Lord & Taylor

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IN THE MATTER OF I LORD & TAYLOR, DIDERMAN DROS., INC., AND GALEY & LORD, INC., ~COMPLAINT, FINDINGS, AND ORDER IN REGARD TO THE .ALLEGED VIOLATION OF SEC. 5 OF AN ACT OF CONGRESS APPROVED SEPT. 26, 1914 Docket 8141. Complaint, July 21, 1937 '-Decisi(}n, Mar. 11, 1988 '\\>here three corporations, respectively engaged as retailer of coats, dresses, l"obes, and other items of wearing apparel, manufacturer of dresses for sale a.nd distribution to department and retail stores, and commission house converter and seller of fabrics to the cutting trade; in cooperatively advertising, in newspapers and leaflets, dresses made hy aforesaid corporate manufacturer, of said converter's fabrics, of material other than silk, product of cocoon of the silk worm- (a) Made use of such words as "Crepe," "Seal Crepe," "silky," and "Pure.Dye," through such statements in newspaper advertising as "Soft, silky Seal Crepe, woven from Enka Yarns and printed with charming motifs • • •", and substantially similarly used said words in leaflets describing said garments, and tagged said dresses for offer and sale by said corporate t('t.ailer as ""' • "' made from SEAL CREPE, Fast Color, Pure Dye • • • AmPrlcan ENKA," and on reverse side advised reader or customer that "For best results on seal CREPE we r!'comm!'nd dry cleaning"; and Wb{>re said corporate retailer, In newspnp!'r advertising soliciting sale of certain pajama robes and dresses, some of which were composed wholly of other and different materials than silk, product of cocoon of the silk worm- ( b) Described same, respectively, as "Silk Rob{>s-Rich Brocades, all silk-lined. • • • Silk Facings and Trims in All robes," and as "Satin"; \V'itb capacity and tendency to mislead and decei\·e substantial portion of pur- ('basing public into erroneous belief that said various garments were made from silk, product of the cocoon of the silk worm, and unfairly to divert trade to said corporations from their comp!'titors engaged in sale of dresses, E>tc., and who accurately describe and brand their said products by terms Propprly descriptive of fabric cont!'nt thereof, notwithstanding absence of intent to mislead and deceive in such mistaken designation of said robes and use of other terms as accurately and truthfully describing materials from which garments were made; to substantial injury of competition in commerce:

lield, That such acts and practices were to the prejudice of the public and competitors and constituted unfair ID{>thods of competition. Before Mr. lV. lV. Sheppard, trial examiner. ·lfr. Astor Ilogg and Mr. George lV. William-s for the Commission. Gould&: Wilkie, of New York City, for Lord & Taylor. -Vr. Erwin Feldman, of New York City, for Biberman Dros., Inc. G Da1•is, Polk, lVardu·ell, Gardvner & Reed, of New York City, for aley & Lord, Inc.

1.&.lll!'ndec!.---- 91~ FEDERAL TRADF COMMISSION DECISIONS Complaint 2GF.T. C.

