Counterfeiters go downscale

Mirabelle Vargas, 29, 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 from the lingerie maker can cost $7.50 and up. But 
Vargas, a retail sales clerk, managed to find a table brimming with 
pink-and-white unmentionables. Price: two bucks a pop.
“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 tastes 
and 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 are aware that counterfeits are being sold at 
Santee Alley and investigate 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 for the trend. “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.”
There are several other factors driving the low-rent-counterfeit trend, 
including the Internet, a changing consumer mind-set and beefed-up 
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, making them less-risky 
targets for counterfeiters.
“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.
Until its worldwide licensing rights were sold last year, Ed Hardy had 
a dedicated anti-counterfeiting team that worked with the police to 
identify and track down knockoffs. In 2006, the brand started sewing 
anti-counterfeit strips onto its clothing labels, similar in idea to 
the security strips that go into dollar bills, Westbay said.
“Counterfeit goods look authentic. Everything from quality and 
execution of product down to packaging and labeling and all that 
stuff,” Westbay said. “It’s tough to fight.”
These 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. Many more people are likely to buy $15 
counterfeit hoodies and sweat pants than shell out $100 for a fake 
Louis Vuitton handbag.
“If there is profit to be made, things will be counterfeited, and it 
goes so far beyond luxury goods in terms of what is actually being 
counterfeited,” said Christine Hogue, who monitors counterfeits as an 
import advisory specialist for the U.S. Customs and Border Protection 
agency at the Los Angeles and Long Beach ports.
The Internet has enabled counterfeiters to further elude authorities by 
cutting out the middlemen and selling directly to shoppers. The most 
ambitious counterfeiting 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 Co., 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, pointing to order numbers that Jeffrey 
Campbell had no record of handling, 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.
The red flag: Some of the sites were peddling shoe styles specially 
created for clients and produced in very limited quantities, Blackburn 
said. Shoppers forked over their credit cards and received nothing.
But there was little the company could do besides report the sites to 
PayPal and urge shoppers to be careful.
The company previously had seen counterfeits of its shoes made by a 
Chinese manufacturer being sold on EBay.
“Our loyal customers can tell the fakes and they don’t want them,” 
Blackburn said. “But we are not an Apple or Chanel or Gucci. Those are 
so recognizable that people immediately know the brand and the 
possibility that it’s a knockoff.”