Originally published February 8, 2012 at 5:06 PM | Page modified February 8, 2012 at 6:59 PM
Fashion counterfeiters adapt to downturn, shift to cheaper brands
Not that long ago, counterfeiters focused almost exclusively on upscale brands like Prada and Gucci. But five years of a weak economy has knockoff artists churning out goods for people with more modest budgets.
Los Angeles Times
GINA FERAZZI / LOS ANGELES TIMES
What looks like a Lacoste women's polo shirt and Diesel jeans are for sale at a shop in Santee Alley in downtown Los Angeles.
GINA FERAZZI / LOS ANGELES TIMES
This shop in Santee Alley is advertising shoes for very low prices in downtown Los Angeles. Many counterfeiters are faking name brands which sell for much less to take advantage of shoppers during the downturn in the economy. No one keeps numbers, but fashion-industry experts say cheap fakes have exploded in recent years.
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LOS ANGELES — Mirabelle Vargas winds her way through the open-air stalls in downtown Los Angeles' bustling Santee Alley, hunting for Victoria's Secret underwear.
Or at least undies with a tag that says Victoria's Secret.
An authentic pair can cost $7.50 and up. But Vargas, 29, a retail clerk, managed to find a table brimming with pink-and-white unmentionables. Price: two bucks.
"Of course they're not real, not at this price," said Vargas, decked out in a chocolate-brown Victoria's Secret tracksuit, also counterfeit. "But the quality isn't bad, and buying fakes saves a few bucks. You can find fake everything here."
Not that long ago, counterfeiters focused almost exclusively on upscale brands like Prada and Gucci. But five years of a weak economy has knockoff artists churning out goods for people with more modest budgets.
At Santee Alley and other locations, you can find fake versions of shirts, pants and footwear by brands such as Gap, Dickies and Vans.
"You are seeing stuff now you can find at Target, not just stuff you can find at Macy's and Neiman Marcus," said Lt. Mathew St. Pierre of the LAPD's commercial-crimes division. "Five years ago, we wouldn't have seen $10 and $15 T-shirts being counterfeited like we do now."
St. Pierre said police investigate Santee Alley regularly, but he added that combating knockoff artists is a constant battle fought with limited resources.
No one keeps numbers, but fashion-industry experts say cheap fakes have exploded in recent years, especially in California.
"It's a huge problem because we are inexpensive fashion brands," said Ilse Metchek, president of the California Fashion Association. "We are Mecca for that. We are not Calvin Klein or Donna Karan. We are fast fashion. You can copy it within a week of appearance in retail stores and slap a label on it."
The economy is one reason. "The recession has more people trading down," said Susan Scafidi, academic director of the Fashion Law Institute at Fordham University's law school. "Even lower-priced brands feel like a stretch in this economy, and people are more likely to trade down to counterfeits."
Other factors drive the low-rent-counterfeit trend, including the Internet, a changing consumer mindset and anti-counterfeiting efforts by the giant apparel companies.
The big luxury brands have cracked down hard.
Last year, fashion label Tory Burch won $164 million in a lawsuit against a group of cyber squatters peddling fake shoes, purses and accessories.
Chanel filed suit in September against 399 websites allegedly selling knockoff sunglasses, wallets, jewelry and other goods bearing the luxury retailer's name.
But with slim budgets and few employees, small brands can't afford legions of lawyers and private detectives.
"It's a business-expansion strategy for the bad guys," said Tom Taylor, president of brand protection for OpSec Security, a Boston firm that monitors counterfeiters. "The downturn left a lot of capacity open in factories in China and other parts of Asia, so they are coming up with ways to fill that capacity."
Shoppers themselves, meanwhile, are another factor. A low-paid clerical worker might have a hard time passing off a $10,000 Hermes tote as the real thing. But who would ask questions about $44 Toms shoes?
"When you're talking about middle-market brands with middle-of-the-road price points, you don't have that stigma about counterfeits, people being suspicious about fakes, because the real thing isn't that unattainable," said Caleb Westbay, vice president of sales at Ed Hardy, a Los Angeles tattoo-themed street-wear brand.
Cheaper items may ultimately make more money for counterfeiters than their luxury cousins because it's easier to sell vast quantities of the lower-priced items.
The Internet has enabled counterfeiters to further elude authorities by cutting out the middlemen and selling directly to shoppers. The most ambitious websites have taken to copying photos and trademarks and registering dozens of domain names similar to the brand's official website.
Many shoppers, groomed by deals sites to expect heavy discounts, are duped into thinking they're buying the real deal, said Scafidi, of Fordham University.
"The Internet is a much bigger risk than the guy setting up a table with handbags," said Douglas Zarkin, vice president of marketing at Kellwood, owner of urban fashion brand Baby Phat, which has dealt with counterfeiters both online and off. "Technology allows people to put up a very professional-looking face when they are not professional people."
That's something Jeffrey Campbell, a Los Angeles company known for colorful and edgy footwear, has experienced firsthand.
Last fall, customers began asking why shoes they had ordered were taking so long to arrive, said company spokeswoman Sharon Blackburn.
The company investigated and discovered a handful of websites, with names such as CheapJeffreyCampbell.com, masquerading as authentic vendors and selling versions of the company's popular Lita boot, which retails for about $160, at a 60 percent to 70 percent discount, Blackburn said.
Shoppers forked over their credit cards and received nothing.
There was little the company could do besides report the sites to PayPal and urge shoppers to be careful.



