The Neiman Marcus Group, Inc.

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THE NEIMAN MARCUS GROUP, INC. 95

Complaint

IN THE MATTER OF

THE NEIMAN MARCUS GROUP, INC.

CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND THE FUR PRODUCTS LABELING ACT

Docket No. C-4407; File No. 082 3199 Complaint, July 18, 2013 – Decision, July 18, 2013

The consent order addresses allegations that The Neiman Marcus Group, Inc. (“Neiman Marcus”) violated the Fur Products Labeling Act and the Federal Trade Commission Act by failing to provide accurate information regarding the fur content of three products sold on its company website and in its catalog: (a) the Outerwear Jacket; (b) the Ballerina Flat by Stuart Weitzman; and (c) the Kyah Faux Fur-Collar Coat (“Products”). The complaint alleges Neiman Marcus advertised that the Products contained “faux fur” when, in fact, they contained real fur. Additionally, Neiman Marcus falsely represented that the fur on the Ballerina Flat was mink when in fact it was rabbit. Neiman Marcus also failed to disclose the country of origin for each of the Products, in compliance with the Fur Products Labeling Act requirements. The consent order bars Neiman Marcus from misrepresenting the fur content in its mail, catalog, or Internet advertisements. Neiman Marcus is further required to maintain copies of advertisements and materials relied upon in disseminating any representation covered by the orders, as well as to provide certain notices and compliance reports to the Commission.

Participants

For the Commission: Randall David Marks and Matthew Wilshire.

For the Respondent: Daniel C. Schwartz and David Zetoony, Bryan Cave, LLP.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, as amended, 15 U.S.C. § 41 et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission (“Commission”), having reason to believe that Neiman Marcus Group, Inc. (“Neiman Marcus” or “respondent”) has violated the provisions of the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., the Fur Products Labeling Act, 15 U.S.C. § 69 et seq., and

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the Rules and Regulations Under the Fur Products Labeling Act, 16 C.F.R. Part 301, and it appearing to the Commission that this proceeding is in the public interest, alleges:

1. Respondent is a Delaware corporation with its principal office or place of business at 1618 Main St., Dallas, TX 75201.

2. The acts and practices of respondent alleged in this complaint have been in or affecting commerce, as commerce is defined in Section 4 of the Federal Trade Commission Act, 15 U.S.C. § 44, and Section 2(j) of the Fur Products Labeling Act, 15 U.S.C. § 69(j).

3. Respondent has advertised, offered for sale, sold, and distributed fur products, as that term is defined in Section 2(d) of the Fur Products Labeling Act, 15 U.S.C. § 69(d). Respondent advertises and offers fur products for sale through the Internet sites www.neimanmarcus.com and www.bergdorfgoodman.com.

4. In May 2009, Commission staff closed an investigation into whether respondent Neiman Marcus had falsely advertised coats as having faux fur that in fact contained real fur. In closing the investigation, staff relied in part on respondent's assurances that it had reached an agreement with a third-party vendor to label products as containing either real fur or other material.

Conduct

5. From approximately October 5, 2009, until approximately November 16, 2012, respondent disseminated, or caused to be disseminated, advertisements for fur products, including, but not limited to, a Burberry Outerwear Jacket ("Outerwear Jacket"), a Stuart Weitzman Ballerina Flat ("Ballerina Flat"), and an Alice + Olivia Kyah Faux-Fur Collar Coat ("Kyah Coat").

Outerwear Jacket False Advertising

6. From approximately October 5, 2009, until October 30, 2009, respondent disseminated, or caused to be disseminated, the advertisement attached as Exhibit A. This advertisement from www.neimanmarcus.com contained the following statements (emphasis added):

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Complaint

Outerwear Jacket

Cardinal red. Allover quilted topstitching. Black faux-fur hood with snap-tab detail; zip/snap front. Long sleeves with zip cuff detail. Tonal belt at natural waist. Zip pockets. A-line. Polyester/polyamide. Made in Italy of imported material.

7. The Outerwear Jacket had an attached label disclosing that it in fact contained “real fur.”

8. From October 5, 2009, until October 30, 2009, respondent sold at least five Outerwear Jackets via its website for a total revenue of at least $6,475.

