Saturday, January 31, 2015

A Sad Day for Hermes

Apple now leads the luxury gift market in China, taking the #1 slot from Hermès

Apple is on rather a roll at the moment. A new world record for quarterly profits. Best-selling smartphone maker in China. Joint leader of the global smartphone market. Record-breaking app store earnings. Now Reuters reports that it’s picked up a new accolade, leading the luxury goods market in China.
Apple Inc has taken the number one luxury gifting spot in China from designer goods maker Hermès International SCA, according to a Hurun luxury report on Thursday, reflecting the iPhone maker’s recent hot streak in the country.
Hermès is a French maker of designer clothing and accessories, known for its scarves and handmade leather luggage. Apple also beat Louis Vuitton, Gucci and Chanel to the title. The Hurun luxury report is an annual survey of the spending of millionaires in the country which has been running for more than a decade. The launch of the Apple Watch in April is likely to solidify Apple’s position in the Chinese luxury goods market.


Saturday, January 24, 2015

Wednesday, January 14, 2015

9 Most Counterfeited Products in the USA - #1 is Handbags!

Counterfeit products may cost the global economy up to $250 billion a year, according to estimates from the Organization for Economic Co-operation and Development (OECD). Millions of those shipments enter the United States.
While government agencies do their best to crack down on counterfeit goods, they only manage to catch a fraction of the fake products that enter the United States. Still, the U.S. Customs and Border Protection (CBP) values that seized fraction at staggering amounts. The value of counterfeit goods seized rose by 38.1% in 2013, from $1.2 billion in 2012 to $1.7 billion last year.
Based on the manufacturer's suggested retail price (MSRP) of the genuine versions of the counterfeit goods, some of the most valuable imitations were of handbags and wallets, watches and jewelry, and consumer electronics. 24/7 Wall St. reviewed the nine most counterfeit items seized in 2013, based on their retail value.
The value and number of seizures changes considerably from year to year, depending on what items were being counterfeited, as well as law enforcement activity. Therese Randazzo, director of CBP policy and programs on intellectual property rights, explained that, in some cases, increases in seizures are the result of such activity. In other cases, such as footwear, decreases in seizures can also reflect the success of prior campaigns by CBP and other agencies, she added.
In some cases, changes in the number and value of goods seized did not move in tandem. For instance, while the number of watches and jewelry seized remained roughly the same between 2012 and 2013, the value of those seizures rose by 169%. According to Randazzo, fluctuations will occur with luxury goods like handbags, watches and other types of jewelry in particular, because there is such a large range of values with these products.
Luxury items tend to be the most counterfeited products because they are more valuable, according to Randazzo. And with better counterfeiting methods, there is a greater challenge of detection as well as potential for even higher profits, she explained. Consumers can no longer take for granted obvious signs of imitation such as poor stitching or bad zippers. "Now, the quality [of fake products] has improved so dramatically that [criminals] have been able to charge at prices closer to the price of the genuine article."
China's role as manufacturer for a broad range of authentic products, as well as its intellectual property rights framework, may contribute to the country's high levels of counterfeiting. About $1.2 billion of the $1.7 billion worth of imitations picked up by U.S. law enforcement agencies originated in mainland China. More than $400 million worth of seized goods came from Hong Kong, which CBP classified separately.
The process and methods of detecting these counterfeiting operations is constantly evolving. The increased number of seizures in 2013, according to Randazzo, can be explained in part by new collaborative efforts between CBP and various partners, including China Customs, the customs agency for the People's Republic of China. The success of such operations has resulted in a measurable increase in the number and value of seizures and the ability to target and intercept shipments of knock-off products, she added.
Based on information provided by the CBP, 24/7 Wall St. reviewed the nine most counterfeited items seized by officials based on the MSRP of the genuine article. We looked at the number of shipments of each product type confiscated in both 2013 and 2012. We also reviewed CBP data by country to identify the value of counterfeit goods produced in specific countries.

These are the 9 most counterfeited products in America.

