Clothing Chain Settles Misleading Ad Inquiry

Attorney General Spitzer today announced an agreement with a national clothing chain to reform its advertising practices.

Under the agreement, Jos. A. Bank Clothiers will change the way it advertises its signature line of men's wear. Specifically, the company will no longer characterize items as "on sale" unless the items are actually offered at a reduced price.

An investigation by Spitzer's office found that the company had engaged in potentially misleading or false advertising with sales prices that involved little or no discounting of merchandise.

"Retailers have a fundamental obligation to be truthful and accurate with their advertising," Spitzer said. "A ‘sales price' or a ‘discount price' should mean that the item costs less than it usually does."

Jos. A. Bank uses direct mail, email, internet, print, radio and television advertising and in-store promotions to market its men's clothing line. In promotional material, Jos. A. Bank claimed that its merchandise was being offered for sale at a discounted price that was lower than its regular price. In addition, the company said that items would be on sale for a short period, thus creating the false impression that prices would soon revert to a higher price.

In fact, many items were almost continually on sale during the last 18 months. For example, the company's Signature, Executive and Trio suit lines were on sale for all but a few days during the period. Less than one percent of these suits were sold at the so-called regular price.

In settling the case, Jos. A. Bank has agreed not to promote any item at a discount from a regular price unless the item has previously been offered at a higher price for a reasonably substantial period of time. Spitzer said that this provision would help guard against misrepresentation of regular prices as sales prices.

Jos. A. Bank also agreed to pay $425,000 in civil penalties and $50,000 in costs to the State of New York.

The Hampsted, Maryland-based retailer operates 12 stores in New York and more than 200 stores nationwide.

The Attorney General's office will continue to monitor the company's advertising and is conducting a broader review of advertising practices in the retail industry.

The Jos. A. Bank inquiry was handled by Assistant Attorney General Yasmin Kutty, under the supervision of Gary Brown, Assistant Attorney General in Charge of the Westchester Regional Office.


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