Furniture Showrooms of Clarksville, Inc

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IN THE MATTER OF FURNITURE SHOWROOMS OF CLARKSVILLE, INC., ET AL. CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket C-2506. Complaint, Mar. 21, 1974—Decision, Mar. 21, 1974 Consent order requiring a Clarksville, Tenn. retailer and distributor of furniture and related merchandise, among other things to cease misrepresenting selling prices and mark-ups.

Appearances For the Commission: H. Marshall Korschun.

_ For the respondents: Daniel, Harvill, Batson & Nolan, Clarksville, Tenn.

COMPLAINT Pursuant 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 Furniture Showrooms of Clarksville, Inc., a corporation, and Robert L. Norris, individually and as an officer of said corporation, hereinafter sometimes 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:

PARAGRAPH 1. Respondent Furniture Showrooms of Clarksville, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of Tennessee with its principal office and place of business located at 119 College Street, Clarksville, Tenn. Respondent Robert L. Norris is an officer of the corporate respondent. He formulates, directs and controls the acts and practices of the corporate respondent including the acts and practices hereinafter set forth. His address is the same as that of the corporate respondent. PAR. 2. Respondents are now, and for some time last past have been, engaged in the advertising, offering for sale, sale and distribution of furniture and related merchandise to the public at retail. PAR. 3. In the course and conduct of their business as aforesaid, 5 1 10 6 1 2 529 2255 226 40 95.277458 respondents5 1 10 6 1 3 771 2265 75 22 96.847061 now5 1 10 6 1 4 861 2262 111 32 96.261711 cause,5 1 10 6 1 5 991 2256 64 31 96.824936 ands 1 10 6 1 6 1070 2255 54 32 96.823662 for5 1 10 6 1 7 1139 2263 92 23 96.622612 some5 1 10 6 1 8 1246 2253 82 31 96.654861 times 1 10 6 1 9 1345 2253 66 31 96.450874 lasts 1 10 6 1 10 1426 2253 78 39 96.450874 past5 1 10 6 1 11 1517 2251 88 31 96.291969 have5 1 10 6 1 12 1621 2249 136 38 96.291969 caused,5 1 10 6 1 13 1774 2247 91 32 96.384666 their4 1 10 6 2 0 530 2298 1334 46 -1 5 1 10 6 2 1 530 2304 71 33 96.247643 said5 1 10 6 2 2 616 2305 244 39 96.506889 merchandise,5 1 10 6 2 3 877 2300 97 38 96.536667 when5 1 10 6 2 4 989 2306 83 38 96.694244 sold,5 1 10 6 2 5 1088 2308 35 29 96.611954 to5 1 10 6 2 6 1137 2306 43 31 96.841431 be5 1 10 6 2 7 1193 2304 142 40 96.841431 shipped5 1 10 6 2 8 1348 2303 87 32 96.369568 from5 1 10 6 2 9 1448 2301 92 32 96.369568 theirs 1 10 6 2 10 1551 2301 95 40 96.436691 places 1 10 6 2 11 1661 2300 36 32 96.704453 of5 1 10 6 2 12 1708 2298 156 33 96.486237 business4 1 10 6 3 0 529 2347 1334 48 -1 5 1 10 6 3 1 529 2354 34 30 95.848351 in5 1 10 6 3 2 574 2353 59 32 95.848351 thes 1 10 6 3 3 646 2353 97 33 96.771225 States 1 10 6 3 4 755 2355 37 30 97.014420 of5 1 10 6 3 5 799 2354 193 32 96.665054 Tennessee5 1 10 6 3 6 1004 2357 34 29 96.914742 to5 1 10 6 3 7 1051 2354 201 41 96.914742 purchasers5 1 10 6 3 8 1265 2352 138 32 96.809372 thereof5 1 10 6 3 9 1411 2351 131 32 96.846649 located5 1 10 6 3 10 1555 2350 33 31 96.922958 in5 1 10 6 3 11 1598 2349 138 32 96.747162 various5 1 10 6 3 12 1749 2347 114 32 96.957565 States4 1 10 6 4 0 531 2397 1334 47 -1 5 1 10 6 4 1 531 2404 36 31 96.248993 of5 1 10 6 4 2 579 2404 59 31 96.600006 thes 1 10 6 4 3 656 2403 128 34 95.604698 United5 1 10 6 4 4 802 2404 126 40 96.217926 States,5 1 10 6 4 5 949 2406 64 31 96.217926 ands 1 10 6 4 6 1031 2404 171 38 96.843208 maintain,5 1 10 6 4 7 1223 2403 65 32 96.993652 ands 1 10 6 4 8 1306 2405 36 29 96.936974 at5 1 10 6 4 9 1359 2402 42 32 96.557770 all5 1 10 6 4 10 1417 2402 100 31 96.944290 times5 1 10 6 4 11 1535 2399 195 32 96.319809 mentioned5 1 10 6 4 12 1747 2397 118 33 96.860565 herein Decision and Order 83 F.T.C.

