This week, we take a look at what resellers do with all those fake handbags they get from sellers, including using them for marketing purposes and educating their authenticators.
Resale companies are putting fake bags to work
The RealReal opened a pop-up on NYC’s Canal Street on Thursday stocked with 35 styles of luxury handbags, but none of them are for sale. The reason: They’re all fake.
Rather than a store, the pop-up is actually an installation. The RealReal partnered with creative agency Mythology to create what is essentially a fake storefront showcasing fake bags. The RealReal is classifying the effort as a marketing investment. The idea is to educate consumers on the difference between real and fake bags, to help them spot the difference, and to showcase The Real Real’s dedication to authenticity.
After several high-profile lawsuits between brands and resellers, resellers are putting the fakes they get sent by potential sellers to work both in both marketing to customers and training for authenticators. As dupe culture has led to more fakes for both luxury brands and lower-priced brands, efforts like The RealReal’s seek to discourage both the sales and the purchase of those products among the general public.
“Over the past 13 years, counterfeits have evolved. They’re being made more quickly and accurately than ever,” said The RealReal president and COO Rati Sahi Levesque. “We’ve continually invested heavily in advancing our technology and the training of our expert authenticators, ensuring we’re keeping [fakes] off the market.”
The pop-up’s location was chosen strategically. Canal Street has historically been one of the biggest markets for counterfeit bags, and it’s common to find dozens of vendors on the street and in backrooms selling high-quality counterfeits. The 35 fakes on display at the pop-up include popular and commonly counterfeited bags like the Louis Vuitton Speedy, the Hermes Birkin and the Chanel Flap Bag.
From now through September, The RealReal will hold regular activations on the top floor of the pop-up. For example, one day per month, customers can turn in a fake bag to be entered into a raffle to win a real copy of the same bag. The top floor will also host discussions with experts from within the industries of handbags, leatherworking and authentication.
Luxury brands are protective of their brands, and the issue of counterfeits has driven a wedge between them and resellers. Chanel has been notoriously defensive, suing both The RealReal and What Goes Around Comes Around over the potential sales of counterfeits and the right to claim the authenticity of the bags they sell. Meanwhile, Nike has sued StockX over similar concerns.
Kristen Naiman, chief creative officer at The RealReal, said fakes are an inevitable problem in the luxury industry. However, analyzing the bags and the way they’re made can be valuable learning tools for authenticators and consumers alike, she said.
“Fakes are a complicated topic,” Naiman said. “Like The RealReal, they were originally a response to the exclusivity of luxury fashion. So, we are going to share everything we know and hear what designers, thought leaders, craftspeople and our community have to say.”
After some aggressive cost-cutting, The RealReal has been on a rebound in the last six months, finally reaching profitability in March of this year with quarterly revenue of nearly $150 million.
Ben Hemminger, co-founder of the luxury resale platform Fashionphile, told Glossy that his team keeps the stacks of fake bags they’ve received over the years in the company’s warehouses.
“We used to just send fake bags back for free, but then people would send us anything they weren’t sure about,” Hemminger said, speaking at the Glossy E-commerce Summit in Miami on Tuesday. “So we started charging a $50 return fee for fake bags, which cut back on that. And often when people find out a bag is fake, if they really didn’t know, they just ask us to keep it.”
Hemminger said Fashionphile would never resell or even give away these fake bags, for both legal and ethical reasons. So instead, the bags serve as educational tools. Fashionphile’s authenticator team will take these fakes apart, compare them to real bags and catalog common identifiable traits of fake bags. The bags also can serve as functional wall art, Hemminger said. A deconstructed fake Louis Vuitton Speedy bag can be found mounted in Fashionphile’s New York and California offices.
“A lot of people ask us if we can slip them one of our fakes off to the side, but we would never do that,” Hemminger said. “We use them for science, or we destroy them.”
Executive moves this week
- Vasiliki Petrou is leaving Unilever where she has served as CEO of the Prestige Division for a decade.
- Cecile Cabanis was appointed as deputy CFO at LVMH, making her the likely successor to current CFO Jean-Jacques Guiony.
- Regis Rimbert previously worked at Austrian hosiery brand Wolford in the early 2010s, and now he’s returning as the company’s new CEO, replacing Silvia Azzali.
- Swatch Group’s chief controlling officer Peter Stieger is retiring, while Damiano Casafina and Sylvain Dolla, executives from elsewhere in the company, have joined the board.
More from the Glossy E-commerce Summit
In Miami this week, despite the stormy weather, executives from major brands like Macy’s, Larroudé and H&M gathered to share valuable insights about challenges related to wholesale, marketing and loyalty, among other areas. Take a look at some of our coverage from the event below.
- Brands are seeing better margins in wholesale than DTC
- Ricardo Larroudé on growing a business profitably: ‘I ask around to see what it costs to get it done, and then we do it ourselves’
- Glow Recipe’s Sarah Lee on turning community and loyalty into profit
News to know this week
- Skims is opening five new stores across the country.
- Shein is increasing its prices ahead of its potential IPO.
- Calvin Klein has a new flagship concept opening in Paris.
