By Jim Schutze
By Rachel Watts
By Lauren Drewes Daniels
By Anna Merlan
By Lee Escobedo
By Eric Nicholson
Stacks of jeans are displayed on a table in the center of Bittano Boutique, a trendy shop located in Mockingbird Station near American Apparel and Urban Outfitters. The store is full of colorful baubles, fashionable dresses and all the hallmarks of today's designer denim--embroidered back pockets, uneven washes, even some rhinestones. But according to several of the companies on the labels, they're fake.
Barbara Kolsun, 7 for All Mankind senior vice president and general counsel, sent the store a cease-and-desist order on September 29. She said a company sales representative had noticed that the jeans seemed inauthentic and bought a pair that was confirmed as counterfeit. The week after the letter was sent, the representative returned to the store and found the jeans still for sale--for $183.
Although many knock-offs are sold for low prices at discount stores and markets such as some along Harry Hines Boulevard, "the retail stores are a bigger tragedy" because they charge full price, Kolsun says.
Bita Azarian, owner of Bittano, says she didn't receive the letter and that if the jeans are knock-offs, she's not aware of it. "This is the first time we're hearing this," she says. "If it's counterfeit, and they have proof, we'll definitely pull them off the floor." She acknowledged having received a cease-and-desist letter from True Religion months ago.
"We only had two [True Religion] items in the store, and they were from a sample sale. We don't even carry them," she explains. But sales representatives from the company say they bought a pair of jeans at the store and determined they were fake True Religions.
When the Dallas Observer visited Bittano in late September, there were no True Religion brand jeans for sale. Most of the jeans were priced at around $200, the top of the price range for 7's, which retail for between $140 and $200, depending on the style. There were also jeans bearing the labels of Rock and Republic, which publishes a list of authorized retailers from which Bittano is absent, and Citizens of Humanity, whose regional sales representative, Katherine Mintz, said the store was not an authorized buyer.
Most companies send up to three cease-and-desist orders, and if the vendors continue selling the merchandise, they contact law enforcement.
"If they ignore it, we have them arrested," Kolsun says. "It's a state and federal crime." A copy of the letter she sent to Bittano cites counterfeiting, trademark infringement, and unfair competition and threatens to alert law enforcement as well as take legal action for compensatory and punitive damages.
Records show this isn't the only legal problem facing Bittano. According to the Texas secretary of state corporation data, the company hasn't paid the state franchise tax since 2002. Azarian denies that.
"That's impossible," she says. "I just paid my last franchise tax a month ago. I'll have to go clear that up."
Counterfeiting has grown exponentially over the past two decades, according to the International Anticounterfeiting Coalition, with global trade in illegitimate products totaling $600 billion each year, up from $5.5 billion in 1982. The manufacture and sale of fake goods contributes to organized crime and child labor and costs U.S. businesses between $200 billon and $250 billion annually, the group says.
Kolsun says that each month she receives an average of 20 to 30 reports of counterfeit 7 for All Mankind products being sold nationwide. Mintz of Citizen of Humanity says she gets an average of one counterfeit report each week from somewhere in the country.
Azarian says she bought the jeans sold at Bittano "from many places," including from Web sites and middle men with stores in New York. She says she pays between $80 and $110 for each pair.
"It's not like we buy them for $5. That's why I'm surprised," she says.
The majority of denim knock-offs come from China and are ordered online, according to a private investigator who works with several apparel companies and requested his name not be used because of his involvement in undercover operations.
"It could be they don't really know its counterfeit. They could be buying it online, thinking it's real," he said. "But under the law it's a should-have-known. If you're buying a $200 pair of jeans online [for a low price], you should have known what you should have known. "