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Knocked Off and Marked Down

At the start of the downturn, Counterfeit Chic predicted two contradictory effects on the market for streetcorner copies:

  1. Some increased sales potential, as consumers pass up even deeply discounted genuine items in favor of rock-bottom prices on fake. 
  2. A concurrent downturn, as the prominent display of luxury logos -- real or fake -- becomes passe, even among the dwindling number of tourists.  

Turns out there's been evidence of both trends, with at least some counterfeit vendors having experienced brisk pre-holiday sales, while the overall lust for labels has diminished.  This week's New York magazine reports that a falling tide does indeed lower all boats:

One of the hallmarks of the boom was the triumph of "aspirational" branding: a pair of Gucci-stamped sunglasses did not cost three times as much to produce as a pair of Ray-Bans, but commanded three times the price.  Flush with cash (or easy credit), consumers bought the proposition that the brand itself -- the status it conferred -- was worth a 300 percent markup.  Not any more.  Not only are real designer bags hard to move off the shelves but the Canal Street knockoff market is in free fall too.  A zebra-patterned fake Versace bag, which used to sell for $45 in the summer, now barely fetches $25.  With the arrival of the crisis, the price tag on status has come up for renegotiation.  Today's consumer is demanding less and better at the same time.

Of course, design houses can fall back on claims of originality, artistry, and quality -- if the consumer is listening.  And despite rumors of plain brown bags being offered at high-end boutiques, the formerly proud owners of famous brands or counterfeit copies aren't sitting at home with seam rippers and solvents, trying to remove luxury labels.  Still, when wealth imitates frugality and, "No, I found it in the back of my closet," and "70% off" are style signifiers, it stands to reason that pale imitations of opulence would fade still further.