AMENDED Complaint Pursuant to the provisions of an Act of Congress approved September 26, 1914, entitled "An Act to create a Federal Trade Conlmission, to define its powers and duties, and for other purposes," the Federal Trade Commission having reason to believe that Lord & Taylor, Biberman Bros., Inc., and Galey & Lord, Inc., corporations, hereinafter referred to as respondents, have been and now are using unfair methods of competition in commerce, as "commerce" is defined in said act, and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issue:> its amended complaint stating its charges in that respect as follows: PARAGRAPH 1. Respondent, Lord & Taylor, is a corporation organjzed, existing, and doing business under and by virtue.~ of the laws of the State of New York with its principal office and place of business located on Fifth Avenue at 38th Street in the city of New York iit said State. It is now, and for many years last past has been, engage~ in business as a retailer of coats, dresses, robes, and other items of wearing apparel. It sells, and has sold and distributed, such articles of merchandise to members of the purchasing public located in various States of the United States and in the District of Columbia. Respondent, Diberman Bros., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the Stat~ of Pennsylvania, with its principal office and place of business locat~ at 15th and Mt. Vernon Street in the city of Philadelphia, State ot Pennsylvania, and with a sules office located in the city of New York, State of New York. It is engaged in business as a manufacturer ~f dresses which it sells and distributes to department stores and ret~Il stores located in the various States of the United States. Respondent, Galey & Lord, Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the Stat~ of New York with its principal office and place of business located at 57 1Vorth Street, in the city of New York in said State. It is noWr and has been for several years last past, engaged in business as a cotnmission house in converting and selling dress fabrics to the cutting' trade located in various States of the United States. Respondents now cause, and during the time herein mentioned ha:ve caused, their articles of merchandise when sold to be shipped frotn their respective places of business to the purchase.rs thereof located in the various States of the United States other than the States of origin of such shipments. There is now, and has been at all tiii1~ 5 mentioned herein, a constant current of trade and commerce by sal~ respondents in their respective products between and among the vallous States of the United States.

LORD & TAYLOR, ET AL. 913 Complaint Rt>spondents are now, and at all times herein mentioned have been, in substantial competition with other corporations and with firms, Partnerships, and individuals engaged in the sale and distribution of wearing apparel, dresses, robes, and dress fabrics in commerce between and among the various States of the United States and in the District of Columbia.

PAR. 2. In the course and conduct of business as described in paragraph 1 hereof, respondent, Lord & Taylor, purchased and now fJUtchases certain of the dresses offered for sale and sold by it in <'otnmerce as set out in paragraph 1 hereof from the manufacturer thereof, respondent Diberman Bros., Inc. The latter concern, in turn, Purchased and now purchases the fabric from which said dresses were lnade from respondent, Galey & Lord, Inc. To aid and facilitate the sale of said dresses, the said Lord & Taylor, with the aid, assistance, and cooperation of said Diberman Bros., Inc., and the said Galey & Lord, Inc., caused and now causes advertising matter to be inserted 0"er the name of Lord & Taylor in newspapers having interstate cir- {:lJla.tion and in which advertising matter said dresses were represented, designated and referred to as "Soft, silky Seal Crepe, woven from Enka Yarns and printed with charming motifs • * *." The said respondents, acting in cooperation each with the other, also <'aused and now cause a substantial number of leaflets to be distrib- ~ited to customers and prospective customers located in various States of the United States and which leaflets referred to such dresses in the following language:

Lovely colors-new, different looking prints on that marvelously soft, silky Seal Cr{'pe--woven from Enka Yarns ~aid dresses displ:tyed and offered £or sale by the said Lord & Taylor ear tags and labels placed upon the dresses of respondents in coop- (>ration with each other on which were printed the statement: This Garment is made from SEAL CREPE Fast Color, Pure Dye Unweight{'d and washable Made Enka From Yarn American ENKA ana the reverse side reads :

A L' Alglon Frock For best results on SEAL CREPE we recommend dry cl{'aning.

914 FEDERAL TRADE COl\Il\IISSION DECISIONS Complaint 213 1<'. T. C;- The said dresses advertised a.nd tagged by said respondents ~ting cooperatively each with the other, as hereinabove set forth, were and are offered for sale and sold by the said Lord & Taylor in commerce as set forth in paragraph 1 hereof. Such statements and representations served and now serve as representations on the part of respondents that such dresses so advertised and offered for sale were silk dresses.

The representations hereinbefore set forth are and were grossly false and misleading in that said dresses so represented, designated, and referred to are not and were not composed of silk, the product of the cocoon of the silk worm, but were composed of materials other than silk.

