Playtime Girl Originals, Inc.

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IN THE l\L'I. TTER OF PLAYTIl\IE GIRL ORIGINALS, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FED- ERAL TRADE COl\Il\HSSION AND THE TEXTILE FIBER PRODUCTS IDENTIFICA- TION ACTS Docket C-1306. Complaint, Mar. 4, 19G8-Decision, Mar. 4, 1968 Consent order requiring a New York City wholesaler of hosiery to cease misbranding and falsely guaranteeing its textile fiber products and misrepresenting imperfect hosiery as first or perfect quality. COl\fPLAINT Pursuant to the provisions of the Federal Trade Comnlission Act and the Textile Fiber Products Identification Aet, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission having reason to believe that Playtime Girl Originals, Inc. , a eorporation, and Albert Jemal, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of the said Acts and the Rules and Regulations promulgated under the Textile Fiber Products Identification Act, and it appearing to the Conllnission that a proceeding by it in respect thereof "auld be in the public interest, hereby issues its complaint, stating its charges in that respect as follows:

P ARA.GRAPH 1. Respondent Playtime Girl Originals, Inc., is a eorporation organized, existing and doing business under and by virtue of the laws of the State of New Yark, with its office and principal place of business located at 53 Chrystie Street, New York, New York. Individual responde,nt Albert J email is an 'Officer of the corporate respondent. He formulates, directs, and eon trols the acts, practices, and policies of the corporate respondent, including the acts and practices complained of herein. His business address is the same as said corporate respondent. Respondents are wholesalers of ladies' hosiery. PLAYTIME GIRL ORIGINALS , INC. , ET AL. 469 468 Colllplaint PAR. 2. Respondents are now, and for some time last past have been engaged in the introduction, delivery for introduction, sale, advertising, and offering for sale, in commerce, and in the transportation or causing to be transported in commerce, and in the importation into the United States, of textile fiber products; and have sold, offered for sale advertised, delivered, ,transported and caused to be transported, tBXtile fiber products, which have been advertised or offered for sale, in commerce; and have sold, offered for sale, advertised, delivered, transporteel and caused to be transported, after shipment in eonlmerce, textile fiber products, either in their original state or contained in 'other textile fiber products; as the terms "eonlilleree" and "textile fiber product" are elefin.ed in the Textile Fiber Products Identification Act. PAR. 3. Certain of said textile fiber products were misbranded by respondents in that they were not stamped, tagged, labeled or otherwise identified as required under the provisions of Section 4 (b) of the Textile Fiber Products Identification Act, and in the manner and form as prescribed by the Rules and Regulations under said Act. Among such misbranded textile fiber products, but not limited thereto, were textile fiber products, namely men s and ehildren s hosiery, without labels and with labels which failed: 1. To disclose the constituent fiber or combination of fibers in the textile fiber product;

2. To disclose the percentage of each fiber present, by weight, in the total fiber content of the textile fiber product, exclusive of ornamentation not exceeding 5 per centum by weight of the total fiber content; 3. To disclose the name, or other identification issued and registered by the Commission, of the manufacturers of the product or one or more persons subject to Section 3 with respect to such product. PAR. 4. Certain of said textile fiber products were misbranded in violation of the Textile Fiber Products Identifieation Ad in that they were not labeled in aecorelance with the Rules and Regulations promulgated ;thereunder in the following respects: 1. All parts of the required information were not conspicuously and separately set out on the same side of the label in such a manner as to be clearly legible and readily aceessible to the prospective purchaser, in violation of Rule 16 (b) of the aforesaid Rules and Regulations. 2. Nonrequired information and representations were placed on the label or elsewhere on the product and were set forth in such a manner as to interfere with, minimize, detract from, and conflict with required information, in violation of Rule 16 (e) of the aforesaid Rules and Regulations.

470 FEDERAL TRADE comj\:IISSION DECISIONS Complaint 73 F. T.

PAR. 5. The respondents furnished false guaranties that certain of their textile fiber products were not misbranded or falsely invoieed in violation of Section 10 (b) of the Textile Fiber Products Identification Aet.

PAR. 6. The acts and practices of respondents as set forth above ",ere and are in violation of the Textile Fiber Products Identifieation Act and the Rules and Regulations promulgated thereunder, and constituted, and now constitute, unfair methods of competition and unfair and deeepti ve acts or praetiees, in commerce, under the Federal Trade Commission Aet.

PAR. 7. In the course and conduct of their business, respondents now cause, and for some time last past have caused, their said products, including hosiery, when sold, to be shipped frOlTI their place of business in the State of N e,v York to purchasers thereof located in various other States of the United States, and maintain, and at all times mentioned herein have maintained, a substantial course of trade in said pro duets in commerce, as "comnlerce" is defined in the Federal Trade Commission Aet.

PAR. 8. In the course and conduct of their business, respondents purchase hosiery which is imperfect. They cause such hosiery to be packaged in cellophane into selling units of several pairs to the cellophane package, and then sell such hosiery to retailers who in turn sell it to the purchasing public. Such hosiery products are known in the trade as "irregulars," "seconds " or "thirds':' depending upon the nature of the imperfection.

m. 9. In the conduct of their business, at all times mentioned here- , respondents have been in substantial competition, in commerce with corporations, firms and indi,~iduals in the sale of products of the same general kind as that sold by respondents. PAR. 10. Respondents did not mark their said hosiery products in a clear, conspicuous manner to disclose that they were "irregulars" or seconds " so as to inform purchasers thereof or their imperfect quality. The purchasing public in the absence of markings showing that hosiery products are "irregulars" or "seconds " understands and believes that they are of perfect quality. Respondents' failure to mark or label their products in sllch a, manner as will disclose that said produets are imperfect, has had, and now has, the, capacity and tendency to mislead dealers and members of the purchasing public into the erroneous and mistaken belief that said products are perfect quality products, and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief. PLAYTLvIE GIRL ORIGINALS, INC., ET AL. 471 468 Decision and Order Official notice is hereby taken of the fad that, in connection with the sale or offering for sale of imperfect hosiery, the failure to disdose on such hosiery products that they are "irregulars" or "seconds as the ease may be, is misleading, which official notice is based upon the Commission s aceumulated know ledge and experience, as expressed in Rule 4 of the Commission s Amended Trade Practice Rules for the Hosiery Industry promulgated August 30, 1960 (amended June 10 1964).

PAll. 11. ReslJOndents in selling their hosiery as aforesaid have labeled certain of said packaged hosiery as "First Quality," thereby representing that said hosiery is of first quality. Respondents' practice of labeling their packaged hosiery as "First Quality" has had, and now has, the capacity and tendeney to mislead dealers and members of the purchasing public into the erroneous and mistaken belief that said products are first quality products and into the purchase of substantial quantities of respondents' products by reason of said erroneous and mistaken belief.

PAR. 12. The aforesaid acts and practices of respondents, as 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 Section 5 (a) (1) of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of certain acts and practices of the respondents named in the caption hereof, and the respondents having been furnished thereafter \"\ith a copy of a draft of complaint which the Bureau of Textiles and Furs proposed to present to the Commission for its consideration and which if issued by the Commission, would charge respondents with violation of the Federal Trade Commission Act and the Textile Fiber Products Identification Act; and The respondents and counsel for the Commission having thereafter executed an agreement containing a eonsent order, an admission by the respondents of all the jurisdictional fads set forth in the aforesaid draft of complaint, a statement that the signing of said agreement is ' for settlement purposes only and does not constitute an admission by respondents that the law has been violated as alleged in such complaint and waivers and other provisions as required by the Commission Rules; and Order 73 The Commission having thereafter considered the matter 'and having determined that it had reason to believe that the respondents have violated the said Acts, and that complaint should issue stating its charges in that respect, and having thereupon accepted the executed consent agreement and placed such agreement on the public record for a period of thirty (30) days, now in further conformity with the procedure prescribed in 9 2.34 (b) of its Rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Playtime Girl Originals, Inc., is a corporation organized, e.existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place of business located at 53Chrystie Street, New Yark, New York. Respondent Albert J email is an officer of said corporation and his address is the same as that of said corporation. 2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, and the proceeding is in the public interest.