have maintained, a substantial course of trade in said merchandise in commerce, as “commerce” is defined in the Federal Trade Commission Act.

PAR. 4. In the course and conduct of their aforesaid business and for the purpose of inducing the sale of their merchandise, the respondents have made, and are now making, numerous statements and representations, orally and on tags and labels attached to merchandise, through billboard advertising, and by signs on respondents’ store and service vehicles. Included in these statements and representations is the claim that merchandise is sold for “Cost plus 10%.” PAR. 5. By and through the use of the aforesaid statements and representations and others of similar import and meaning not specifically set forth herein, respondents have represented directly and by implication that:

Respondents’ selling prices for furniture and related merchandise represent a 10% mark-up over wholesale cost. PAR. 6. In truth and in fact:

Respondents’ furniture and related merchandise are not customarily sold at prices representing a 10% mark-up over wholesale cost. In fact, respondents’ mark-up over wholesale cost is substantially more than 10%.

Therefore the statements and representations set forth in Paragraphs Four and Five hereof were, and are, false, misleading and deceptive. PAR. 7. In the course and conduct of their aforesaid business, and at all times mentioned herein, respondents have been, and are, in substantial competition, in commerce, with corporations, firms and individuals in the sale of merchandise of the same general kind and nature as that sold by respondents.

PAR. 8. The respondents’ use of the aforesaid false, misleading and deceptive statements, representations, and acts and practices, have had, and now have, the capacity and tendency to mislead members of the purchasing public into the erroneous and mistaken belief that said statements and representations were, and are, true and complete, and into the purchase of substantial quantities of respondents’ merchandise by reason of said erroneous and mistaken belief. ' PAR. 9. The acts and practices of the respondents as set forth above were, and are all to the prejudice of the public and of respondents’ competitors’ and constituted, and now constitute, unfair methods of competition in commerce and unfair and deceptive acts and practices in commerce in violation of Section 5 of the Federal Trade Commission Act.

DECISION AND ORDER The Federal Trade Commission having initiated an investigation of wy ney ae ee LED 1491 Decision and Order 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 Atlanta Regional Office 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 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 complaint, and waivers and other provisions as required by the Commission’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 Act, 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 (80) days, now in further conformity with the procedure prescribed in Section 2.34(b) of its rules, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent Furniture Showrooms of Clarksville, Inc. is a corporation, existing and doing business under and by virtue of the laws of the State of Tennessee, with its office and principal place of business located at 119 College Street, Clarksville, Tenn. Respondent Robert L. Norris is an officer of said corporation. He formulates, directs and controls the policies, acts and practices of said corporation, and his principal office and place of business is located at the above stated address.

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 It is ordered, That respondents Furniture Showrooms of Clarksville, Ine., a corporation, its successors and assigns. and its officers, and Robert L. Norris, individually, and as an officer of Furniture Showrooms of Clarksville, Inc., and respondents’ agents, representatives and employees directly or through any corporation, subsidiary, division or any other device, in connection with the advertising, offering for sale, sale or distribution of furniture or other articles of merchandise, in Decision and Order 83 F.T.C.

commerce, as “commerce” is defined in the Federal Trade Commission Act, do forthwith cease and desist from: - Representing, orally, visually or in writing, directly or by implication, that any product or service may be purchased for any dollar amount or percentage over wholesale cost unless substantial sales are made at the stated mark-up over respondents’ actual wholesale cost, or misrepresenting in any manner respondents’ selling prices and mark-ups.

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 for a period of three (3) years respondents maintain records which disclose the factual basis for any-representation of respondents’ cost or special prices for any products or services. It is further ordered, That 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 individual respondent named herein promptly notify the Commission of the discontinuance of his present business or employment and of his affiliation with a new business or employment. Such notice shall include respondent’s current business address and a statement as to the nature of the business or employment in which he is engaged as well as a description of his duties and responsibilities.

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.