News, The Business
Could Balenciaga Sue BeyondtheRack.com For Selling Unauthorized Merchandise?
By Leah Chernikoff
It’s hard to keep track of the seemingly countless sample sale sites that promise designer labels and luxury brands at deep discounts. But can you trust them?
After hearing that La Lohan (red flag!) had purchased a “beautiful” Balenciaga bag at BeyondTheRack.com, reader Madeleine asked Balenciaga if the site was authorized to sell the luxury brand’s merch.
She got the following reply:
“Unfortunately, Beyond the Rack is not an official Balenciaga retailer. In order to guarantee an authentic Balenciaga product purchase, we recommend that you purchase from an official Balenciaga store or retailer.” Click on the image below to see the response:
BeyondTheRack.com countered with a tweet: “Even if not officially ‘authorized’, all we sell is authentic.”
Suspicious, no?
Blogger Vicky Sullivan had a similar experience wrangling with site Sassy City Chicks for selling what what she believed to be fake Fendi bags. “I didn’t actually buy the Fendi because I knew that there was no way it was real…it was fake immediately because it was too shiny and rough to the touch,” says Sullivan. Luckily, Haute Life PR, the company who runs Sassy City Chicks, has been responsive. President Isela Blair emailed Sullivan to say that her vendors “have never been accused of having fake merchandise,” and that she “takes this information very seriously,” and is looking into the allegations.
And as this morning’s settlement between Fendi and Filene’s illustrates, even established discount retailers like Filene’s Basement can’t always be trusted to sell authentic luxury brands–at least not directly from the retailer. Fendi settled with Filene’s Basement for $2.5 million over allegations that the retailer sold counterfeit Fendi, reports the AP.
Earlier this year, the luxury brand was awarded $4.7 million from Burlington Coat Factory and co-defendant Cohoes Fashion Inc. for violating an injunction which prohibited Burlington from selling Fendi without permission, according to WWD.
So what’s your take? Do you trust these lesser known sites?
We’ve reached out to Balenciaga and Haute Life PR and will update with any responses throughout the day.
UPDATE: Isela Blair, President of Haute Life PR wrote in with the following statement: “Sassy City Chicks acted swiftly and contacted the exhibitor that Ms. Sullivan alleges sold fake merchandise…The exhibitor has been very willing to provide purchase slips proving the authenticity of her merchandise and vehemently denies that any of her products are fake.”
Tags: Balenciaga, BeyondTheRack.com, Counterfeit, Fendi
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Thank you for running the story I blogged about yesterday. It's so disturbing and unfortunately rather ordinary.
InNewYorkParisTomorrow.blogspot.com
i don't know. the balenciaga email sounds like standard corporate jargon as they are very protective of their brand and rightfully so. i read the disclaimer on beyond the rack's site and it said something to the effect of the bags could be purchased from the manufacturer or from another retailer authorized to distribute the items. so it's possible that they could have bought unsold merchandise from another store like neiman's or saks.
while i'm all for discounts, it you're going to drop that much money on a bag, maybe it's best to suck it up and pay full price from someone reputable. though it may cost more, at least you know you're getting a legit product.
also i'm curious to know what's the going rate to get lindsay lohan to tweet about your company?
Good question! I'll look into that. Thanks Musings!
I read she was getting $10,000, and it immediately struck me as odd that Balenciaga, a brand said to not even let Fashion mags shoot their pieces unless it's a complete runway look, would let Lohan hock their goods. This article clears up the confusion.
I just received an email from Burberry – BeyondTheRack is NOT an authorized dealer of that either.
Very upsetting.
Madeleine Gallay
InNewYorkParisTomorrow.blogspot.com
Would the same standards be applied to vintage shops or consignment shops that re-sell merchandise? Also, where would they be getting the bags from in the first place?
Beyond the Rack and many other sites probably use a middle man exporter/importer (like Colton Int) that buys extra/leftover/past season stock directly from Italian department stores. This is generally why these sites have limited quantities of each style and they sell out quickly. It's also why they are not an “authorized” vendor, not because they are fake, but because they don't buy directly from the vendor. Once items are sold to these department stores from the authorized vendor, whether in the US or in Italy, they can sell them to whoever they want when they want to get rid of it and make money off it (instead of it going to an outlet, warehouse sale like barneys, etc).