ORDER t -is o1'Cle-red That respondents Playt.ime Girl Originals, Ine., a eorporation, and its officers, and Albert J email, individually and as an officer of said corporation, and respondents' representatives, agents and employees, directly or through any corporate or other device, in connection with the introduction, deli very for introduction, sale, ad vertising, or offering for sale, in commerce, or the transportation or causing to be transported in commerce, or in the importation into the United States, of any textile fiber product; or in connection with the sale, offering for sale, advertising, delivery, transportation, or causing to be transported, of any textile fiber product which has been advertised or offered for sale in commerce; or in connection with the sale, offering for sale, advertising, delivery, transportation, or causing to be transported, after shipment in commerce, of any textile fiber product whether in its original state or contained in other textile fiber products as the terms "commerce" and "textile fiber product" are defined in the Textile Fiber Products Identification Aet, do forthwith cease and desist from:

A. Thiisbranding textile fiber products by: 1. Failing to affix labels to such textile fiber products showing each element of information required to be disclo~ed by Section 4 (b) of the Textile Fiber Products Identification Act.

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PLAYTI?lie GIRL ORIGINALS - INC. , ET AL. 473 4GS Order 2. Failing to set forth ::,.11 parts of the required information conspicuously and separately on the same side of the label in such a manner as to be. clearly legible and readily accessible. to the prospectiyc purchaser.

3. Setting forth nonrequired information or representations on a label or else'yhere on the product in such a manner as to minimize, detract from, 01' conflict with information required by f,aic1 Act and the Rules and Regulations promulgated thereunder.

l'U 13. Furnishing false guaranties that textile. fiber products a not misbranded or fnJsely invoiced under the prm-is,iol1s of the Textile Fiber Products Identification Act.

1 t is flll,thej' oi'Clcrcd That respondents Playtime Girl Originals Inc., a corporation, and iL; ofilcel' , and..:-\Jbert Jemal, indi,~ichmlly and as an officer or said corporation, and respondents' agents, representatives and employees directly or through any corporate or other device in connection ,with the oflering for sale, sale or distribution of hosiery, or other related "industry products " "hieh are "irregulars seeonds " or otherwise imperfect, as such terms are defined in R.ule 4 (c) of the Amended Trade Practice Rules for the Hosiery Industry (16 CFR. 15:2.-4: (e, ), in commerce, as ';commerce" is defined in the Federal Trade Commission Act, do fortlnrith cease and desist from: A. Selling or distributing hosiery products without clearly and conspicuously setting out, .by transfer or other markings on each stoekinQ" soc.1\:. or other unit. the "\words ;;irre!.!.'lllars " or ;;seconds " as the case may be, in such degree of permanency as to remain thereon until the eonsl1lnmation of the consumer sale and of such eonspieuonsness as to be easily obselTed and read by the pnrehasing public., B. Using any advertisement 01' promotional material in connection with the oflering for sale of any such product unless it is disclosed therein that. such article is all ;;irre.Q:111ar ' 01' '; second." as the case may be.

C. IT sing the ,,-orcls ;;first quality" or ,'lords of similar 'import on the package in "\' product is sold aI' in reference to any such product in any acherbsement or promotional material. D. Representing in any manner, clin:ctly or by implication that such products are first quality or perfect (ll1ftlit~. 1 tis lw'tlwl' 0)'(lein7 That the respondents herein shall, y;-within sixty (GO) clays after service upon them of this orc1eL i~le "\with the Commission a report in "\writing setting forth in detail tbe manner and form in ,yhic.h they have eompiled ,,-ith this order, 418-345--72---- , , .

474 FEDERAL TRADE CO?-.:E\-IISSION DECISIONS Complaint i3 F. l'.