Bond Upholstering Co., Inc.

Text (OCR of the scan at left; may contain errors)

IN THE ~1A TTER OF BOND UPHOLSTERING CO., INC., TRADING BOND FURNITURE ~1MANUFACTURING CO., ET AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED v'"VIOLATION OF THE FEDERAL TRADE COl\nnSSION ACT Docket "/882. Complaint, May 1960-Decision, Aug. 1960 Consent order requiring two associated corporate manufacturers of household furniture, with main offices in Baltimore and Philadelphia and retail outlets in and around those cities and '\Vashington, D. C.. to . cease such false representations in advertising as that sofas they offered for sale at $129 and $129.50 sold at retail for $300 and purchasers of their furniture would , a save the difference, and that because of a "Manufacturers' Close-Out" particular line of sofas could be bought at the manufacturers' wholesale price.

CO?IPLAINT Pursua.llt to the provisions of the Federal Trade Commission Act, and by virtue of the authority vested in it by said Act, the Federal Trade Commission, having reason to believe that Bond Upholstering Co. Inc., a corporation, trading as Bond Furniture 1\:Ianufac- BOND FURNITURE MANUFACTURING CO., ET AL. 377 376 Complaint turing CO., and Bond Furniture ~1manufacturing Company, Inc., a corporation, and Melvin 1Veisberg and Seymour S. Weisberg, individually and as officers of each of said corporations, and Herbert I\::aplan and Anthony Trifillett.i, individually and as officers of said Bond Furniture :Man ufacturing Company, Inc., hereinafter referred to as respondents, have violated the provisions of said Act and it appearing to the Commission that a proceeding by it in respect thereof would be in the public interest, hereby issues its complaint stating its charges in that respect as follows: PAR.~GRAPH 1. Respondent Bond Upholstering Co. Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of l\laryland, with its principal office and place of business located at 431 North Colvin Street, Baltimore, l\ld. Bond Upholstering Co. Inc. also trades and does business under the name. of Bond Furniture :Manufacturing Co. Respondent Bond Furniture nIanufacturing Company, Inc. , is a corporation organized, existing and doing business under and virtue of the laws of the State of Pennsylvania, with its principal office and place of business located at 235 Chestnut Street, in the City of Philadelphia, State of Pennsylvania. Respondents :l\Ielvin ,Veisberg and Seymour S. 1Veisberg, are individuals and are the sole oft-icers and stockholders of the aforesaid Bond Upholstering Co. Inc. Their principal office and place of business is the same as that of the said Bond Upholstering Co. Inc. Respondents 11elvin ,Veisbel'g and Seymour S. 1Veisberg in addition to their afforesaid individual and corporate capacities, are also officers of and the O\yners of a substantial portion of the stock of the. respondent Bond Furniture :l\lanufaeturing Company, Inc. In their official enpacity as officers and stockholders of the said Bond Furniture l\lanufacturing Company, Inc., their principal office and place of business is the same as that of the said Bond Furniture :Manufacturing Company, Inc.

Respondents I-Ierbert E:aplan and Anthony Trifilletti are officers of the said Bond Furniture ~lannfacturing Company, Inc. , with their principal office and place of business being the same as that of the said Bond Furniture l\l::mufaetnring Company, Inc. The said individual respondents in their aforesaid respective corporate capacities, formulate, direct and control t.he ads and practices of each of the said corporate respondents. PAR. 2. The respondents are now and for some time last past have been engaged in the manufacturing, advertising, offering for sale~ sale and distribution of household furniture to distributors and jobbers, to retailers for resale to the public, and to the public. . . . . . . . .. . Complaint 57 F.

PAR. 3. In the course and eon duet of their business, respondents now cause, and for some time last past have caused, their said products, when sold, to be shipped from their place of business in the State of ~fary land to purchasers thereof located in various other States of the 1Jnitec1 States and in the District of Columbia, and maintain, and at all times mentioned herein have maintained, a substantial c.onrse of t.trade in said products in commerce, as "commerce is defined in the Federal Trade Commission Act. Respondents furthermore advertise, after for sale and sell said products at retail to the ultimate consumer from retail outlets operate.d by the.Jll within the confines of the District. of Columbia. Such acts and practices thereby constituting commerce as "commerce~' is defined in the Federal Trade Commission Act. PAR. 4. Said household furniture is l11anufac.turec1 by respondent Bond Upholstering Co. Inc. at its plant in Baltimore, Maryland. Said household furniture is sold to distributors and jobbers and to retailers for resale to the public..

R.respondents also maintain a number of retail outlets in and around 1V ashington~ D. , Baltimore, :i\fd. and Philadelphia, Pa., and in the States adjoining said cities wherein said products are offered for sale and sold at retail to the. ultimate consumer. For the most part purchasers inspeet display samples of said household furniture and place orders therefor. The sa.id orders are filled from respondents said. plant locate.d in Baltimore, :Md. Business is transacteel and advertisements are disseminate.d under the names of each of the c.orporate respondents and under the, trade name of Bond Furniture ~1:anufa.ct.uring Co.