GV has a pretty comprehensive answer for you, just below.
Brands like Balenciaga accept, but try to limit turnover to consignment and vintage shops, because it's a natural part of the buying the discarding cycle that they rely on. Shops like Beyond the Rack purchase from middle-men, who usually have purchased unsold merchandise from approved retailers. All of this is completely legal, but not a preferable situation for a brand seeking to limit who it's products are available to and at what cost. I perceive this to be the main reason Vuitton only sells in Louis Vuitton boutiques and its own website, it's about limiting sales of unsold merchandise to middle men, like GV explains.
Thanks for the reply, and that seems logical. If that is the case then, I don't think Balenciaga would be able to sue this site for selling the bags, if they are authentic and obtained legally. What they would need to do is what Louis Vuitton is doing and sell in their own boutiques exclusively. From the reaction of Balenciaga, it doesn't seem like they are that worried with this, unlike say, Louis Vuitton.
They can sue if the brand has an injunction against this kind of thing. That's why Fendi was able to sue Burlington Coat Factory and win. While the Fendi's at Burlington were undoubtedly real, they weren't sold to BCF by Fendi. (See story here, sorry but subscription-only. http://www.wwd.com/business-news/fendi-wins-set…)
In Europe, luxe brands are trying to make this a broader law so that not even eBay can sell this stuff. Consignment shops aren't usually included because the items are one–off, not bought in bulk. (eBay's are one-off, but the deals are so plentiful the luxe brands believe that it affects their business.)
They can sue if the brand has an injunction against this kind of thing. That's why Fendi was able to sue Burlington Coat Factory and win. While the Fendi's at Burlington were undoubtedly real, they weren't sold to BCF by Fendi. (See story here, sorry but subscription-only. http://www.wwd.com/business-news/fendi-wins-set…)
In Europe, luxe brands are trying to make this a broader law so that not even eBay can sell this stuff. Consignment shops aren't usually included because the items are one–off, not bought in bulk. (eBay's are one-off, but the deals are so plentiful the luxe brands believe that it affects their business.)
I suppose it takes a certain level of confidance in your wherewithal to deal exclusively in your own boutiques, and from my bystander point-of-view, I don't foresee that happening with any brand under PPR (the company that brings us Gucci, perhaps the least exclusive luxury you could want)
That's what balenciaga says about many companies. I don't think bluefly.com is an authorized seller either but they sell authentic balenciaga. I don't think they will sue. They know it is going on. Also you can always go to the purse forum to get the balenciaga authenticated. They are very good.
Just because some fashion companies want to control who may obtain their products, how much they cost, and where they can be purchased does not mean that they can.
Once a good is legally sold to another party, the ownership rights terminate. If the new owner wants to use the good, sell it to someone else (sometimes at a large profit), or even destroy it, the former owner has no rights to dictate how the good is used.
Just because balenciaga or burberry do not want their goods being sold on by an authorized company/retailer which obtained the goods from balenciaga/burberry, they have no legal ability to prevent this. They only way this could be achieved is to establish a legally binding exclusive supply agreement with the authorized retailer, preventing this retailer from selling them in bulk. Barring this, they have no say in what an authorized retailer does with the goods. Even if this were the case, balenciaga/burberry could only go after the authorized retailer, not a purchaser such as BTR since no binding contractual obligations exist between balenciaga/burberry and BTR.
This would be like a construction company selling a house to a first owner, and then insisting to subsequent potential purchasers that the only way to get a genuine brand name house is to buy a new house, and not a previously owned one.
While attempting to pass off a fake good as an authentic one is against the law, that is not what BTR is doing. Simply stating that other retailers have passed off goods and implying that BTR may be doing the same is irresponsible and could be slandering the company.