PAR. 3. Respondent Lord & Taylor, in soliciting the sale of and selling certain pajama robes .in commerce as in paragraph 1 here of, set out, caused and now eauses said pajama robes to be adver· tised in newspapers having interstate circulation as "Silk Robes-- Rich Brocades, all silk-lined. A Variety of Handsome Patterns and a Good Color Range. Silk Facings and Trims in All Robes." Also respondent Lord & Taylor in soliciting the sale of and selling cer t.ain dresses in commerce as in paragraph 1 hereof, set out, caused and now causes, such dresses to be advertised in newspapers having interstate circulation as "Satin" dresses. In truth and in fact, the said robes and dresses so represented and designated contain no silk~ the product of the cocoon of the silk worm, but are composed wholly of other and different materials.

PAR. 4. The word "Silk" for many years past has had, and still has, in the minds of the consuming public a definite and specificr meaning, to-wit: the product of the cocoon of the silk worm. Silk fabrics for many years have held and still hold great public esteelll and confidence for their preeminent qualities. Silk fiber has long been woven into a variety of fabrics, and a variety of distincti-v-e terms has been applied to the fabrics resulting from different types of weaving. Dress goods, pajama robes and other similar products1 designated, described or referred to as "Silk," "Silky," "Crepe,' "Satin," "Pure Dye," and "Seal Crepe" have been for n long time, and at the present time still are, associated in the public mind with a fabric made from the cocoon of the silk worm, commonly know11 and understood by the public as silk.

PAR. 5. The use by respondents of the representations set forth herein has had, and now has, the capacity and tendency to mislead and deceive a substantial portion of the purchasing public into the erroneous belief that such representations are true and to cause them to purchase such dresses and pajama robes on account of such LORD & TAYLOR, ET AL. 915 911 Findiugs erroneous beliefs engendered as above set forth. There are among the competitors of respondents as mentioned in paragraph 1 hereof corporations, imlividuaJs, partnerships, and firms engaged in the sale of dresses and pajama robes and other items of wearing apparel who do not misrepresent the kind of dresses, pajama robes, and other items of wearing apparel offered for sale. By the representations aforesaid, trade is unfairly diverted to respondents from such competitors and thereby substantial injury is being and has been done by respondents to competition in commerce as herein set out. PAn. 6. The above alleged acts and practices of respondents are all to the injury and prejudice of the public anti of respondents' com- }letitors and constitute unfair methods of competition in conunerce \Within the intent and meaning of Section 5 of an Act of Congress entitled "An Act to create a Federal Trade Commission, to define its powers and duties, and for other purposes," approved September 26, 1914. . l:EPORT, FINDINGS AS 1'0 THE FACTS, AND ORDER Pursuant to the provisions of an Act of Congress, approved September 26, HJ14, entitled "An Act to create a Federal Trade Comlnission, to define its powers and duties, and for other purposes,'' the Federal Trade Commission on July 21, 1937, issued and subsequently served its complaint in this proceeding upon respondents Lord & Taylor, EiLerman Bros., Inc., and Galey & Lord, Inc., charging !helll with the use of unfair methods of competition in commerce 111 violation of the provisions of said act. After the issuance of said complaint and the filing of respondents' answers thereto, ·w. T. Relley, Chief Counsel for the Federal Trade Commission, and Gould <~Wilkie, Davis, Polk, 'Vardwell, Gardiner & Reed, and Erwin Feldtnan, counsel for respondents, executed a stipulation as to the facts Wherein it was agreed that the statement of facts therein recited li1ight Le taken as the facts in this proceeding and in lieu of testi- ~ony in support of the charges stated in the complaint or in oppo- Sltion thereto, and that the Commission might proceed upon such statement of facts to make its report, stating its findings as to the :acts (including inferences which it may draw from the said stipu- ~ted facts) :md its conclusion based thereon, and enter its order disposing of the proceeding without the presentation of argument or the filing of briefs. Said stipulation as to the facts was subse- ~uently approved by the Commission and was duly recorded and filed ~n the office of the Commission. Thereafter the proceeding reguar}y came on for final hearing before the Commission on said coml)laint, the answer thereto and said stipulation as to the facts; and Findings 26F.T.O.

