Watch for our article the day after each event!




September 8, 2011
NRF-Investigator's Network Meeting
San Bruno, CA

 

Hurricane Irene Impact –

Hurricane Irene is estimated to cost $20 to $25 billion in lost retail sales and 80 million lost customers.  (Source mymag.com)

Food Lion grocery stores still have 50 stores closed because of Hurricane Irene and at one point had 350 closed due to power outages.  (Source supermarketnews.com)

Together Home Depot and Lowes sent over 1,000 trucks to stores in the hurricane zone and some of their vendors were asked to ship items like plywood and water directly to the stores.  Analysts expect both chains to receive a 1% bump in their third-quarter results as a result of Hurricane Irene sales.  (Source retailingtoday.com)

Updated figures released by federal officials on Monday showed 6,500 cell towers and sites were damaged or disrupted as a result of Hurricane Irene. That number includes about 44% of all cell sites in Vermont, which suffered massive flooding that cut off dozens of towns.  (Source csoonline.com)

Three million in 13 states remain without power along the Eastern Seaboard and 40 lives were lost.  (Source Associated Press)
 

Special Report:

WikiLeaks cables show Apple's actual counterfeit security team internal documents detailing their struggle and battle with counterfeiting in China!

"Apple was slow to act against the booming counterfeit industry in China and other Asian countries, according to cables obtained by WikiLeaks.  The technology giant eventually organized a team in March 2008 to curtail the explosion of knockoff iPods and iPhones, according to an electronic memo from the Beijing embassy dated September 2008.  Yet, three years after Apple moved to crack down on widespread counterfeiting and put pressure on China, progress has been slow. Gadget piracy isn't a high priority for the Chinese government, the U.S. reports and experts say.

Members of Apple's recently formed global security team were recruited from Pfizer after they executed a series of crackdowns on counterfeit Viagra production in Asia, the report says.  John Theriault, formerly Pfizer's security chief and, before that, a special agent for the Federal Bureau of Investigation, leads Apple's global security unit. Don Shruhan, who worked for Theriault at Pfizer, is now a director on Apple's security team in Hong Kong.  Shruhan told the Beijing embassy official that his group at Pfizer spent five years planning raids on counterfeit drug rings, the cable says. He said he's "afraid" of the volume of imitation Apple products being produced in China and about the inexperience of Apple's lawyers in dealing with Chinese authorities, the report says.

An Apple spokeswoman declined to comment. A Pfizer spokeswoman, who declined to comment on personnel matters, said the company has a strong global security team to handle the increase in counterfeit medicine worldwide.  WikiLeaks, a group that publishes private government documents, posted tens of thousands of previously unreleased U.S. diplomatic cables last week. The reports from the Beijing embassy detailing Apple's piracy crackdown were unclassified, but many were described as "sensitive" and "not for Internet distribution."

In December, Apple said it removed an application from its mobile store that let people browse WikiLeaks documents from their iPhones "because it violated developer guidelines." The company suggested that the app broke laws or could be harmful to people, but many free-speech advocates cried censorship, as they have in the past when Apple has pulled apps.  The fresh WikiLeaks documents shed new light on Apple's struggles with intellectual-property theft in China, but the subject hasn't completely flown under the radar.

Last month, international news media were rapt after discovering that China is home not only to fake Apple gadgets, but also to imitation Apple stores which had many of Apple's signatures. The Chinese government ordered two of the five unofficial stores to close because they had not secured proper business permits, but a spokesman for China's Kunming government defended the others, saying they sell authentic Apple merchandise, according to Reuters.  Apple owns and operates four stores in China. The three in Beijing and the one in Shanghai are Apple's highest trafficked and top grossing stores in the world, Peter Oppenheimer, Apple's financial chief, said in an earnings call in January.  But the hunger for Apple products is insatiable there. That's why stores have begun to sell the products without Apple's permission, while others are hawking cheaper, lower-quality gadgets that are aesthetically similar and bear the chic Apple logo.

China's Guangdong province, the country's most populous region, has become a hub for manufacturing and selling of counterfeit Apple products, two of the newly surfaced cables say. The Foxconn Technology Group, which assembles products for Apple, operates factories in Guangdong.  Workers typically smuggle parts from the facilities in order to make replicas, said Lilach Nachum, an international business professor for Baruch College in New York who travels frequently to Asia. It's the cost of doing business in China, where many American companies go for inexpensive labor and efficient industrial plants, she said.  "Not to go to China is not really an option," Nachum said. "Companies cannot afford to do that.  No one can afford to do that."