9. Optical Media
> MSRP of seized goods: $26.8 million
> Pct. of total seized goods: 2%
The number of shipments of counterfeit optical media products, such as games, DVDs and CDs, the CBP seized fell to 1,409 last year from 2,892 in 2012. The value of the seized counterfeit optical media products fell by 30% from $38.4 million in 2012 to $26.8 million in 2013. According to IPR's Randazzo, the drop in seizures may be partly attributable to the Internet, as "the piracy has moved to websites and moved to downloads." Last year, in an effort to fight online piracy, Internet service providers banded together to introduce the Copyright Alert System, designed to fight copyright infringement by warning users against illegal file sharing and downloading.
8. Labels/Tags
> MSRP of seized goods: $41.8 million
> Pct. of total seized goods: 2%
The number of counterfeit labels — trademarked logos and hang tags that are not attached to products — seized in 2013 was effectively unchanged from 2012. The value of these seizures, however, increased more dramatically than of all but two other products. Last year, the market value of counterfeit labels seized rose by 59% to $41.8 million. Because consumers recognize many products and brands according to their labels and tags, the fake labels help deceive buyers and make imitations look more authentic. Counterfeiters often smuggle the fake labels and the fake products into the United States separately, Randazzo told 24/7 Wall St. That way, "if the counterfeiters lose the shipment of labels and tags, it's not that big of a loss because they still have the shipment of handbags [or other goods]."
7. Computers/Accessories
> MSRP of seized goods: $47.7 million
> Pct. of total seized goods: 3%
Slightly more than 1,000 shipments of computers and accessories were seized in 2013. The counterfeit computer seizures accounted for 4% of all counterfeit seizures and for 3% of the total value of all counterfeit goods seized. Last year, the total value of such goods seized was more than $13 million, or 37.5%, higher than the year before. This is despite the fact that genuine PC shipments have declined worldwide during that time. Randazzo explained that accessories can include a large range of products, including "integrated circuits, semiconductors, networking hardware, [and] printer cartridges." The Semiconductor Industry Association released a report in August, noting that counterfeit semiconductors can cause dangerous malfunctions in medical equipment and even in household appliances.
6. Footwear
> MSRP of seized goods: $54.9 million
> Pct. of total seized goods: 3%
CBP agents reported 1,683 seizures of contraband footwear in 2013, 214 less seizures than in the year before. The value of these seizures dropped by nearly 47% in 2013, from $103.4 million in 2012. This was one of the largest percentage declines among products reviewed. "Footwear used to always be the number one commodity," Randazzo said. "And I think we've seized so many container loads of counterfeit shoes that we've actually maybe started to have an effect." This is likely something of a relief to shoe companies, especially Nike, whose shoes are widely believed to be among the most counterfeited footwear brands.
5. Pharmaceuticals/Personal Care
> MSRP of seized goods: $79.6 million
> Pct. of total seized goods: 5%
CBP agents seized nearly $80 million worth of counterfeit pharmaceuticals and personal care products last year. This was 4% lower from the nearly $83 million of such shipments seized in 2012, and down 44% from $142 million in 2011. Total seizures of such products fell in 2013 to 2,215 from 2,350 the year before. The decrease in seizures can be the result of increased international efforts to crack down on the sale of fake prescription drugs. Randazzo noted that the CBP and other groups have aggressively pursued counterfeit drug operations and shut down websites selling drugs online "because of the threat to consumer health and safety." More than $18 million worth of fake pharmaceuticals and personal care goods originated in India, accounting for 88% of illicit goods seized from the country last year. An additional $43.7 million of such goods came from China.
4. Wearing Apparel/Accessories
> MSRP of seized goods: $116.2 million
> Percentage of total seized goods: 7%
Last year, the United States seized almost 10,000 shipments of counterfeit apparel and accessories, by far the most of any commodity and up 26.8% from the year before. In all, more than $116 million worth of such items were seized. Like with other goods, exactly what type of product is being counterfeited matters, Randazzo noted, with haute couture knockoffs assigned a higher MSRP than blue jeans, for example. Last year, the CBP, in conjunction with other federal and local agencies, conducted "Operation Red Zone," which seized $17.3 million worth of fake sporting apparel — jerseys and ball caps — and other collectibles coinciding with the 2013 Super Bowl.
3. Consumer Electronics/Parts
> MSRP of seized goods: $145.9 million
> Percentage of total seized goods: 8%
The dollar amount of counterfeit consumer electronics products seized rose by 40% in 2013, to $145.9 million from $104.4 million in 2012. Further, consumer electronics comprised 8% of the total value of items seized last year, making it the third most frequently seized fake product. The number of seizures of counterfeit electronic products grew in conjunction with their total value. There were 5,656 such seizures in 2013, a 44% increase from the 3,928 seizures in 2012. According to a report by the CBP, one particularly big seizure in 2013 was by a joint CBP and China Customs operation. The two-month long operation resulted in 1,735 electronics shipments being seized, removing more than 243,000 counterfeit consumer electronic products from the market.
2. Watches/Jewelry
> MSRP of seized goods: $502.8 million
> Percentage of total seized goods: 29%
The value of seized imitation watches and jewelry grew by 168.9% between 2012 and 2013, considerably more than that of any other commodity. In total, the value of watches seized was more than half a billion dollars in 2013. Last year, there were 1,729 seizures, 21% less than there were in 2012. Randazzo noted that the different trends in value and seizures may be a product "of what's targeted and seized in a given year." For example, fake versions of high-end watches, which retail for thousands of dollars, can boost the values of counterfeits seized. The Federation of Swiss Watch Industry estimated that some 120,000 imitation watches were seized worldwide in 2013.
1. Handbags/Wallets
> MSRP of seized goods: $700.2 million
> Percentage of total seized goods: 40%
Handbags and wallets were again the most seized counterfeited product, by MSRP, in 2013. The roughly 2,200 shipments seized had a total MSRP of more than $700 million, accounting for 40% of the total value of all goods seized. Because these products are valued so highly, a drop in total handbag and wallet seizures between 2012 and 2013 did not correspond with a drop in the market value of the items seized. In fact, while seizures fell by 17% in that time, the value of goods seized rose 37%, or by nearly $189 million. Randazzo explained that the retail value of the genuine goods can increase the value of the seized counterfeits considerably. While a fake Coach bag is often valued in the hundreds of dollars, "if we seize a counterfeit Hermes bag, the value …of some of those bags is thousands of dollars." Most such counterfeits originate in mainland China, which alone accounted for more than half a billion dollars in fake purses last year, according to the CBP.

Friday, January 9, 2015

How the Hermès Scarf Remains an A-List Accessory:

By Being Stubbornly French

The world's sleekest square of silk, sold every 25 seconds

In the fashion world there are scarves, and then there is the scarf. Queen Elizabeth II wore one for her postage-stamp portrait. Jackie Kennedy kept the Nantucket rain off her hair with hers. And when Grace Kelly broke her arm in 1956, she memorably knotted her scarf into a sling. With some squares priced over $2000, this is one of the costliest pieces of silk one can buy—a fact that does not keep the things from floating off the shelf at a rate of two per minute. If you can’t guess what this accessory is by now, you’ll probably never own one. After all, Hermès—France’s most storied luxury brand—doesn’t advertise much, and it hardly needs to advertise its scarves at all.
Photo: Nick Ferrari
"The key point to understanding the cachet of Hermès scarves has a lot to do with how women perceive their images," explained fashion historian, author and Hermès devotee Polly Guerin. "A woman of privilege wants to be set apart from the crowd and say, 'I’m special,' and 'I can afford this.'"
Of course, such logic works with most any luxury brand. What makes the Hermès scarf unique is the carefully orchestrated rarity of the product.
Hermès works with a small coterie of artists to create about 20 new designs a year. A single pattern may take 18 months to reach stores, including the 750 hours required to engrave up to 43 silkscreens—one per color—all applied by hand. What’s more, unlike many brands that license their accessory lines to producers in China, Hermès is proudly, stubbornly French. Its team of seamstresses and silk printers in Lyon is told to take its time and do its best work. There are no production quotas.
The result is a fashion accessory that comes with the one thing better than a head-turning price: a genuine mystique. It helps that the house of Hermès originally made saddles and harnesses for the likes of Napoleon III. Silk produced for jockey’s riding jackets gave rise to the idea for scarves, which first appeared in 1937. The colorful prints drew stars including Audrey Hepburn and Catherine Deneuve, whose own mystique has helped lure their younger counterparts: Oprah, Mariah (Carey) and Sarah (Jessica Parker) to name just three.
In the process, Guerin said, Hermès scarves have become a kind of fashion currency: "It’s not unusual for a woman to own a collection of Hermès scarves and in the end bequeath them to other women, as the scarf has hereditary value."
It has cultural value, too. Retired New York PR man Dirk van den Heuvel, a regular at Studio 54 back in the day, remembers that society ladies weren't the only fans of Hermès scarves. "Every drag queen in the world has to own one or two," he said, "and most fashionable gay men would want to include a few in their wardrobe."

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