810386

UNITED STATES OF AMERICA
BEFORE FEDERAL TRADE COMMISSION

In the Matter of

NINE WEST GROUP INC., a corporation.

DOCKET NO. C-3937

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act (15 U.S.C. § 41 et seq.), and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Nine West Group Inc. (hereinafter "Respondent" or "Nine West"), has violated the provisions of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues this complaint stating its charges as follows:

RESPONDENT

1. Respondent Nine West Group Inc. is a corporation organized, existing and doing business under and by virtue of the laws of the State of Delaware, with its principal place of business located at Nine West Plaza, 1129 Westchester Avenue, White Plains, New York 10604-3529, and includes its parent, Jones Apparel Group, Inc., and their affiliates, subsidiaries, divisions and organizational units of any kind, their successors and assigns and their present officers, directors, employees, agents, representatives and other persons acting on their behalf.

2. Respondent is now, and for some time has been, engaged in the offering for sale, sale, and distribution of women's footwear to retail dealers located throughout the United States, including many of the nation's largest retail chains.

JURISDICTION

3. Respondent is a "corporation" within the meaning of Section 4 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 44.

4. Respondent maintains and has maintained a substantial course of business, including the acts or practices alleged in the complaint, which are in or affecting commerce within the meaning of Section 5 of the Federal Trade Commission Act, as amended, 15 U.S.C. § 45.

RESPONDENT'S ACTS
IN COMBINATION WITH CERTAIN OF ITS DEALERS

5. In connection with the sale and distribution of Nine West branded products, Respondent, in combination, agreement and understanding with certain of its dealers, beginning in January 1988 and continuing thereafter until at least July 31, 1999, engaged in unlawful contracts, combinations, or agreements, in unreasonable restraint of interstate trade and commerce.

6. The combinations and contracts consisted of continuing agreements, understandings or concert of action among Respondent and certain of its dealers, the substantial terms of which were to fix, raise, maintain or stabilize the retail prices at which Nine West products were advertised and sold to the consuming public.

7. For the purpose of forming, effectuating and furthering the unlawful contracts, combinations or agreements, the Respondent and certain of its dealers did, among other things, the following:

a. Various Nine West divisions adopted pricing policies governing the retail sale of Nine West products and distributed "off limits" or "non-promote" lists of shoes, including shoes that could not be promoted outside of defined periods of time, called "clearance windows" or "breakdates." In doing so, Nine West did seek acquiescence in and threatened and initiated enforcement actions to enforce those policies. Retailers communicated to Nine West their agreement to adhere to these pricing policies.

b. Nine West shared revisions of its pricing policies, such as updated "off limits" or "non-promote" lists, with certain of its dealers prior to implementation of such revised policies for the purpose of soliciting input as to shoes that should, or should not, be included on the revised lists.

c. Nine West added or removed shoes from the coverage of its pricing policies at the request of its dealers.

d. Nine West added/extended or removed/limited "clearance windows" or "breakdates" for shoes covered by its pricing policies at the request of its dealers.

 

e. Nine West negotiated individualized exemptions from the coverage of its pricing policies for certain of its dealers. Nine West often conditioned its agreement in these cases on the condition that the dealer would not advertise the newly-negotiated retail price.

 

f. Nine West received complaints from dealers regarding other dealers' violation of Nine West's pricing policies. Nine West responded to violations of its pricing policies by some of its dealers in a number of different ways. For example, Nine West suspended shipments to violating dealers for a limited period, with the tacit understanding that shipments would resume if Nine West discovered no further violation of the policy in the interim, or if the dealer promised not to violate the policy again in the future. Dealers communicated to Nine West their acquiescence to Nine West's pricing policies.

EFFECTS

8. The purpose, effect, tendency, or capacity of the acts and practices described in Paragraphs 5, 6, and 7 has been to restrain trade unreasonably and to hinder competition in the sale of women's footwear in the United States, and to deprive consumers of the benefits of competition in the following ways, among others:

a. Prices to consumers of Nine West products have been increased, or have been prevented from falling; and

 

b. Price competition among retail dealers with respect to the sale of Nine West products has been restricted.

VIOLATION ALLEGED

9. The aforesaid acts and practices constitute unfair methods of competition in or affecting commerce in violation of Section 5 of the Federal Trade Commission Act, 15 U.S.C. § 45. These acts and practices are continuing and will continue in the absence of the relief requested.

IN WITNESS THEREOF, the Federal Trade Commission on this eleventh day of April, 2000, issues its complaint against said Respondent.

By the Commission.

Donald S. Clark
Secretary

SEAL: