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Chanel Executive Describes 2012 Factory Theft During Testimony

The first week of testimony in the Chanel and What Goes Around Comes Around trial in federal court not only brought to light the issues at hand — allegations of trademark infringement, false advertising and misleading — but also some of the specifics of a middle-of-the-night robbery in a factory in Italy that resulted in the theft of 30,000 serial number cards that had been earmarked to authenticate Chanel products.

In New York federal court Friday afternoon Joseph Bravo, Chanel’s executive operations director, spoke at length about how 30,000 cards imprinted with authorized serial numbers had been stolen from one of the major factories that Chanel uses in Milan in October 2012. Chanel uses the serial numbers a few ways on each product for authentication — on the cards and on holograms. The Chanel executive said he had been told of the theft the following day.

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Bravo said he soon traveled to the Renato factory to speak with the factory owner to understand what had happened. He said that a car had been used to break a door to enter the building. In addition, the padlock on the steel door of “the safety room,” where the serial numbers were stored, was also broken. However, none of the Chanel handbags or anything else other than the 30,000 serial numbers were stolen, according to Bravo. “These cards have value to counterfeiters,” he said.

Chanel voided those 30,000 serial numbers within its system after they were stolen. As a nod to how valuable those numbers are to the company, the luxury house’s financial team handles the task and marked them “stolen,” Bravo said.

Describing the night-time incident as “quite a fast robbery,” Bravo said that the thieves had fled by the time the security guards reached the area. During his visit to the factory, Bravo said he had been informed that the thieves were able “to hook the door” to the safety room before the guards arrived.

Separately, Bravo claimed that some of the stolen cards had surfaced after Italian police had discovered them in a raid of a garage and had asked him to verify the serial numbers. Referring to a document from “the financial police of Florence,” Italy, that was presented as evidence Friday, Bravo said that he had been asked by the authorities to review it previously and had identified a serial number that had been used on a counterfeit bag.

The serial numbers serve other purposes, too, allowing Chanel to pinpoint the factories where goods are made, as well as when and under what conditions. They also enable the company to track detailed information about such specifications as sustainability of each of the components that are used.

Bravo highlighted Chanel’s quality control, stating that the brand only produces the number of handbags that have been ordered and under no circumstances are unsold goods destroyed. Instead, the company will take back any unsold goods in order to dismantle them and upcycle the materials and components that were used. Given that, when the 30,000 cards with serial numbers were stolen, the Renato factory immediately appealed to Chanel for replacements, since it only had 1,000 other cards to work with at that time.

A red handbag that was in a WGACA dust cover was presented to Bravo and later to the jury to examine. In conclusion, Bravo said the red bag with two interclocking “C”s was counterfeit, based on its irregular shape, the color of thread used for stitching, the font size of “Chanel” on the zipper pull and the lack of a second logo on the reverse size of the zipper pull.

Chanel deals with counterfeit goods on many levels, according to Bravo, including “awful counterfeit products that are sold for 10 euros” on Florence’s Ponte Vecchio. Those are items that “even people, who are not familiar with Chanel” can tell are counterfeit., Bravo said.

The trial resumes Tuesday and Bravo is expected to continue his testimony Wednesday.

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