the Commission, having duly considered the same and being now fully advised in the premises, finds that this proceeding is in the interest of the public and makes this its findings as to the facts and its conclusion drawn therefrom:

FINDINGS AS TO THE FACTS PARAGRAPH 1. Respondent, Lord & Taylor, is a corporation organized, existing, and doing business under and by virtue of the laws of the State of New York with its principal office and place of business located on Fifth Avenue at 38th Street in the city of New York in said State. It is now, and for many years last past has been, engaged in business as a retailer of coats, dresses, robes, and other items of wearing apparel. It sells, and has sold and distributed, such articles of merchandise to members of the purchasing public located in various States of the United States and in the District of Columbia.

Respondent, Diberman Dros., Inc., is a corporation organized, existing, and doing business under and by virtue of the laws of the State of Pennsylvania, with its principal office and place of business located at 15th and Mt. Vernon Street in the city of Philadelphia, State of Pennsylvania, and with a sales office located in the city of New York, State of New York. It is engaged in business as a manufacturer of dresses which it sells and distributes to department stores and retail stores located in the various States of the United States.

Respondent, Galey & Lord, Inc., is a corporation organized, ex· isting, and doing business under and by virtue of the laws of the State of New York with its principal office and place of business located at 57 'Vorth Street, in the city of New York in said State. It is now, and has been for several years last past, engaged in business as a commission house in converting and selling fabrics to the cutting trade located in various States of the United States. Respondents caused said articles of merchandise when sold to be shipped from their respective places of business to the purchasers thereof located in the various States of the United States other thall the State where the shipments originate. There is now, and bas been for the several years last past, a constant current of trade and commerce by said respondents in their respective products between and among the various States of the United States. Respondents are now, and at all times herein mentioned have been, in substantial competition with other corporations and with firms, partnerships, nnd individuals engaged in the sale and distribution of wearing apparel, dresses, robes, and dress fabrics in commerce LORD & TAYLOR, ET AL. 917 Findings between and amo11g the nrious States of the United States and in the District of Columbia.

PAn. 2. In the course and conduct of business as described in paragraph 1 hereof, respondent, Lord & Taylor, purchased and now purchases certain of the dresses offered for sale and sold by it in comrnerce as set out in paragraph 1 hereof from the manufacturer thf>reof, respondent Biberman Bros., Inc. The latter concern, in turn, purchased and now purchases the fabric from which said dresses were made from rrsponuent, Galey & Lord, Inc. To aid and facilitate the sale of said dresses, the said Lord & Taylor, with the aid, assistance, and cooperation of said Biberman Bros., Inc., and the said Galey & Lord, Inc., caused advertising matter to be inserted over the name of Lord & Taylor in newspapers having interstate circulation and in which advertising matter said dresses were represented, designated, and referred to as "Soft, silky Seal Qrepe, ''•oven from Enka Yarns and printed with charming motifs • • * ~' 1'he said respondents, Lord & Taylor and Biberman Bros., Inc., acting in cooperation with each other, also caused a substantial number of leaflets to be distributed to customers and prospective customers located in various States of the United States and which leaflets referred to such dresses in the following language: Lovely colors-new, different looking prints on that marvelously soft, silky Seal Crepe--women from Enka Yarns Said dresses displayed and offered for sale by the said Lord & Taylor bore tags and labels placed upon the dresses by the respondents in <'ooperation with each other on which were printed the statement: This Garment is made from SEAL CREPE Fast Color, Pure Dye Unweighted and washable Made ~nl{a From Yarn American ENKA and the reverse side reads:

A L'Aiglon Frock For best results on SEAL CREPE we recommend dry cleaning.

1'he said dresses advertised and tagged by said respondents acting <'~operath·ely each with the other, as hereinabove set forth, were 0 ered for sale and sold by the said Lord & Taylor in commerce as set forth in paragraph 1 hereof.

