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Nine West Accused of Price-Fixing

January 20, 1999

WHITE PLAINS, N.Y. (AP) _ If that favorite navy pump or black flat never seems to go on sale, a new lawsuit claims to have the explanation of why certain shoe prices stay so high.

A federal class-action suit has been filed against Nine West Group and several large department store chains, claiming they kept prices artificially high for years on 12 brands of women’s shoes.

``The defendants sold millions of pairs of Nine West footwear, at prices inflated by the illegal price-fixing conspiracy,″ according to the lawsuit, filed last week in White Plains, where Nine West is headquartered.

The suit claims that Nine West enforced the price list by threatening to cut off supplies to any retailer who didn’t toe the line. Any violations were reported to the company by ``agents″ from the stores, who spied on each other.

``Nine West and some of the largest department stores in the country have conspired to prevent consumers from getting the economic benefits that the antitrust laws are designed to guarantee,″ said Joshua Rubin, lawyer for the plaintiffs.

Rubin is asking federal Judge Barrington Parker to certify the lawsuit as a class action on behalf of anyone who bought, or considered buying, Nine West models that were on the alleged price-fixing lists between 1988 and the present.

It seeks unspecified damages, plus an injunction against price-fixing agreements.

Nine West is also under investigation by the Federal Trade Commission for price-fixing allegations.

``The law prohibits you from telling a retailer how to market his goods. You can’t tell a retailer not to lower his price,″ said Larry Schulsinger, a partner at the retail consulting firm Management Ventures Inc.

``But manufacturers know that price-cutting hurts the value of brand, and they have reasons to want their brand to continue to command strong prices.″

Calls to Nine West were referred to Chief Financial Officer Bob Galvin, who did not return them.

Nine West, which makes such popular brands as Enzo Angiolini, Bandolino, Easy Spirit, Calvin Klein, Westies and Pappagallo, fits into a niche between designer shoes and discount shoes with prices generally between $50 and $90.

It claims one-fifth of all the shoes sold to women in America. Its shoes are sold primarily in department stores, company-owned retail outlets and independent shoe stores.

According to the suit, Nine West’s top management meets at least four times a year with high-ranking representatives of the retailers that buy their shoes. Minimum prices _ and time periods during which the prices will be enforced _ are agreed upon for the various brands and models, the suit says.

Afterward, it says, ``The department stores and Nine West each monitor the retail prices charged ... by sending agents into other retailers’ stores.″

``Each department store reports to Nine West whenever it learns of any violation,″ the suit says, and then the company enforces the restrictions ``by refusing to sell them its footwear products, by interfering with their advertising programs and by other coercive retaliatory measures.″

Stores named in the suit include Federated Department Stores Inc., which owns Macy’s and Bloomingdale’s, and May Department Stores Co., which owns Lord & Taylor, Dillard’s Inc., Dayton Hudson Corp. and Nordstrom Inc.

Federated has denied involvement in price-fixing. May declined comment. Dayton Hudson did not return calls for comment. Officials at Dillard’s could not be reached.

Nordstrom spokeswoman Brooke White said that the department store will contest the suit and plays ``no part in determining what vendors’ suggested retail prices are.″

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