PAR. 5. In the course and conduct of their business, and for the purpose of induc.ing the sale of their said furniture, respondents have made numerous statements in advertising with respect to the price of the furniture manufacturer s close out of furniture, savings status of respondents' business operations n,nd numerous other statements and representations.

Typical and illustrative of the foregoing are the following: FACTORY-TO-CONSUL\IER This is the identical sofa we sell to some of the East' s leading furniture stores, retailing for $300. 00 . . . The Kimball $129 . . . we can save you the complete retail markup. No Middleman! Buy Facto1"y Di1"ect! . Kimball . Sectional Sofas. Compare at $300. $129.50. AU three pieces. . . You can avoid paying the complete retail markup. . . Buy directly from the maker and put the difference in your pocket.

Manufacturers' Close-Out Foam Rubber Sofas Made of Fine Fabrics Left Over From Large Furniture-Store Purchases. . . Buy Direct From Factory $129.50 Complete. . . yon can buy at manufacturers' actual wholesale price. Buy right at the factory show room and put the difference in your pocket. BOND FURNITURE MA1~UFACTURING CO, ) Err AL. 379 376 Complaint PAR. 6. Through the use. of the aforesaid statements and others of similar import and meaning, not specifically hereinabove set out respondents represent:

(1) That said sofas offered for sale by respondents at $129.00 and $129. , have an established retail selling price of $300. (2) That savings equal to the difference bet,,-een the aforesaid allege.cl established retail selling price of $300.00 and respondents selling prices of $129.00 and $129. , are a.ft' orded to purchasers. (3) Through the use of the expression "iUanufaeturers' Close- Out." that. a particular line., style or kind of sofa is being discontinued or removed from stode and offered at savings from the. usual and customary retail price for said sofas in the trade aren in which PAR. 7. Said statements and representations are false, misleadingoffered.and deceptive. In truth and in fact: (1) Said sofas offered for sale by respondent at $129.00 and $129.50 do not have an established retail selling price of $300.00. ,With fmT, if any, exceptions the retail selling price of said sofas is snbshmtialJy less than $300.00.

(2) Pnrchflsers of respondents' said furniture. are not afforded snvings in fill amount equal to the c1ifi'prence between respondents ret:1il price of $129.00 01'$129. 50 and the alleged retail selling price of said furniture of $300.00.

(3) TJw Sf! j d furniture represented ~s offered at ")fnnufn,eturers Close-Oue~ was not and did not constitute a discontinuance or removal from stock of a particular line, style or kind of sofa and was not offered at savings from the usual and cust.omary retail price in the. trade area. in wl;ich offered.

m. 8. In the conduct. of this business, at all times mentioned here- , respondents have been in substantial competition in commerce., with corporations, firms and individual.ls in the sale of household furniture of the same general kind and nature as that sold by respondent~. PAT'.. 9. The use by respondents of the aforesaid false, misleading and deceptive statements and representations and practices has had and now has, the capacity and tendency to mislead the members of the purchasing public into the erroneous and mistaken belief that said statements and representations were and are true and into the purchase. of substantial quantities of respondents' products by reason of said erroneous and mistaken beliefs. As a consequence there- ~ snbstnntial trade in commerce has been, and is being unfairly diverted to respondents from their competjtors and substantial injury has thereby been, and is being, done to competition in commerce. PAn. 10. The aforesaid acts and practices of respondents, as 380 FEDERAl. TRADE COMMISSION DECISIONS Decision 57 F.

herein alleged, were and are all to the prejudice and injury of the public and of respondents' competitors and constituted, and now constitute, unfair and deceptive acts and practices and unfair methods of competition, in commerce, within the intent and meaning of the Federal Trade Commission Act.