China's counterfeiting ring is responsible for supplying India with fake Apple products, the 2008 cable says.  In raids, Indian officials uncovered shipments that had moved from China through Hong Kong, the report says.

Apple's early plans to go after counterfeiters, according to a cable, involved first targeting offending retailers and street vendors; next, Apple would work with police to raid manufacturing facilities; and finally, the company would pursue online resellers.  The plans closely resemble Pfizer's successful strategy, the cable says, citing Shruhan, the Apple director.  "Shruhan said that low-profile retail raids are a good option for Apple, a company that wants to stay away from too much publicity surrounding this issue," the cable says.  Theriault, Shruhan's boss, briefed Steve Jobs, then CEO, on the plans in 2008, the cable says.

But Apple is having limited success.  In countless stores and at tables setup on streets, merchants purporting to sell iPods, iPhones and iPads at deeply discounted prices are prevalent, said Wini Chen, a student in San Francisco who recently returned from studying abroad in Beijing.  "They'll say, 'Yeah, we have iPad.  We'll give you a really good deal'," Chen recalled from her shopping trips. "If I really want to buy a knockoff Apple product, I could probably do that in 15 minutes."

Chinese officials readily cooperated with pharmaceutical companies on their raids, but that hasn't translated to software, as Microsoft has discovered, or electronics, as Apple is learning, said Nachum, the professor. Whereas a defective pill could cause sickness or death, a shoddy iPod has less dire consequences.  Apple had planned to strengthen its case with the government by arguing that defective batteries could blow up and injure people, and that lost tax revenue could have a significant economic impact, the cable says.  The arguments weren't very effective.  China's government declined to investigate a facility in March 2009 that was manufacturing imitation Apple laptops because it threatened local jobs, says a cable dated April 2009.  A different arm of China's government scrapped plans for a raid on an electronics mall in the Guangdong province because it could have driven away shoppers, the cable says.  (Source cnn.com)

WikiLeaks and Anonymous are out there watching and waiting and who they target next is anyone's guess.   Leave it to say that as Loss Prevention executives, we have a responsibility to make sure our organizations and our information is protected.  From making political donations – taking stands on certain issues – profiling – facial recognition – any sensitive information has the risk of being WikiLeaked, especially from disgruntled former or current employees.  Have you tightened up your information channels and controls on departing employees recently? And are you monitoring your corporate employee population for signs of possible leaks? 

Who'll be the next WikiLeaked?
 

Flash Mob News –

The Flash Mob response of shutting down cell service by San Francisco's Bay Area Transit (BART) a few weeks ago to stop protesters from organizing and creating a "civil disturbance" and to "ensure safety" may result in an FCC ruling that could have long-term impact on this technique.  An emergency petition filed by a number of digital rights groups asks the FCC to rule immediately so that other government agencies don't try to copy BART's tactics.  BART appears ready to shut down mobile phone service again for similar reasons, the groups said.  "The petition isn't really about punishing BART so much as making sure that this sort of problem won't arise in the future," Siy said. "We hope that the FCC will clarify for other local authorities around the country that shutting off cell service isn't just a bad idea, it's also against the law.  BART's actions are a violation of established U.S. law, "plain and simple," Siy said. The Communications Act says telephone carriers and their agents cannot "discontinue, reduce, or impair service to a community, or part of a community" without FCC approval.  (Source csoonline.com)

As a result of the recent 7-11, well publicized, Mob theft incident in Montgomery County, Md., lawmakers are considering introducing legislation that specifically addresses crimes committed as part of a mob.  Officials declined to label the Germantown incident, which lasted just about a minute and was captured on surveillance video, a "flash mob" because it was not organized online or via social networking.  "This was not organized by a tweet [or on] Facebook," Montgomery County State's Attorney John McCarthy said. "It was something more dynamic and occurred on the walk from the bus station to the 7-Eleven."  In addition to the possibility of a new mob law, police say a youth curfew, which is already under discussion by the County Council, may have prevented the incident.  (Source washingtontimes.com)