NEW YORK — Abercrombie & Fitch is fighting back against counterfeiters as it seeks to expand internationally, and has recruited a former FBI agent to lead the company’s brand protection team.
Members of the anticounterfeiting and brand protection unit are going undercover as buyers of bogus or stolen products, and, along with local authorities, are raiding factories and warehouses, including a string of operations last week in Taiwan’s Taipei City, where, in one case, 4,000 T-shirts, polos and other items were seized. At least 10 phony A&F storefronts were uncovered in Asia and Europe last year. And during a June raid in China, an A&F undercover agent posed as a buyer and was taken blindfolded to a site where 298,000 A&F units of denim, valued at $20 million at cost, were later confiscated.
The crackdown is intended to pave the way for a smooth global expansion. A&F’s worldwide growth kicked off last month when three stores opened in Toronto and two in Edmonton. Thirty are expected to open in Canada over the next several years. There are plans to launch a London flagship as soon as spring 2007, and stores in other countries are planned, though there aren’t specific sites yet.
The anticounterfeiting initiative will get “whatever resources its needs,” said Shane Berry, senior director of brand protection, who was hired three months ago after seven years in the FBI, where he was the supervisory special agent for the intellectual property rights unit at the bureau’s headquarters in Washington, D.C. “Nothing is more frustrating than to see the brand knocked off and counterfeited. Southeast Asia is a particular hot spot. A lot of counterfeit product originates there.”
Taipei has been cited in news reports as having three primary areas where the counterfeit brand can be found — the East Side (Zhongxiao East Road and Xinyi District), Ximending and Tianmu. Shops hidden in alleys often sell real A&F product from A&F factories that secretly overproduce.
Integrating enforcement, trademark and litigation is critical. “A lot of times, legal and enforcement components are done in a vacuum,” Berry said. “Enforcement is so difficult globally. Every country has subtle nuances, and there are many differences in laws.”
A&F seeks local law enforcement assistance in dealing with large manufacturers. With local stores or storefronts, A&F might pursue cease-and-desist orders or monetary penalties, Berry said. And regarding a supplier in the U.S. moving product to multiple retail points, A&F might form a liaison with Customs, local law enforcement or the FBI.
The anticounterfeiting team includes John Carriero, director of brand protection, as well as investigators, associates who support investigators, lawyers and a Web analyst who polices the Abercrombie brands, including A&F, Hollister and Ezra Fitch, on the Internet. Illegal products are typically advertised on the Internet, shipped overseas to retailers that are not authorized to sell the goods and priced three to five times the legitimate retail price. “A $29 Hollister T-shirt may go for $80 or over, in countries where we don’t have a presence,” Berry said.
Aside from Louis Vuitton, Abercrombie could be the most copied fashion brand, and it’s certainly the most ripped off among U.S. specialty apparel retailers, Berry said.
“We are going after the people that are supplying it,” he said.
Berry said it was impossible to determine how big the volume is on counterfeit A&F products, but the amount of “overproduction” or unauthorized merchandise produced in factories used by A&F and slipping “out the back door” is significant. “I don’t think there is an effective way to [measure] it, but there is a lot of freelancing,” he said.
The problem is particularly troublesome considering Abercrombie’s international ambitions. “If there are multiple sources of the product, the brand value is damaged significantly and there is a dilution of market issue,” Berry said. “It’s absolute theft. We don’t want people being confused or deceived by what they believe is a real Abercrombie & Fitch product.”