Ballerina Flat False Advertising

9. From approximately August 3, 2011, until approximately December 1, 2011, respondent disseminated, or caused to be disseminated, the advertisement attached as Exhibit B. This advertisement from www.neimanmarcus.com contained the following statements (emphasis added):

A cute fur ornament decorates the toe of this basic ballerina flat by Stuart Weitzman.

Sport suede upper.

Faux fur (cotton/viscose) pom on round toe. Imported of Spanish and Italian material.

Respondent’s www.bergdorfgoodman.com internet site carried a similar advertisement beginning on August 20, 2011.

10. From approximately August 14, 2011, until approximately December 1, 2011, respondent disseminated, or caused to be disseminated, the catalog advertisement for the Ballerina Flat attached as Exhibit C, which contained the following statements (emphasis added):

Black or cola “Furball” ballet flat with dyed mink (Spain) pouf, rubber sole, and 1/2” wedge heel.

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Complaint

11. From approximately November 27, 2011, until approximately December 1, 2011, respondent mailed to its customers a "stuffer" attached as Exhibit D that described the product as containing a "dyed mink (Spain) pouf" (emphasis added).

12. The vendor of the Ballerina Flat had notified respondent that the product contained real rabbit fur before July 25, 2011.

13. From approximately August 3 to December 1, 2011, respondent sold at least 292 Ballerina Flats via its websites, catalog, and mailers for a total revenue of at least $85,000.

Kyah Coat False Advertising

14. From approximately August 9, 2012, until approximately November 16, 2012, respondent disseminated, or caused to be disseminated, the advertisement attached as Exhibit E. This advertisement from www.neimanmarcus.com contained the following statements (emphasis added):

Kyah Faux Fur-Collar Coat: Glam up your professional looks with the Alice + Olivia Kyah coat, which features a plush faux-fur collar.

Crepe with faux-fur (polyester/viscose) collar. Self-tie waist.

Long sleeves.

Arched hem falls below hip.

Virgin wool/cashmere/polyester.

Dry clean.

Imported.

15. The Kyah Coat had an attached label disclosing that its collar was in fact "real fur."

16. From approximately August 9, 2012, until approximately November 16, 2012, respondent sold at least 19 Kyah Coats via its website for a total revenue of at least $15,162.

THE NEIMAN MARCUS GROUP, INC. 99

Complaint

COUNT I

17. Through the means described in Paragraphs 6, 9, and 14, respondent represented, expressly or by implication, that the fur in the Outerwear Jacket, Ballerina Flat, and Kyah Coat was faux or fake. In truth and in fact, those products contained real fur. Therefore, the representations set forth in Paragraphs 6, 9, and 14 were false, deceptive, or misleading.

18. Through the means described in Paragraphs 10 and 11, respondent represented, expressly or by implication, that the fur in the Ballerina Flat was mink fur. In truth and in fact, the Ballerina Flat contained rabbit fur. Therefore, the representations set forth in Paragraphs 10 and 11 were false, deceptive, or misleading.

19. Respondent's practices, as alleged in this complaint, constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and false advertising in violation of Section 5(a)(5) of the Fur Products Labeling Act, 15 U.S.C. § 69c(a)(5), and Sections 301.2(c) and 301.49 of the Rules and Regulations Under the Fur Products Labeling Act, 16 C.F.R. §§ 301.2(c) and 301.49. Pursuant to Sections 3(a) and 3(c) of the Fur Products Labeling Act, 15 U.S.C. §§ 69a(a) and 69a(c), the false advertising of fur products, within the meaning of the Fur Products Labeling Act and the Rules and Regulations Under Fur Products Labeling Act, is unlawful and an unfair and deceptive act or practice, in commerce, under the Federal Trade Commission Act, 15 U.S.C. § 41, et seq.

COUNT II

20. Through the means described in paragraphs 6, 9-11, and 14, respondent did not disclose the name of the animal that produced the fur in the Outerwear Jacket, Ballerina Flat, and Kyah Coat as set forth in the Fur Products Name Guide, 16 C.F.R. § 301.0.

21. Through the means described in paragraphs 6, 9, and 14, respondent did not disclose the country of origin for the fur in the Outerwear Jacket, Ballerina Flat, and Kyah Coat.

