the “Mini HL” to $3,950 for the “Eye Dare You.”
Once shoppers eyed the bags, which were set out on tables on the sidewalk or featured in the front of some stores, a furor ensued. Women were on their cell phones maniacally calling friends, while others were inspecting the bags in a proprietary fashion. By mid-afternoon the more popular styles like the small duffel shape with a front buckled pocket, called “Speedy,” were sold out. Vendors said they would have replenished stock the following day and urged shoppers to come early offering a better “morning price.”
The copy quality varies from vendor to vendor, yet there are several key details which give away that they are fakes. The colors are several shades off, with the cheaper copies skewing towards neon. The studs on the bags aren’t as refined as on the originals, the zippers buckle a bit, and the LV logo is cut into, which is never the case with authentic Vuitton bags.
The Murakami styles are a hot commodity on the black market not only because of the popularity of the whimsical designs, but also due to the lengthy waiting lists for them, which have been ballooning since last fall. In fact, the bags don’t even hit the sales floor because once they’re delivered they’re doled out to those customers who were on the waiting list, numbering in the thousands. They also are being sold on eBay, with 523 listings on the site on Wednesday.
But while imitation may be the sincerest form of flattery to some, luxury brand execs aren’t pleased. Counterfeiting is big business. Customs & Border Protection, which is now part of the U.S. Department of Homeland Security, made 5,793 seizures of counterfeit goods, valued at $99 million, in fiscal year 2002. Counterfeit handbags, wallets and backpacks accounted for $2.9 million of that sum.
“There are always certain lines which are extremely exciting like the Murakami, and those lines are mostly affected whenever they hit our stores and are shown to the press,” said Claus Lahrs, president of Louis Vuitton North America. “[Counterfeits] are a serious business, and we are one of the luxury brands pursuing a lot of different activities in countries where those products are sold and produced. We work together with the Custom authorities…we train and educate Customs employees so that they can alert us, and make sure those counterfeits don’t leave the country they are originally produced in.
“We have special agents and lawyers working for us in the entire world trying to get a hold of the source of the production of Louis Vuitton counterfeits. And we work together with the New York police,” he continued. In fact, police were arresting several Canal Street vendors earlier this week and taking them away in vans.
The most common place for counterfeit Vuitton bags to be sold is on the street, Lahrs said, adding that counterfeit sales on the internet are on the rise.
“We currently have 301 stores around the world,” Lahrs said. “Due to the fact that we control our store network entirely, we can reassure our customers that the original Louis Vuitton product is only sold in our own stores. If you want to be sure, go visit a Louis Vuitton store.”
Meanwhile, European luxury analysts say they’re not greatly alarmed by the proliferation of Vuitton knockoffs. In fact, Lehman Bros. in London considers counterfeiting, along with certain profit and margin expectations, one of the chief hallmarks of a luxury product.
“If you’re not counterfeited, you’re not aspirational,” said Lehman’s luxury analyst Andrew Gowen. “It’s a very good indicator of brand health. By and large, people who buy counterfeits are not real customers anyway, or they are future customers.”
Gowen said if someone buys a counterfeit watch or handbag unaware, it could be damaging to a brand image, especially if the quality is poor. “But let’s face it, most people who buy counterfeit know it’s counterfeit, so if the handle breaks on a handbag, they don’t hold it against Louis Vuitton.”
Moreover, “I don’t think [counterfeiting] causes Vuitton to lose a material amount of sales in the long run.”
Of course, luxury firms battle counterfeiters on a global basis in order to protect their intellectual property and brand image.
Jacques-Franck Dossin, luxury analyst at Goldman Sachs in London, estimated that luxury firms spend roughly 2 percent of revenues to fight counterfeiting, an “expensive” effort, but manageable given the high gross margins of most major players. That estimate would mean that Vuitton, for example, spends about $58 million a year and Gucci Group about $54.2 million annually.
Dossin said he hasn’t noticed any major increase in counterfeiting activity recently, but observed that makers are becoming more sophisticated, bringing product to market more rapidly and producing facsimiles of increasing quality. He noted for example, that counterfeit Vuitton Tambour watches were being hawked by street vendors roughly at the same time as the real thing arrived in stores last fall.
The International Chamber of Commerce estimates that counterfeit merchandise represents 5 to 7 percent of global trade and costs an estimated 100,000 jobs in Europe alone, along with untold tax and duty revenues.