Bargains in Itaewon May Not All Be Bargains

Athletes, Olympic officials, tourists, and American GIs snake down the crowded sidewalk in the hot noontime sun.

A vendor, selling belts, whispers: “Rolex watch. How about a Rolex watch? Thirty dollars, sir.”

Three steps later, another adds his pitch to the constant din: “Sir, you real tall. I make you suit?”

Welcome to Itaewon, Seoul’s shopping paradise, where prices are low, bargaining for a better deal is a must, and things are not always what they seem.

The main drag is a mix of bars, discos, outdoor market stalls and storefronts. Turn left or right, and its endless alleys are crammed with tailors, luggage dealers, pottery shops, trinket stands and shoe stores. You name it, and Itaewon has it--at prices often 70% lower than in the United States.

A Louis Vuitton bag costing a mere $340 in the United States can be had for $40 in Itaewon. It may be a factory second or an outright fake. But it has the label.

At one stand selling Christian Dior designer sportshirts for $5, the merchant admits: “Yes, these are copies. But they are very good copies. Some of them are better than the originals.”

South Korea’s world dominance in sneaker manufacturing has made Itaewon running shoe heaven for bargain hunters. Some bring empty suitcases to Korea just to haul sneakers back home for family and friends.

On the strip between Yale Brassware and Ariang Shopping Arcade sits Reebok 1, one of three authorized Reebok footwear stores here. A sign taped to the window is scrawled with the words “The Real One.”

The owner, Ree Man Bok, sits at his desk as people browse through shoes, sports bags and jackets. An abacus sits next to his digital calculator.

“Business is very good here in my shop. There are about 50 Reebok stores in Korea,” says Ree, who opened the store four months ago. “Reebok shoes are very popular. Sports are popular now.”

But this afternoon, most people ask the prices of his shoes, then leave.

One pair of men’s Reeboks with blue trim was marked $49. A pair of no-frills white women’s Reeboks were $40. They can be had for slightly less on sale in the United States.

A trip down the street, winding through the alleys, brings a shopper to another shoe shop with the same Reebok models. The men’s pair was bought, after dickering, for $13; the women’s shoes for $9. Such deals are commonplace. For this is a country where labor is cheap and the black market offers deals without taxes or company royalties.

At Reebok headquarters in Canton, Mass., vice president and general counsel Jack Douglas is not pleased by this facet of South Korean business.

The official Reebok stores in Itaewon have higher prices, he says, because his Korean distributor must buy the shoes at the same wholesale price as any other distributor around the world.

“The unauthorized stores in Itaewon are selling shoes that are counterfeit, for the most part. They are built using much cheaper components,” Douglas says.

There is some truth to what Douglas says.

At one low-cost sneaker shop, the friendly, young owner insists he carries genuine Reeboks--but that doesn’t mean all shoppers get them.

“If they want good shoes, I sell Reeboks,” he says, “but not to people who are very cheap. If they want to spend little money, I give them copies.”

Some of the real Reeboks he carries are factory seconds--with blemishes too minor for a bargain hunter to care about.

“I’m not going to tell you that there is not an occasional second, but we buy all factory seconds by contract,” says Douglas. “A factory may be breaching its responsibility in some cases.”

Douglas says he suspects the “knock-offs” and unauthorized originals are made in South Korean factories that are run surreptitiously at night by enterprising businessmen.

“The legal process in Korea is not entirely satisfactory in addressing the situation. If we could sweep them all off the streets tomorrow, we would.

“There is some protection of the local ‘businessman’ who is making a living off our trademark rights. There is a perception on the part of some local authorities that why should a big billion-dollar company like Reebok try to harass a merchant trying to feed his family by selling low-cost imitation shoes that people obviously want to buy?”

Fifteen years ago, Itaewon was just a small village with about 20 shops for American soldiers next door at Yongsan, the 8th Army base. In the past 7 years Itaewon has grown to nearly 1,000 shops.

“Itaewon is joyful,” the shoe merchant says as the cash register rings.”Sometimes business is good, sometimes it can get angry. But it is all the time joyful.”