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22. Respondent's practices, as alleged in this complaint, constitute unfair or deceptive acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a), and false advertising in violation of Sections 5(a)(1), 5(a)(5), and 5(a)(6) of the Fur Products Labeling Act, 15 U.S.C. §§ 69c(a)(1),(5), and (6), and Sections 301.2(c) and 301.49 of the Rules and Regulations Under the Fur Products Labeling Act, 16 C.F.R. §§ 301.2(c) and 301.49. Pursuant to Sections 3(a) and 3(c) of the Fur Products Labeling Act, 15 U.S.C. § 69a(a) and 69a(c), the false advertising of fur products, within the meaning of the Fur Products Labeling Act and the Rules and Regulations Under Fur Products Labeling Act, is unlawful and an unfair and deceptive act or practice, in commerce, under the Federal Trade Commission Act, 15 U.S.C. § 41, et seq.

WHEREFORE, THE PREMISES CONSIDERED, the Federal Trade Commission has caused this Complaint to be signed by its Secretary and its official seal to be hereto affixed, at Washington, D.C., this eighteenth day of July, 2013.

By the Commission.

THE NEIMAN MARCUS GROUP, INC. 101

Complaint

EXHIBIT A

Burberry - Outerwear Jacket - Neiman Marcus - Mozilla Firefox File Edit View History Bookmarks Tools Help http://www.neimanmarcus.com/store/catalog/prod.jhtml?itemId=prod92740075&parentId=cat21370731&masterId=cat000122&index=19&cmCat=cat0000 [illegible] Google [illegible] Search [illegible] Bookmarks AutoLink AutoFill Send to [illegible] Settings Burberry - Outerwear Jacket - Neim...

Neiman Marcus FREE SHIPPING at any price with code NMFALL ASSISTANCE YOUR ONLINE ACCOUNT SHOPPING BAG Enter Search [illegible] DESIGNERS INVITE APPAREL FOR HER CONTEMPORARY SHOES & HANDBAGS JEWELRY & ACCESSORIES BEAUTY MEN'S SHOP NM KIDS HOME GIFTS SALE & VALUES APPAREL FOR HER CATEGORIES: OUTERWEAR SHOP: COATS See our complete Burberry collection. View all < PREV | NEXT >

Outerwear Jacket Cardinal red. Allover quilted taffeta lining. Black faux-fur hood with snap-tab detail. [illegible] front. Long sleeves with rib cuff detail. Tonal belt at natural waist. Zip pockets. A-line. Polyester/polyamide. Made in Italy of imported material. Modern Size Guide

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Items Available Quantity Available Sizes/Colors Burberry 1 First, Select Size [illegible] Outerwear Jacket Then, Select Color [illegible] Price: $1,295.00 NMF10_B0X5C

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Complaint

EXHIBIT B

[http://www.neimanmarcus.com/store/catalog/prod.jhtml?itemId=prod11920038&parentId=cat980731&masterId=cat000149&index=0&cmCat=cat000000cat000149cat000226cat980731cat000149cat000226cat980731cat000149cat000226cat980731](http://www.neimanmarcus.com/store/catalog/prod.jhtml?itemId=prod11920038&parentId=cat980731&masterId=cat000149&index=0&cmCat=cat000000cat000149cat000226cat980731cat000149cat000226cat980731cat000149cat000226cat980731)

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See our complete Salvatore Ferragamo selection.

**Ferragamo Ribbed Ballerina Flat** A chic ballerina decollete. The tip of the toe is ribbed fabric for the sleek silhouette. * Ribbed toe cap.

* Flat heel for comfort and ease.

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* Leather sole.

* Made in Italy.

**About Salvatore Ferragamo** Born in Bonito, Italy, Salvatore Ferragamo moved to the United States in the early part of the century, where he became famous for his handmade shoes for the stars of the silver screen. He returned to Italy in 1927 and opened a workshop in Florence. His innovative designs, such as the cage heel and the wedge, are still considered masterpieces. Today, the Ferragamo family carries on the tradition of quality and craftsmanship.

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THE NEIMAN MARCUS GROUP, INC. 103

Complaint

EXHIBIT C

STUART WEITZMAN: Black or colo suede "Furball" ballet flat with dyed mink [Spain] pouf, rubber sole, and 1/2" wedge heel. Full and half sizes 5-10B, 11B, 12B, 7-10AA. Spain.

30 FurTrim Ballet Flat 325.00

ADRIENNE VITTADINI. Lipstick (red) wool and cashmere ribbed jacket and sleeveless shell. Black ponte pants of rayon, nylon, and spandex. Classic sizes S(4-6), M(8-10), L(12-14), XL(16) and Women's sizes 1X(18W-20W), 2X(22W), 3X(24W). Imported.

69A Classic Jacket 398.00 31B Classic Shell 168.00 31C Classic Pants 178.00 31D Women's Jacket 478.00 31E Women's Shell 198.00 31F Women's Pants 218.00

For our Apparel Size Guide, visit NeimanMarcus.com and click Assistance.

JOSE & MARIA BARRERA. Hammered 24-karat gold-plated metal clip-on earrings; 2 3/4"L x 1 5/8"W. USA.

31G Earrings 240.00

1.800.825.8000 NEIMANMARCUS.COM

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Complaint

EXHIBIT D

STUART WEITZMAN. Cola or black Lycra® and leather "Flex Mode" bootie with 3¼" wedge heel. Full and half sizes 5-10B, 11B. Spain.

3A Bootie Orig. 365.00 NOW 215.00*

STUART WEITZMAN. Black or cola suede "Furball" ballet flat with dyed mink [Spain] pouf, rubber sole, and ¼" wedge heel. Black, full and half sizes 5-7½B, 9½-12B, 7AA, 8-10AA. Cola, full and half sizes 5-10B, 11B, 12B, 7AA, 9½-10AA. Spain.

3C Black Fur-trim Ballet Flat Orig. 325.00 NOW 195.00* 3D Cola Fur-trim Ballet Flat Orig. 325.00 NOW 195.00*

STUART WEITZMAN. Black suede "Forever" boot with cotton and viscose faux-fur cuff and rubber sole. Full and half sizes 5-10B, 11B, 12B, 7-10AA. Spain.

3B Boot Orig. 345.00 NOW 205.00*

STUART WEITZMAN. Black water-resistant Gore-Tex® and patent leather ankle boot with leather sole and 2" wedge heel. Full and half sizes 5-10B, 11B, 12B, 7-10AA. Spain.

3E Boot Orig. 450.00 NOW 270.00*

THE NEIMAN MARCUS GROUP, INC. 105

Complaint

EXHIBIT E

[illegible]

Right now, the official U.S. time is:

11:47:06 Wednesday, October 10, 2012

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Right now, the official U.S. time is:

11:45:09 Wednesday, October 10, 2012

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Decision and Order

DECISION AND ORDER

The Federal Trade Commission ("Commission"), having initiated an investigation of certain acts and practices of the Respondent named in the caption hereof, and the Respondent having been furnished thereafter with a copy of a draft of a Complaint which the Bureau of Consumer Protection proposed to present to the Commission for its consideration and which, if issued, would charge the Respondent with violations of the Federal Trade Commission Act and the Fur Products Labeling Act; and

The Respondent, its attorney, and counsel for the Commission having thereafter executed an Agreement Containing Consent Order ("Consent Agreement"), which includes: a statement by Respondent that it neither admits nor denies any of the allegations in the draft complaint, except as specifically stated in the Consent Agreement, and, only for purposes of this action, admits the facts necessary to establish jurisdiction; 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 Respondent has violated the Federal Trade Commission Act, and that a 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 for the receipt and consideration of public comments, and having duly considered the comments received from interested persons pursuant to Commission Rule 2.34, 16 C.F.R. § 2.34, now in further conformity with the procedure prescribed in Commission Rule 2.34, the Commission hereby issues its complaint, makes the following jurisdictional findings, and enters the following order:

1. Respondent The Neiman Marcus Group, Inc., is a Delaware corporation with its principal office or place of business at 1618 Main St., Dallas, TX 75201.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the

THE NEIMAN MARCUS GROUP, INC. 107

Decision and Order

Respondent, and the proceeding is in the public interest.

ORDER

DEFINITIONS

For purposes of this order, the following definitions shall apply:

1. “Respondent” shall mean The Neiman Marcus Group, Inc., its successors and assigns, subsidiaries and divisions, and their officers, agents, representatives, and employees.

2. “Commerce” shall mean commerce among the several States or with foreign nations, or in any Territory of the United States or in the District of Columbia, or between any such Territory and another, or between any such Territory and any State or foreign nation, or between the District of Columbia and any State or Territory or foreign nation.

3. “Covered product” shall mean any article of clothing or covering for any part of the body that (a) is made in whole or in part of fur or used fur or (b) respondent advertises as containing fake or faux fur.

