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June 20, 2012

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Hermes concerns after French raids

Hermes customers in Shanghai wanting to check whether their handbags are genuine after police in France busted a fake production ring may be out of luck.

Stores in the city said staff were not trained to check the authenticity of products.

French police said they had dismantled a "sophisticated counterfeit Hermes handbag syndicate," seizing US$22.7 million of fake products last Thursday. Two Hermes workers have been sacked and 12 others arrested in Paris and Lyon.

Police suspect many of the counterfeits were sold to China, one of the biggest markets for Hermes products.

There are three official Hermes stores in Shanghai but many customers buy their handbags online or during visits abroad.

The official price of a Hermes handbag is higher on the Chinese mainland than it is in other major markets such as Europe and the United States.

"That's why some avoid the official outlets in Shanghai but buy the handbags through online agent stores pledging to get them from overseas stores in places such as Hong Kong where the products are officially less expensive," said an industry insider and regular Hermes customer who asked not to be identified.

A large number of international bank accounts holding hundreds of thousands of euros linked to the fake manufacturing ring have been frozen, including 22 in Hong Kong, authorities said.

Police are investigating the possibility that more Hermes employees could be involved.

The French investigation has given many Hermes owners in Shanghai cause for concern that their bags, for which they paid anything from 100,000 yuan (US$15,737) to nearly 1 million yuan, could be fake. But they may find that they will be unable to check.

Shanghai Daily contacted all the Shanghai stores listed as official outlets on Hermes website and found that none would offer to check the authenticity of customers' products.

And, although Hermes has been in business on the mainland since the early 1990s, there is no customer hotline in operation.

The local stores told Shanghai Daily that staff were not trained in how to identify genuine products.

"The headquarters has been informed of the influence coming after the crime news. But we have so far not received any instructions from the company how to respond to special requests from customers," one store assistant said.

Shanghai Daily asked for an official response from Hermes in Shanghai but had not received any response by press time.

However, a media manager surnamed Huang told a local radio station yesterday: "We are progressing step by step. We should be given more time." He had been asked about the absence of a customer service hotline.

China is expected to overtake Japan this year to become the world's biggest luxury market with sales of US$15.5 billion.


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