Findings 26F.T.C.

Said dresses so represented, designated and referred to were not composed of silk, the product of the cocoon of the silkworm, but were composed of materials other than silk. PAR. 3. Respondent Lord & Taylor, in soliciting the sale of and selling certain pajama robes in commerce as in paragraph 1 hereof set out, caused said pajama robes to be advertised in newspapers hav· ing interstate circulation as "Silk Robes-Rich Brocades, all silk· lined. A Variety of Handsome Patterns and a Good Color Range. Silk Facings and Trims in All robes." Also respondent Lord & Taylor in soliciting the sale of and selling certain dresses in c01n· merce as in paragraph 1 hereof set out, caused such dresses to be advertised in newspapers having interstate circulation as "Satin" dresses. In truth and in fact, some of said robes and dresses so represented and designated contained no silk, the product of the cocoon of the silkworm, but were composed wholly of other and different materials.

PAR. 4. Silk fabrics for many years have held, and still hold, great public esteem and confidence for their preeminent qualities; silk fiber has long been woven into a variety of fabrics, and a variety of distinctive terms has been applied to the fabrics resulting from this type of weaving; dress goods, pajamas, robes, and other similar prod· ucts designated, described or referred to as "Silk," "Silky," and "Pure Dye," when used to designate and describe the material frolll which a garment is made, and the words "Crepe,:' "Satin" and "Seal Crepe," when used alone to designate and describe the material from which a garment is made, have been for a long time, and at the present time still are, associated in the public mind with the materia.l made :from the cocoon of the silkworm, commonly known and under· stood by the public as silk.

PAR. 5. Respondent Lord & Taylor, in designating and describ· ing certain of its robes as "Silk Robes-Rich Brocades, all silk-lined· A Variety of Handsome Patterns and a Good Color Range. Sillt Facings and Trims in All robes", as set out in paragraph 3 hereof, did so through mistake and not through any intent to mislead and deceive the purchasing public.

In all the other instances herein mentioned, wherein the other terms hereinabove set out were used by respondents, all of said respondents believed that said terms and designations accurately and truthfully described the material from which the garments were made.

PAR. 6. The use by the respondents o£ the representations abo'\'e set forth in describing the materials from which said garments were made had the capacity and tendency to mislead and deceive a sub· LORD & TAYLOR, ET AL. 919 Order stantial portion of the purchasing public into the erroneous belief that said garments were made from silk, the product of the cocoon of the silkworm, and to cause them to purchase such articles on ~account of such erroneous beliefs.

There are among the competitors of the respondents corporations, individuals, partnerships, and firms engaged in the sale of dresses, Pajama robes, and other items of wearing apparel who accurately <lescribe and brand such products by terms properly descriptive of the fabric content thereof. The representations made by respondents as aforesaid had the capacity and tendency unfairly to divert trade to respondents from their said competitors. Thereby, sub- ~tantial injury is being done and has been done by the respondents to competition in commerce as herein set out. CONCLUSION The aforesaid acts and practices of respondents Lord & Taylor, l3iberman Bros., Inc., and Galey & Lord, Inc., are to the prejudice of the public and of respondents' competitors and constitute unfair methods of competition in commerce within the intent and meaning <:>f Section 5 of an Act of Congress, approved September 26, 1914, ~ntitied "An Act to create a Federal Trade Commission, to define lts powers and duties, and for other purposes." ORDER TO CEASE AND DESIST .This proceeding having been heard by the Federal Trade Coml"nission upon the com}illaint of the Commission, the answers of the ~spondents and a stipulation as to the facts executed by ,V. T. elley, Chief Counsel for the Federal Trade Commission, and ~ou}d & lVilkie, Davis, Polk, 'Vardwell, Gardiner & Reed, and Erwin 'eldznan, counsel for respondents, the filing of briefs having been "-'waived, and the Commission having made its findings as to the facts and its conclusion that said respondents have violated the provisions an Act of Congress, approved September 26, 1914, entitled "An1 Q ct. to create a Federal Trade Commission, to define its powers and llbes, anu for other purposes."