4. “Fur” shall mean any animal skin or part thereof with hair, fleece, or fur fibers attached thereto, either in its raw or processed state, but shall not include such skins as are to be converted into leather or which in processing shall have the hair, fleece, or fur fiber completely removed.

5. “Fur product” shall mean any article of clothing or covering for any part of the body made in whole or in part of fur or used fur.

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Decision and Order

I.

IT IS ORDERED that, subject to the guaranty provisions of the Fur Products Labeling Act ("Fur Act"), 15 U.S.C. § 69 et seq., and the Rules and Regulations Under the Fur Products Labeling Act ("Fur Rules"), 16 C.F.R. Part 301, Respondent, directly or through any person, partnership, corporation, subsidiary, division, trade name, or other device, in connection with the labeling, advertising, promotion, offering for sale, sale, or distribution of any fur product in any advertisement disseminated through the mail, on any website, or in any catalog, in or affecting commerce, is hereby permanently restrained and enjoined from engaging in, causing other persons to engage in, or assisting other persons to engage in, violations of the Fur Act and the Fur Rules, including, but not limited to, falsely or deceptively advertising any fur product by misrepresenting or failing to disclose:

A. That the fur in any fur product is faux or fake;

B. The name or names (as set forth in the Fur Products Name Guide, 16 C.F.R. § 301.0) of the animal or animals that produced the fur, and such qualifying statement as may be required pursuant to 15 U.S.C. § 69e(c);

C. That the fur is used fur or that the fur product contains used fur when such is the fact;

D. That the fur product or fur is bleached, dyed, or otherwise artificially colored fur when such is the fact;

E. That the fur product is composed in whole or in substantial part of paws, tails, bellies, or waste fur when such is the fact; and

F. The name of the country of origin of any imported furs or those contained in the fur product.

Provided that, in the event the Fur Act or Fur Rules are amended or modified:

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Decision and Order

1. Respondent shall comply fully and completely with all applicable requirements thereof, on and after the effective date of any such act or rule; and

2. That nothing in this Paragraph shall impose upon Respondent obligations beyond what is required under the amended or modified version of the Fur Act or Rules.

Provided further that if Respondent (1) cannot legally obtain a guaranty when it takes an ownership interest in a fur product, (2) does not embellish or misrepresent claims provided by the manufacturer about that product, and (3) does not sell the product as a private label product, then Respondent shall be liable for a violation of this Paragraph only if it knew or should have known that the marketing or sale of the product would violate this Paragraph.

II.

IT IS FURTHER ORDERED that Respondent shall maintain and, upon request, make available to the Commission, for inspection and copying, all records that will demonstrate compliance with the requirements of this order, including, but not limited to:

A. All acknowledgments of receipt of order obtained pursuant to Paragraph III.B.

B. For three (3) years after the last date of dissemination of any representation by Respondent about any covered product in any advertisement disseminated through the mail, on any website, or in any catalog;

1. All advertisements and promotional materials containing the representation;

2. All materials that were relied upon in disseminating the representation;

3. All tests, reports, studies, surveys, demonstrations, or other evidence in the possession or control of

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Decision and Order

any of the persons covered by Paragraph III.A that contradict, qualify, or call into question the representation, or the basis relied upon for the representation; and

4. All complaints and other communications with consumers that call into question the representation, or the basis relied upon for the representation, in connection with a specific product purchased by a specific consumer, and all communications with governmental or consumer protection organizations that contradict, qualify, or call into question the representation, or the basis relied upon for the representation.

III.

IT IS FURTHER ORDERED that Respondent shall:

A. For a period of three (3) years, deliver a copy of this order to all employees, agents, and representatives having responsibilities with respect to Respondent's marketing or advertising of any covered product in any advertisement disseminated through the mail, on any website, or in any catalog and to any manager or officer in the chain of command of such employees, agents, and representatives, within thirty (30) days after (1) the date of service of this order, or (2) the person assumes a position covered by this paragraph.

B. Secure from each person receiving this order pursuant to this paragraph a signed and dated statement acknowledging receipt of this order.

IV.