Mr. Terral A. Jordan for the Commission. MT. Frank ltG-ulman of Baltimore, :Md., for respondents. INITIAL DECISION BY ABNER E. LIPSCO~fB, I-IEARING EXAMINER The complaint herein was issued on :May 11 , 1960, charging Respondents with violation of the Federal Trade Commission Act by the use of false, misleading and deceptive statements and representations in their advertising of the household furniture which they manufacture, offer for sale, sell and distribute to distributors and jobbers, to retailers for resale to the public, and to the public. Thereafter, on June 16, 1960, Respondents, their counsel, and . counsel supporting the complaint herein entered into an Agreement Containing Consent Order to Cease and Desist, which was approved by the Director, Associate Direetor and Assistant Director of the Commission s Bureau of Litigation, and thereafter, on June 21, 1960 submitted to the hearing examiner for consideration. The agreement identifies R.respondent Bond Upholstering Co., Inc. as a J\faryland corporation also trading and doing business under the name of Bond Furniture :Manufacturing Co. with its office and principal place of business located at 431 North Colvin Street, Baltimore, :Md. ; R.respondent Bond Furniture l\Ianufacturing Company, Inc., as a Pennsylvania corporation, with its office and principal place of business located at 235 Chestnut Street., Philadelphia, Pa.; Respondent l\lelvin ,Veisberg and Seymour S. ,17 eisberg as individuals and officers of each of the said corporate respondents, their principal office and place of business as individuals and officers of each corporate respondent being, respectively, the same as that of the said corporate respondent; and R,respondents Herbert Kaplan a.nd Anthony Trifilletti as individuals and officers of corporate Respondent Bond Furniture ~Ianufacturing Company, Ine., their prineipal office and place of business being the same as that. of the said corporate respondent.

Respondents admit all the jurisdictional facts alleged in the complaint, and agree that the record may be taken as if findings of jurisdictional facts had been duly made in accordance with such allegations.

BOND FURNITURE MANUFACTURING CO., ET AL. 381 376 Order Respondents waive any further procedure before the l1hearing ex.. aminer and the Commission; the making of findings of fact and conclusions of law; and all of the rights they may have to chal.. lenge or contest the validity of the order to cease and desist entered in accordance with the agreement. All parties agree that the record on which the initial decision and the decision of the Commission shall be based shall consist solely of the complaint and the agreement; that the order to . cease and desist, as contained in the agreement, when it shall have become a part of the decision of the Commission, shall have the same force and effect as if entered after a full hearing, and may be altered, modified or set aside in the manner provided for other orders; that the complaint herein may be used in construing the terms of said order; that the agreement is for settlement purposes only and does not constitute an admission by Respondents that they have violated the law as alleged in the com pI aid t.

After consideration of the allegations of the complaint and the provisions of the agreement and the proposed order, the hearing examiner is of the opinion that such order constitutes a satisfactory disposition of this proceeding. Accordingly, in consonance with the terms of the aforesaid agreement, the hearing examiner accepts the Agreement Containing Consent Order to Cease and Desist, finds that the Commission has jurisdiction over the respondents and over their acts and practices as alleged in the complaint; and finds that this proceeding is in the public interest. Therefore It is ordered That Bond Upholstering Co. , Inc., a corporation and its officers, trading and doing business under the name of Bond Furniture J.\:lanufactl1ring Co. or trading and doing business under any other name or names, and Bond Furniture l\1manufacturing Company, Inc., a corporation, and its officers, and Seymour S. "\Veisberg and :Melvin vVeisberg, individually and as officers of each of said corporations, and Herbert I~aplal1 and Anthony Trifilletti, individually and as officers of said Bond Furniture :Manufacturing Company, Inc. , and respondents' agents, representatives and employees directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of household furniture or any other articles of me.rchandise, in commerce, as "eol11merce" is defined in the Federal Trade Conm1ission Act, do forthwith cease and desist from representing, directly or indirectly: (a) That any amount. js the usual and regular retail selling price of said merchandise when such amount is in excess of the price at which said merchandise is or has been usually and customarjJy sold S;\l1abus 57 F.

at retail in rec.ent, regular course of business by retailers and dealers regularly selling said merehanclise;

(b) That. purchasers at retail of said merc.handise are afforded savings in an amount greater than the difference between respondnts' retail selling price for said merchandise and the usual and customary retail selling price of said merchandise in the normal course of business in respondents: trade area; or that savings in any amount are afforded purchasers of said merchandise unless such is the fact;

(e) Through t,he use of the term "JHanufaeturers: Close-Out" or any other words or phrases, that because of some unusual event or m3nner of business said merchandise is offered for sale at a savings from respondents' usual and customary price of said merchandise in the re(~ent, regular course of respondents' business unless such is the fact DECISION OF 'II-IE COl\BIISSION AXD ORDER TO FILE REPORT OF COMPLIANCE Pursuant to Section 3.21 of the Commission s Rules of Practice, the initial decision of the hearing examiner shall, on the 11th day of A..august 1960 , become the decision of the Commission; and, accordingly:

It .is onlered That Respondents Bond Upholstering Co. , Inc. , a corporatioll trading as Bond Furniture ?\Ianuracturing Co., Bond Furniture :JIanufacturing COlnpany, Inc., a corporation, and l\:Iehin ,Yeisberg and Seymour S. "\Veisbel'g, individually and as officers of each of said corporations, and I-Ierbert ICaplan and Anthony Trifilletti, individually and as officers of Bond Furniture l\ianufacturing Company, Ine., shall, within sixty (60) days after serviee upon them of this order, file with the Commission a report in writing, setting forth in detail the manner and form in which they have complied with the order to cease and desist.