The point of this is to consider that there are now many companies such as SassyCityChicks.com and BeyondtheRack.com. After emailing Balenciaga, Burberry and now Jacob & Co watches and finding they are not authorized, the response that the goods are authentic becomes questionable. Reading through the comments, there were possibilities offered of how these companies acquire designer goods. All of which is possible. But one must accept that some of the designer discount companies are simply selling replicas, mirror copies, etc. Cash at the back door of all these factories for goods quietly slipped into the grey market? Maybe but most of these companies have a limited supply and the cost of going to factories in obscure places, hoping to find a stock boy willing to accept cash, well it doesn't work as a “great, let's do business that way.” Could the stock be leftovers from stores at the end of the season? Certainly, but those stores have their own Warehouse Sales and Outlet stores now. The thing is that some of the merchandise some of these places sell may be just fine but at the end of the day you don't know. They are not supplying their sources and you have only ninety days to discover that a purchase is fake or your credit card company can't help you.
The comment above mine is offering a conclusion and stating that BTR is not passing fakes off as authentic. The truth is that the only way to know you are buying authentic merchandise is to check with the designer, which I did. They are not authorized, they are not divulging their sources and essentially their customers are buying on faith. It's not a sustainable practice.
The responses to this from BTR have been anemic, only tweeting that they buy from a number of sources but they are not selling authentic merchandise. And frankly if you take a look at either grey market or replica designer goods on google, you would be very surprised. These are not cheap copies, they are mirrors of the bags and many of these sites sell, illegally, Balenciaga bags as an example for 141.00.
This is an unregulated business model and it would attract absolutely hard working people that love fashion and it certainly has attracted snake oil merchants.
Be safe, check the designer website, ascertain where the online discount sites have obtained their goods.
InNewYorkParisTomorrow.blogspot.com
i agree with this. where's the luxury in buying luxury products from a dubious internet source or a bin at a discounter? for me, any price savings are moot if I have to worry about authenticity.
I remember the summer Loehmann's went out of business in center city Philadelphia, they clearanced everything of course, and so many women were walking around with the same tote it became known as that-Loehmanns-Missoni-bag. I'm not saying you can't find good stuff for good deals at reputable discounters, but Loehmanns-Missoni-bag-scooper isn't the style message people think they're sending when they try to get deals on luxury accessories.
That's why I love vintage!
if it is the exact same product that comes from the factory of the exact same bag you can buy at neiman marcus, strictly speaking, it is authentic. and grey market (with regards to merchandise) generally is used to define merchandise that were bought from a middle-man that may not be strictly authorized to resell the products outside of an area. It generally doesn't mean fakes. For example, if a brand sells 1000 bags to an importer that is contractually to distribute them to department stores in a specific area only (for example maybe Malaysia/Phillippines/Thailand) but the importer's deal with the department stores is that the importer will take back any that are not sold at the end of the season. Let's say 200 are returned and these are then sold to a second middle-man in the area who than sells it back to the N. American market (i.e. BTR or Hautelook). These bags are part of the grey-market and strictly speaking it is a violation of the initial importer's contract but with the international web of laws and transfer of merchandise over many hands, it is very difficult if not impossible to successfully sue and determine who to sue. [and this is one of the reasons why LV does not sell their products outside of their own shops] And while brands like Balenciaga say they do not like it, there are very few importers in certain areas that have the clout/access to luxury retailers in those parts of the world so they have little choice but to pretend this issue doesn't exist. This might be news to some people but its been going on for a long long time in many industries.
if anything, how do you know a burberry or balenciaga wallet is authentic at a consignment shop?
for me, i rather just save my money and buy it in stores….part of the fun is being in the shop and looking at it. instant gratification.
I have bought a couple of designer bags at BeyondTheRack and they were all 100% authentic. Obviously, they were overstock gotten from other vendors who couldn't sell them at full price and couldn't lower the price at their retail stores due to agreements with the luxury brands, so they had to sell to third parties (like BeyondTheRack). That's the beauty of bargains: you take advantage of the laws of offer and demand and get something amazing for less. I love BeyondTheRack!
wow, this person clearly works for beyond the rack or was paid by them to post…
http://retailstores.thecompanymarketing.com/top… – this article may be of interest to all here. I too purchased from beyond the rack and the items i purchased were authentic. I do not work for this company ..