New York Merchandise Co., in

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Iw rae Marrer oF NEW YORK. MERCHANDISE CO.; ‘ENC, ET AL CONSENT ORDER,. ETC., IN REGARD TO THE “ALLEGED VIOLATION | OF THE FEDERAL TRADE COMMISSION AND .THE FLAMMABLE FABRICS ACTS Docket C-2281, Complaint, Sept. 13, 1972—Decision, Sept. 18, 1972. Consent order requiring a New York City importer and wholesaler of apparel, novelties and gift items, including scarves, among other things to cease importing, selling or transporting fabrics so highly flammable as to be dangerous when worn.

Complaint Pursuant to the provisions of the Federal Trade Commission Act and the Flammable Fabrics Act, as amended, and by virtue of the authority vested in it by said Acts, the Federal Trade Commission, having reason to believe that New York Merchandise Co., Inc., a corporation, and Max Fradkin, individually and as an officer of said corporation, hereinafter referred to as respondents, have violated the provisions of said Acts and the rules and regulations promulgated under the Flammable Fabrics Act, as amended, 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:

Paracraru 1. Respondent New York Merchandise Co., Tne, is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York, with its office and principal place NEW YORK’ MERCHANDISE C0.) ING.) ETAL. 341 340.5 - Complaint of business located at 32-46 West 23rd Street, New York, New. York. The respondent also has offices in California at 5505: East’ Olympic Boulevard, Los Angeles, California and in Dallas, Texas and Portland, Oregon. | ‘Respondent Max Fradkin j is an officer of the aforesaid corporation. He formulates, directs and controls the acts, practices and policies of said corporation. His address’ i is’ 5 the same as that of the: corporate respondent. :: - ' Respondents ‘are: importers anid wholesalers of wpparel, novelties and gift items including scarves.

Par. 2. Respondents are now aid for some time last past have been engaged in the sale and offering for sale, in commerce, and inthe importation into the. United States, and have introduced, delivered for introduction, transported and caused to be transported in commerce and have sold or delivered after sale or shipment in commerce, products as the terms “commerce” and “product” are defined in the Flammable Fabrics Act, as amended, which products failed to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the Flammable Fabrics Act, as amended.

Among such products mentioned hereinabove were scarves. Par. 3. The aforesaid acts and practices of respondents were and are in violation of the Flammable Fabrics Act; as amended, and the rules and regulations promulgated thereunder, and constituted and now constitute unfair methods of competition and unfair and deceptive acts -and practices in commerce, within the intent and meaning 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 with a copy of a draft of complaint which the Division 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 Flammable Fabrics Act, as amended; and The respondents and counsel for the Commission having thereafter executed an agreement containing a consent order, an admission by the respondents of all the jurisdictional facts 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 com- 342 , FEDERAL TRADE COMMISSION DECISIONS ::, Decision. and ‘Order 81 F.T-€, plaint,, and waivers and other Provisions as. required by the. -Comrhission’s rules;.and- ' 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 Section 2.34(b). of its rules, the Commission hereby i issues its complaint, makes the following jurisdictional findings, and enters the following order: ;

‘1. Respondent New York Merchandise Co., Ine, isa corporation orga: nized, 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 32-46 West 23rq Street, New York, New York. The respondent also has offices in California at 5055 East:Olympic Boulevard, Los, Angeles, California, and in Dallas, Texas:and Portland, Oregon. Respondent Max Fradkin is an officer of New: York Merchandise Co., Inc., a corporation. He formulates, directs and controls the policies, acts and practices of said corporation. His address i 1s the same as that of said corporation. ‘ Respondents are importers and wholesalers of apparel, novelties and gift items including scarves.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondents, 2 and the proceeding is in the public interest.

ORDER It is ordered, That respondents New York Merchandise Co., Inc., a corporation, and its officers, and Max Fradkin, individually and as an officer of said corporation, and respondents’ representatives, agents and employees, directly or through any corporate or other device, do forthwith cease and desist from selling, offering for sale, in commerce, or importing into the United States, or introducing, delivering for introduction, transporting or causing to be transported in commerce, or selling or delivering after sale or shipment in commerce any product, fabric or related material; or selling or offering for sale any product made of fabric or related material which has been shipped or received in commerce, as “commerce,” “product,” “fabric” and “related material” are defined in the Flammable Fabric Act, as amended, which product, fabric or. related material. fails to conform to an applicable standard or regulation continued in effect, issued or amended under the provisions of the aforesaid Act. NEW: YORK: MERCHANDISE CO., INC.,- ET.AL. — 343 340 2 Decision and-Order It is further ordered, That respondents notify all of their customers who have purchased or to whom have been delivered the products which gave rise to this complaint ‘of‘the flammable nature of such products, and effect recall of such products from said customers. It is further ordered, That the respondents herein either process the products which gave rise to the complaint so asto bring them within the applicable flammability standards of the.Flammable Fabrics Act, as amended, or destroy said products. | It is further ordered, That the respondents herein shall, within ten (10). days after service upon them of this order, file with the Commission.a special report in writing setting forth the respondents’ inten- _ tions as to compliance with this. order. This: special report shall also advise the Commission fully and specifically concerning (1) the identity of the products which gave rise to the complaint, (2) the number of said products in inventory, (3) any action taken and any _ further actions proposed to be taken to notify customers of the flammability of said products and effect the recall of said products from customers, and of the results thereof, (4) any. disposition of said products since August 12, 1969 and (5) any action taken or proposed to be taken to bring said products into conformance with the applicable standard of flammability under the Flammable Fabrics Act, as amended, or destroy said products, and the results of such action. Such report shall further inform the Commission as to whether or not respondents have in inventory any product, fabric, or related material having a plain surface and made of paper, silk, rayon and acetate, nylon and acetate, rayon, cotton or any other material or combinations thereof in a weight of two ounces or less per square yard, or any product, fabric or related material having a raised fiber surface. Respondents shall submit samples of not less than one square yard in size of any such product, fabric, or related material with this report. It is further ordered, That the respondents notify the Commission at least 30 days prior to any proposed change in the corporate respondent such as dissolution, assignment or sale resulting in the emergence of a successor corporation, the creation or dissolution of subsidiaries or any other change in the corporation which may affect compliance obligations arising out of the order.

It is further ordered, That the respondent corporation shall forthwith distribute a copy of this order to each of its operating divisions. It is further ordered, That the respondents herein shall, within sixty (60) days after service 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 this order. 344 -- ‘FEDERAL ‘TRADE COMMISSION’ DECISIONS’ © ‘Complaint » 81 FRG: