AG's Office Unveils $34 Million National Settlement with Shoe Manufacturer.

Business/News Editors

OLYMPIA, Wash.--(BUSINESS WIRE)--March 6, 2000

Attorney General Christine Gregoire and the attorneys general of 49 other states, Washington, D.C., and five territories have reached a $34 million settlement with New York shoe manufacturer Nine West Inc. over allegations of price-fixing.

The settlement, filed today in U.S. District Court in New York, immediately followed the filing of a lawsuit against Nine West in the same court. The settlement resolves the lawsuit, but allows the court to retain jurisdiction over the terms of the agreement. The court will have to approve the agreement.

Washington state is expected to receive approximately $633,000 from the settlement fund. According to the agreement, states will be required to use their money for women's health, educational, vocational and safety programs.

"As a result of pricing agreements, consumers were denied an open and competitive market for certain Nine West shoes and, as a result, paid higher prices," said Attorney General Christine Gregoire.

The states alleged Nine West Group entered into illegal agreements with shoe retailers to fix the price of women's shoes between January of 1988 and July of 1999. Nine West Group, based in White Plains, NY, was purchased by Jones Apparel Group, Inc., in June of 1999.

Working with the Federal Trade Commission, the attorneys general uncovered evidence that various Nine West divisions, including Easy Spirit, Enzo, Angiolini, and Nine West, prohibited retailers from discounting certain shoes. Price-fixing is illegal under both federal and state antitrust laws.

The lawsuit claimed that Nine West's illegal price-fixing included occasions when the manufacturer distributed lists of shoes that could not be discounted by retailers outside time periods dictated by Nine West. The group told many retailers that the purpose of the policy was to protect them from competition. In order to enforce the policies, Nine West allegedly granted discounts to cooperating retailers and withheld discounts or threatened to cancel or refuse to take orders from uncooperative companies.

Under terms of the settlement, Nine West Group did not admit liability or wrongdoing and agreed to:

-- Refrain from agreements or business practices during the next five years that influence or control the price retailers choose to sell Nine West products;

-- Notify each of its dealers and retailers that they have a right to independently determine the price at which they advertise and sell Nine West products;

-- Create a $34 million settlement fund, including $3.5 million to reimburse the states for attorneys fees, investigative costs, and publication and notice costs. The remaining $30.5 million will be divided, by population, among the states participating in the agreement.

For an electronic copy of this release, check out the AG's Office website at www.wa.gov/ago.