The sale of brand clothing accessible to all is the basis of the business of North American department stores such as T-Maxx, Marshalls and Ross. They buy the products that the big brands ask different factories to make but that ultimately do not sell them, either in their stores or in the warehouses of the textile industries around the world. In the words of retail: balances.
The biggest company that does this is TJX, who own T-Maxx and Marshalls. The one with a market value of US 92 billion with more than 2,300 stores throughout the United States.
In the end, the raison d’être of this model is to take advantage of excess inventory. They are garments from previous campaigns, production surpluses or balances and even items from bankrupt companies.
But what does it have to do with the accusations against La Polar? What is it that they do? How is the purchase mechanism? The Radio Bío Bío Investigation Unit accessed documents that show how the purchases would be made and the supposed quality reviews that are carried out on the products.
The world of balances
Internationally, the purchase of balances is common, something that has not reached Chile, apparently, or at least it was believed, due to the small local market. However, it is a model that is used with greater force in the United States. And the mechanism to follow is through an intermediary company to which each factory reports the balances it has by product and brand. Those that are supported with the purchase order of the official brand, according to the requirements of that country to approve imports.
In the end, the purchase is made by the intermediary company to the factory and they are the ones that resell to different department stores, such as the Chilean La Polar or in the case of the Polish Discounterra that operates in some European countries.
According to the documents on display, Three years ago La Polar began to bring balances purchased abroad to Chile. For this purpose, they hired former executives of the aforementioned North American brands to teach them and monitor the business model, which in short sought to introduce them to the world of balances.
And it was these executives who gave them the step by step so as not to fall into mistakes and scams. This is why, if you enter the official page of La Polar, the super brands appear, which are mostly balances brought from abroad, they explained from the company, with their respective guides and certificates. They even claim that several of the shipments have come from the United States and not from Pakistan or other countries.
But the road is not easy, explain executives from La Polar. Since the process must go through a series of filters to ensure the authenticity of the garments. And this is why the purchase is not made directly from the factory but through two companies that identify the inventory and also hire another to check the garments and send photos with damages or improliness, something they learned from experience. American, since that is what the world of “balance” is all about.
The issue is that after 3 years exploring the model, which in practice according to reported flows does not correspond to the central axis of the business model but rather represents an attraction to attract different audiences to the stores, Under Armor and Adidas, with their representatives Chileans, sent letters realizing that in the stores “there were counterfeit garments”.
About this The Polar responded to the argument which indicates the law No. 19,039 on Industrial Property in Chilein its article 19 bis e) that states: “The right conferred by the trademark registration does not authorize its owner to prohibit third parties from using it with respect to products legitimately marketed in any country with that trademark by said owner. or with your express consent.
Caso Under Armour
Invoices, emails and purchase orders are the documents that the Investigation Unit had access to in the case of Under Armor brand garments. Those that the department store will use for its defense against the Chilean company Forus, which has the legal representation of Under Armour.
The first thing that is required is the purchase order from Under Armor to the factory (see document 1), in this case Masood Textiles located in Pakistan. In which the products that the sportswear brand gives you are detailed, a list with the coded garments, the color and the sizes of each one.
Document 1:
The next step, and one of the most important, is a letter of deliberation from the factory to the intermediary company, in this case GM Garments (see document 2) in which it is explained that it has permission from the brand to re-export the products.
Document 2:
With the above, you realize the authenticity of the products and that the sale is legal. After this, the detail of the number of units per product is entered (see document 3) and a second company, Global Brands International Corp, comes into play, which is the one that finally makes the purchase with La Polar.
Document 3:
It is only at this stage that La Polar enters directly to purchase from Global Brands International Corp (see document 4). Where the product listing remains the same, with the same code and color of each garment as the original Under Armor international purchase order.
Document 4:
And finally, the fourth company involved in the process is in charge of reviewing the quality of the product, the fabric, if they have any errors or stains in order to send the final shipment to Chile (see document 5 and 6).
Document 5 and 6:
The last step is the entry into Chile of these products, where La Polar complies with everything requested by Chilean law (see document 7).
Document 7:
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