Lilian Engelmann never thought she would see neo-Nazis on her block. The young art curator works in a gallery in the trendy district of Mitte, a neighborhood in central Berlin. Her neighbors include an international cinema, designer hat store, Vietnamese restaurant and -- as of last February -- a store called Tönsberg, which sells clothing popular among right-wing extremists.

"By coming here, the neo-Nazis tried to come into the center of society," Engelmann told SPIEGEL ONLINE. Once local residents and shopowners learned that Tönsberg planned to sell the clothing brand Thor Steinar, they organized against the store. The group led by Engelmann and other shopowners called itself the "Mitte Initiative Against the Far Right," and mounted regular protests.

Neo-Nazis are a fringe group in Germany, where Holocaust denial, praise of Adolf Hitler and the display of Nazi symbols are all illegal. The Office for the Protection of the Constitution, the government's domestic intelligence agency, estimates there are about 40,000 active members of the German far right. The agency can shut down Kameradschaften, gangs or brotherhoods which tend to be violent, but many other groups in the neo-Nazi scene often fly under the legal radar -- like rock bands with suggestive lyrics or stylish clothing companies with coded symbols. As long as they don't display swastikas or explicitly support Hitler or his party, these groups are left alone.

Do These Sneakers Make Me Look Neo-Nazi?

Thor Steinar goods were banned in 2004 because of the logo's similarity to symbols worn by SS officers. But the company has rebranded, and its new look is legal. This presents a dilemma for Engelmann's group. Symbols and speech not obviously related to Nazism are protected by German law. So instead of trying to run the store out, her group decided to educate passersby about Tönsberg.

The group won permission from authorities in Mitte to set up a public display detailing the history of the Holocaust, the recent far right scene and neo-Nazi symbols and culture. Three tall boxes plastered with dossiers dot Rosa-Luxemburg Street in Berlin, where Engelmann's gallery stands near Tönsberg.

"We've had people come in and ask, 'If I buy these sneakers, are they sending neo-Nazi signals?'" said Engelmann. "People have a better idea of what kind of store it is."

"People" includes passersby, but also landlords. On Oct. 14, a Berlin court ruled that Tönsberg's landlord was allowed to kick the store out because Tönsberg had failed to fully disclose what types of products it would sell. A similar court decision on Oct. 28 will clear out a store selling Thor Steinar clothing in Magdeburg, a city in eastern Germany. A Hamburg store shut down in early October after protests. Three further stores in Germany sell Thor Steinar goods, but a legal decision on one of them, in Leipzig, is pending.

The brand also stirred a recent controversy in Berlin after a plainclothes policeman wore a Thor Steinar shirt while on duty at a demonstration to mark the anniversary of Kristallnacht -- the Nazi-orchestrated pogroms that swept Germany on November 9, 1938. Dieter Glietsch, head of police in Berlin, said ignorance of the brand was not an excuse. "That a police officer walks around wearing Thor Steinar clothes during the anniversary of the pogrom calls for a thorough investigation," he told the Tagesspiegel newspaper. "It is not as if in Berlin people don't know what the label stands for."

Still, the far right isn't as recognizable as it used to be. Only old-school neo-Nazis shave their heads and tie up their black boots with white laces. Among the younger crowd, a new look is in. Even Engelmann describes Thor Steinar designs as "stylish and fitted," and sometimes its logos are all that set it apart from other casual sportswear.

Mixed Messages

Many of the symbols are straightforward. On one Thor Steinar T-shirt, the word kontaktfreudig is splashed across red splotches that look like spatters of blood. The word could be translated as "outgoing," or more literally, "happy to make contact." The display on Rosa-Luxemburg Street includes clothing with common symbols like an eagle for German pride, or "18" and "88" for "Adolf Hitler" and "Heil Hitler" -- numbers freighted with meaning because of the position of the initials in the alphabet.

Some mainstream clothing companies also hold significance for neo-Nazis. Shirts from the British company Lonsdale, covered in jackets unzipped to display the "NS" -- for National Socialism -- have a meaning in Germany that would go unnoticed in Britain or the United States. The German far right likes the "N" on New Balance shoes for the same reason.

But Thor Steinar is hardly a mainstream brand appropriated by a few extreme customers. The German company "is demonstrably for the scene, by the scene," said Esther Lehnert at the Mobile Counseling Team Berlin, a non-profit that identifies trends in the German far right. Part of Lehnert's job is to instruct teachers in how to identify and reach out to students who may become involved in neo-Nazism. She describes an alarming uptick in youth participation in what's become a "trendy culture."

"They are getting harder to spot," she said, taking a picture out of a folder showing far-right and far-left activists facing off at a march. Both groups wore Che Guevara T-shirts and checked scarves -- long a leftist symbol of solidarity with Palestinians. But the far right co-opted both symbols, she explained, just as neo-Nazis have taken to wearing all black, which used to be an anarchist fashion statement.

Guevara may be the strangest appropriation of all. Neo-Nazis wear his image but don't hesitate to beat up people who look different -- including Latin Americans.

'It's Just a Fashion Label'

Neo-Nazis have been a long-term embarrassment for the German government, which had to beef up security during the 2006 World Cup because of safety concerns for non-white spectators and players. And Germany's domestic intelligence agency describes Thor Steinar as "an identifying mark for right-wing extremists." So why not simply shut the company down?

"It's just a fashion label," a spokesperson for the Office for the Protection of the Constitution told SPIEGEL ONLINE. "We are only watching which symbols they use, to make sure they are not illegal."

The agency has reason to be cautious after its implication in a disastrous effort to outlaw the far right National Democratic Party (NPD) in 2003. Germany's highest court dismissed the case after finding out that important witnesses for the prosecution -- including the NPD head for the state of North Rhine-Westphalia -- worked as informants for the agency. The Federal Constitutional Court ruled that it couldn't ban a party whose policies might have been cast, in part, by government agents.

So groups like Engelmann's are left the task of combating the scene on the local level, and making sure the public knows what neo-Nazis are doing. Thor Steinar has been kicked out of a number of locations, but there is no telling where they will crop up next.