Wednesday, August 02, 2006

Abercrombie limits purchases

Retailer hopes to stop resales by halting bulk buying

Jeffrey Sheban

The Columbus Dispatch

COLUMBUS, Oh. - To thwart counterfeiting and the unauthorized resale of its clothing, Abercrombie & Fitch has quietly limited bulk purchases at its 864 stores.

The policy has been in place for about a month and applies to all divisions: Abercrombie & Fitch, abercrombie kids, Hollister and Ruehl. The stores have a 20-piece limit, per family, per day.

The limits are meant to keep people from buying clothing in bulk for resale at inflated prices on eBay or similar Internet auction sites, spokesman Thomas D. Lennox said.

Many non-English speakers prefer local versions of eBay to company Web sites, Lennox said. In some case, they can get around import duties or find items no longer available in stores.

In addition, large quantities of clothing are being shipped overseas and mixed in with counterfeit goods sold in fake Abercrombie storefronts to lend an air of credibility, Lennox said. Phony storefronts have turned up in Japan, South Korea and elsewhere.

"We don't think it's a good practice for people to come into stores with suitcases," he said. Most of the bulk sales occur in large, tourist-oriented areas including Hawaii, Los Angeles, New York and southern Florida.

Abercrombie & Fitch, based in New Albany, has an international following but no stores outside the United States and Canada. The company plans to expand to Asia and Europe, and is building its first store outside of North America in London. It is expected to open in the spring.

Lennox said no retailer wants to give up sales, but the company felt it had to do something.

"It's from a pure brand-protection viewpoint," he said. "We've heard very few customers express frustration."

Counterfeit goods cost U.S. industry up to $250 billion a year in lost sales, according to the U.S. Immigration and Customs Enforcement agency. Apparel, software, cigarettes and prescription drugs are among the most common items faked.

Abercrombie & Fitch has a fraud division dedicated to uncovering and breaking up counterfeiting rings. In the past six months, the company has uncovered counterfeit goods in more than 30 countries in Asia, Europe and South America, said Shane Berry, a former FBI special agent leading the company's efforts.

"There is a definite relationship between counterfeiters in different countries," Berry said.

When counterfeit goods are found, the company asks local authorities to conduct raids and takes legal action to shut down illicit operators, Lennox said.

eBay is another outlet for fake goods or goods purchased legitimately in North America and resold at high prices in other countries, he said.

Abercrombie is one of the top 10 brands searched in eBay's clothing, shoes and accessories category, spokesman Catherine England said. eBay has 203 million registered users worldwide.

England said eBay has 2,000 employees dedicated to policing transactions, working with law enforcement and developing software to detect fraud. The company shuts down postings when suspicious activity is found.

"If it's illegal to do off eBay, it's illegal to do on eBay," she said.

But eBay has no problem with someone buying legitimate Abercrombie clothing and trying to sell it at whatever price the market will bear.

"We want to protect the interests of both the retailer and the reseller," England said. "But eBay is a venue where the marketplace determines the value of an item rather than the manufacturer."

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