l It i8 ordered, That respondents Lord & Taylor, Biberman Bros., nc., and Galey & Lord, Inc., their officers, representatiws, agents, :~d e~ployees in connection with the offering for sale, sale, and disf!bubon of their merchandise, dress goods, and garments in inter- State commerce or in the District of Columbia, do forthwith cease and desist from:

1. Using the word or words "Crepe," "Seal Crepe," or any other ~ord or words of similar import or meaning to describe or designate 920 FEDERAL TP..ADE COMMISSION DECISIONS Order 2GF.T.O.

any fabric or product which is not composed wholly of silk, the pro<.luct of the cocoon of the silkworm, unless there is used in immediate connection and conjunction therewith, in letters of at least equal size or conspicuousness, a word or words accurately naming or describing the fiber, material or materials from which said fabric ot product is actually made; and provided, that such disclosure of the fiber or material content thereof shall be ma<.le by accurately desig· nating each constituent fiber or material thereof, in the order of its predominance by weight, beginning with the largest single constituent;

2. Using the word "Silky," or any other word or words of similar import or meaning, to describe or designate fabrics or product~ which are not composed wholly of silk, the product of the cocoon of the silkworm, unless in the case of a fabric or product composed iu part of silk and in part of rayon or of a material or materials other than silk, there is used in immediate connection and conjunction therewith, and in letters of equal size and conspicuousness, a word or words accurately describing the fiber, material, or materials froiJl which said fabric or product was actually made; and provi<.led, thlt the fiber or material content of such fabric or product be accurately disclosed by designating each constituent fiber or material thereof, in the ordet of its predominance by weight, beginning with the largest single constituent ;

3. Using the wor<.ls "Pure Dye," or any other word or words of similar import or meaning, to describe or designate fabrics or prod· ucts which ate not composed wholly of silk, the product of the coeoo!l of the silkworm; and It is further ordered, That the respondent, Lord & Taylor, it& officers, representatives, agents, S('rvants, and employpes, in connec· tion with the offering for sale, sale, or distribution of its merchan· dise, dress goods, and garments, in interstate commerce or in the Dis· trict of Columbia, do forthwith cease and desist from: 1. Using the word "silk," or any other word or words of similar import or meaning, to describe or designate fabrics or products which are not composed wholly of silk, the product of the cocoon of tbl' silkworm, unless, in the case of a fabric or product composed in part of silk and in part of rayon or material or materials other than siJJ;, there is used. in immediate connection and conjunction therewith, and in letters of at least equal size and conspicuousness, a word or words accurately describing the fiber, material, or materials from which said fabric or product was actually made; and provided., that thie fiber or material content of such fabric or product be accurately di~­ closed by designating each constituent fiber or material thereof, r!l LORD & TAYLOR, ET AL. 921 Order the order of its predomin~nce by weight, b£>ginning with the largest single c.onstituent;

2. Using the \Vord "satin," or any other word or words of similar import or meaning, to describe or designate any fabric or product "1\·which is not composed wholly of silk, the product of the cocoon of the silkwonn, unless there is used in immediate connec.tion and conjunction therewith, in letters of at least equal size and conspicuousness, a word or words accurately naming or descl"ibing the. fiber, material, or muterials, from which said fabric or product is actually Inade; and provided that such disclosure of the fiber or material content t.h£>reof shall be made by accurately designating each constituent fiber or material thereof, in the order of its predominance by weight, beginning \with the largest single constituent. It is further ordered, That the respondents shall within 30 days after the sen-ice upon them of this order file with the Commission a report in writing setting fo:rth in detail the manner and fo:r,:n in "'hk·h they have complied with this order. Complaint 26F.T.C·