IT IS FURTHER ORDERED that Respondent shall notify the Commission in connection with compliance with this order as follows:

A. At least thirty (30) days prior to any change in the corporation that may affect compliance obligations

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Decision and Order

arising under this order, including, but not limited to, a dissolution, assignment, sale, merger, or other action, that would result in the emergence of a successor corporation; the creation or dissolution of a subsidiary, parent, or affiliate that engages in any acts or practices subject to this order; the proposed filing of a bankruptcy petition; or a change in the corporate name or address. Provided that, with respect to any proposed change in the corporation about which Respondent learns less than thirty (30) days prior to the date such action is to take place, Respondent shall notify the Commission as soon as is practicable after obtaining such knowledge.

B. Within sixty (60) days after the date of service of this order, file with the Commission a true and accurate report, in writing, setting forth in detail the manner and form of its own compliance with this order. Within ten (10) days of receipt of written notice from a representative of the Commission, it shall submit additional true and accurate written reports.

C. Unless otherwise directed by a representative of the Commission in writing, all notices required by this Part shall be emailed to [email protected] or sent by overnight courier (not the U.S. Postal Service) to: Associate Director for Enforcement, Bureau of Consumer Protection, Federal Trade Commission, 600 Pennsylvania Avenue NW, Washington, DC 20580. The subject line must begin: FTC v. The Neiman Marcus Group, Inc., File Number 0823199, Docket Number C-4407.

V.

IT IS FURTHER ORDERED that this order will terminate on July 18, 2033, or twenty (20) years from the most recent date that the United States or the Commission files a complaint (with or without an accompanying consent decree) in federal court alleging any violation of the order, whichever comes later. Provided that the filing of such a complaint will not affect the duration of:

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Decision and Order

A. Any Part in this order that terminates in less than twenty (20) years;

B. This order, if such complaint is filed after the order has terminated pursuant to this Part. Provided, further, that if such complaint is dismissed, or a federal court rules that the Respondent did not violate any provision of the order, and the dismissal or ruling is either not appealed or upheld on appeal, then the order will terminate according to this Part as though the complaint had never been filed, except that the order will not terminate between the date such complaint is filed and the later of the deadline for appealing such dismissal or ruling and the date such dismissal or ruling is upheld on appeal.

By the Commission.

THE NEIMAN MARCUS GROUP, INC. 113

Analysis to Aid Public Comment

ANALYSIS OF CONSENT ORDER TO AID PUBLIC COMMENT

The Federal Trade Commission (“FTC” or “Commission”) has accepted, subject to final approval, agreements containing consent orders from The Neiman Marcus Group, Inc. (“Neiman Marcus”), DrJays.com, Inc. (“DrJays”), and Eminent, Inc., doing business as Revolve Clothing (“Revolve”).

The proposed consent orders have been placed on the public record for thirty (30) days for receipt of comments by interested persons. Comments received during this period will become part of the public record. After thirty (30) days, the Commission will again review the agreements and the comments received, and decide whether it should withdraw from the agreements or make the proposed orders final.

Proposed Complaints

These matters involve violations of Section 5(a) of the Federal Trade Commission Act, 15 U.S.C. § 45(a) (“FTC Act”), Section 5(a)(5) of the Fur Products Labeling Act, 15 U.S.C. § 69c(a)(5) (“Fur Act”), and Sections 301.2(c) and 301.49 of the Rules and Regulations Under Fur Products Labeling Act, 16 C.F.R §§ 301.2(c) and 301.49 (“Fur Rules”). In 2010, Congress enacted the Truth in Fur Labeling Act, which amended the Fur Act by, among other things, eliminating an exemption for items containing fur valued at no more than $150. As a result, the Fur Act now requires disclosure of any fur content in wearing apparel.

The proposed complaints allege that Neiman Marcus, DrJays, and Revolve each advertised products containing real fur as containing “faux fur” on its Internet site. The proposed complaints further allege that the advertisements failed to disclose the names, as set forth in the Fur Products Name Guide, 16 C.F.R. § 301.0, of the animals that produced the fur in each product. They also allege that most of the products had labels correctly identifying the fur content.

The proposed complaint against Neiman Marcus alleges that the company’s website misrepresented the fur content and failed to disclose the animal name for three products: an Outerwear

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Analysis to Aid Public Comment

Jacket, a Ballerina Flat by Stuart Weitzman, and a Kyah Faux Fur-Collar Coat. In addition to falsely advertising the Ballerina Flat online as "faux" fur, Neiman Marcus' catalog and mail advertising falsely represented that the product's fur was mink when it was in fact rabbit. The proposed complaint further alleges that Neiman Marcus sold at least 316 units of the three products. Finally, it alleges that Neiman Marcus failed to disclose the country of origin of each product.

The proposed complaint against DrJays alleges that the company misrepresented the fur content and failed to disclose the animal name for three products: a Snorkel Jacket by Crown Holder; a Fur/Leather Vest by Knoles & Carter; and a New York Subway Leather Bomber Jacket by United Face. It further alleges that DrJays sold at least 241 units.

The proposed complaint against Revolve alleges that the company misrepresented the fur content and failed to disclose the animal name for four products: an Australia Luxe Collective Nordic Angel Short Boot; a Marc Jacobs Runway Roebling Coat; a Dakota Xan Fur Poncho; and an Eryn Brinie Belted Faux Fur Vest. It further alleges that Revolve sold at least 158 units of the products.

Proposed Orders

The proposed orders are designed to prevent Neiman Marcus, DrJays, and Revolve from engaging in similar acts and practices in the future.

Paragraph I bars each proposed respondent from violating the Fur Act and Rules by, among other things, misrepresenting in mail, catalog, or Internet advertisements that the fur in any product is faux or fake or misrepresenting the type of fur. Paragraph I also contains a proviso incorporating the Enforcement Policy Statement that the Commission announced on January 3, 2013. The proviso and Statement provide a safe harbor when a retailer cannot legally obtain a guaranty, as long as the retailer meets certain requirements, including that it neither knew nor should have known of the violation.

THE NEIMAN MARCUS GROUP, INC. 115

Analysis to Aid Public Comment

Paragraphs II though IV will help the Commission ensure that the proposed respondents comply with Part I by requiring them to keep copies of advertisements and materials relied upon in disseminating any representation covered by the orders (Paragraph II); provide copies of the orders to certain personnel having responsibility for the advertising or sale of fur and fake fur products (Paragraph III); and provide certain notices and compliance reports to the Commission (Paragraph IV).

Finally, Part V provides that the orders will terminate after twenty (20) years, with certain exceptions.

The purpose of this analysis is to facilitate public comment on the proposed orders. It is not intended to constitute an official interpretation of the complaints or the proposed orders, or to modify the proposed orders' terms in any way.

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Complaint

IN THE MATTER OF

DRJAYS.COM, INC.

CONSENT ORDER, ETC. IN REGARD TO ALLEGED VIOLATION OF SEC. 5 OF THE FEDERAL TRADE COMMISSION ACT AND THE FUR PRODUCTS LABELING ACT

Docket No. C-4408; File No. 122 3063 Complaint, July 18, 2013 – Decision, July 18, 2013

The consent order addresses allegations that DrJays.com, Inc. (“DrJays”) violated the Fur Products Labeling Act and the Federal Trade Commission Act by misrepresenting the fur content and failing to disclose the animal name for three of its products: (a) the Snorkel Jacket by Crown Holder; (b) the Fur/Leather Vest by Knoles & Carter; and (c) the New York Subway Leather Bomber Jacket by United Face (“Products”). The complaint alleges DrJays advertised that the Products contained “faux fur” when, in fact, they contained real fur. Further, DrJays failed to disclose the names of the animals that produced the fur used in the Products. The consent order bars DrJays from misrepresenting the fur content in its mail, catalog, or Internet advertisements. DrJays is further required to maintain copies of advertisements and materials relied upon in disseminating any representation covered by the orders, as well as to provide certain notices and compliance reports to the Commission.

Participants

For the Commission: Randall David Marks and Matthew Wilshire.

For the Respondent: Abbe Kadish, Lifshutz, Lifshutz & Associates.

COMPLAINT

Pursuant to the provisions of the Federal Trade Commission Act, as amended, 15 U.S.C. § 41 et seq., and by virtue of the authority vested in it by said Act, the Federal Trade Commission (“Commission”), having reason to believe that DrJays.com, Inc. (“respondent”), has violated the provisions of the Federal Trade Commission Act, 15 U.S.C. § 41 et seq., the Fur Products Labeling Act, 15 U.S.C. § 69 et seq., and the Rules and Regulations Under the Fur Products Labeling Act, 16 C.F.R. Part 301, and it appearing to the Commission that this proceeding is in the public interest, alleges: