Old Empire, Inc.

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IN THE fA TTER OF OLD EMPIRE. INC.. ET AL.

CONSENT ORDER, ETC., IX REGARD TO THE ALLEGED VIOLATlOX OF THE FEDERAL TRADE CU)IMISSIOX ACT Docket 6401. Complaint, .:1'ny. 2';, .1955-IJecision, Apr. , 1956 Consent order requiring a perfume manufacturer' in Newark, N. J., and its franchise distributor in ew York City to cease representing falsely throug-h statements in circulars, letters, and on containers and labels that 25 per bottle was the customary retail price of its "1\arche Nuptiale perfume, that it ",rs displayed and sold by 1arned large and well-known department stores, was manufactured from essence imported from France and that they maintained a branch offce in Paris; and supplying to retail purchasers gnmmed labels bearing the figure "$25.00" to affx to the Marche i'uptiale " packages.

Before lJ/r. John Le. he,aring examiner. Mr. William L. Taggart for the Commission. Mr. Seth Harrison of Kew York City, for respondents. COMPLAINT Pursuant to the provisions of the Federal Trade COHunission Act and by virtue of the authority vested in it by said Act, the Federal Trade Commission, ha,ying reason to believe. that Old Empire, Inc. a corporation; Julio de Elorza Raymond Barnett, John de Elorza and Pearl de Blorza, individually and as offcers of Old Empire Inc. ; Pierre 1\Iarche, Inc. a corporation; Louis :Manus, ?tIrs. Samuel B. Kline, also known as Bebe Aaron, and Huth Hobbins, individually and as offcers of Pierre yIarche, Inc., and Samuel B. Kline individually and as General Manager of Pierre Marehe, Inc. , all hereinafter 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. Hesponclent, Old Empire, Inc. , is a corporation organized, existing and doing business under and by virtue of the laws of the State of Kew Jersey, with its olliee and principal place of business located at 805 Mount Prospect Avenue, Newark, Kew Jersey. Respondents Julio de Elorza, John de Elorza, Haymond Barnett and Pearl de Elorza are president treasurer, vice-president and secretary, respectively of said corporate respondent. These individuals acting in cooperation with each other formulate direct and control the acts, practices and policies of said corporate re- 1046 FEDERAL TRADE COMMISSION DECISIOKS Cumplaint :32 F. spondent. Their address is the same as that of the said corporate respondent.

Respondent Pierre 1farche, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New York with its offce and principal place of business located at Room No. 720 , 580 Fifth Avenue, Kew York, N. Y. Respondents Louis ~Ianlls Il's. Samuel B. Kline, also known as Bebe Aaron, Ruth Rohbins and Samnel B. Kline are president vice-president, secretary and general manager, respectively, of said corporate respondent. These individuals, acting in cooperation with each other, formulate, direct and control the acts. practices and policies of said corporate respondent. Their address is the same as that of the said corporatc respondent. PAR. 2. Respondent Old Empire, Inc. , is now, find for more than one year last past has been, engaged in thc manufacture, sale and distribution of perfumes, colognes, and allied products, including a pcrfume sold and distributed under the brand and trade name of "Marche Nuptiale. Respondent Pierre farche, Inc.. is now and for more than one year last past has been, the franchise distribntor of the said perfume Iarche Kuptiale. PAR. 3. Respondents cause their said products, when sold, to be transported from their places of business in the States of Ne. Jersey and :K ew Yark to purchasers thereof located in various other States of the l:united States and in the District of Columbia. Respondents maintain, and at an times mentioned herein have maintained, a substantial course of trade in aid products. in commcrep. among and between the various States of the United States a.nd in thc District of Columbia.

PAR. 4. In the course and conduct of their said businesses, respondents are now and have been at all times mentioned herein in substantial competition in commerce with other corporations, firms and individuals likewise engaged in the manufacture, sa,Je and distribution of perfumes, colognes and allied products, some of which products are compounded in the 1 united States, others are compounded in France and imported into the United States. PAR. 5. Respondents, in the course and conduct of their a.foresaid businesses and for the purpose of inducing the purchase, of their perfume described and sold under the brand and trade name of "l\farche Nuptiale" have' made numerous statemmlts and representations, with reference to said product, in brochures, circulars and letters, and upon packages, containers and labels of said product. Among and typical but not all inclusive of said statements and representations are the following:

OLD EMPIRE, I C" ET AL. 1047 1045 Complaint (Appearing on cover of four- page circular:) For over thirty years, women of fashion have chosen Marche Nuptiale as their own favorite Bcent. This fabulous perfume is the creation of the worldfamous perfumer, Marques de Elorza.

Marche Nuptiale has been featured and sold in many famous department stores and \vomen s specialty shops in this country, and throughout the world, at $25. 08 per bottle. Also advertised extensively in newspapers, magazines and trade publications; displayed in department store windows, etc. (See inside for reproductions of only a few of the countless ads. (Apprnring on inside pages of said circular are purported reproductions of window displays of la.rge and weil known named department stores advertising )1arche 1\ uptiale:) :lAHCHE NUPTIALE as displayed in the windows and sold at the perfume eol1ntt' l's of these tine stores at S2fi.OO per bottle. These are but a few of the ads which featured MARCHE NUPTIALE at :$25.00 pel' bottle in newspapers across tile country, national magazines plus tremelldou. InHle paper coverage.

MARCHE NGP'.rIALE ill its newly-designed spilpJ'oof bottle and modern package. Shaped for more sales.

1 li'uid Ounce PARIS-NEW YORK (Appearing all one window display:) For the Supreme Moment 1-arfum MARCHE UPTIALE (Wedding larch) MARQUES DE ELORZA 1"3 .A Yf'r!lIe des Champs EIysees 37 'Vest Thfrty-seventh Street Paris Kew York The package and container of Marche Knptiale in addition to displaying the Frcnch national flag also contains the wording: Fabdque Avec Essences Importees de France MARCHE NUPTIALE (Wedding lfll'ch) MARQmJS DE ELORZA Paris ew York * 1 ft. oz.

PAR. G. Through the use of the aforesaid statements and representations and others of similar import but not specifically set out herein, respondents have represented and not\ represent that their said perfume designated as ":\1al'che Xuptiale " lws a retail price of $25.00 per bottle at which price such perfume ordinarily and cnstomarily is sold to consumers; that said perfume is now displayed and sold by named large and well known department stores; that said perfume is manufactured from essences imported from France; 1048 FEDERAL TRADE CO),LVIISSION DECIS'IOl' Complaint 52 F.

that respondents maintain a branch offce or establishment in Paris France.

PAR. 7. The aforesaid representations are false. misleading and deceptive. In truth and in fact, respondents' perfume designated as "Marche Xupt.iale" days not have a retail price of 825.00 per bottle and is not ordinarily and enstomarily sold at that price; said perfume is actually sold to consumers at $3.00 per botte or Jess: said perfume is not displayed and solel by any of the named large and well known department stores and has not been so displayed and sold at said stores for as long as fifteen years; said perfume is not ma,nufactured entirely from essences imported from France but is manufactured in Newark, Kcw Jersey from essences purchased by respondents within the 'Cnited States, which contain only a small fraction of ingredients which come from France; respondents do not maintain a branch offce or e.establishment in Paris, France. PAR. S. Respondent Pierre ~1arche, Inc., acting under the di- Tection of its general manager, respondent Samuel B. Kline, in addition to supplying brochures and circulars to prospective and actual retail purchasers also supplies to such retail purchasers small gummed, sticker-type, labels bearing the figure $85.00" for the purpose of enabling the said purchasers to affx said labels or stickers to the "",Iarche Kuptiale" packages. The pmctice of supplying such labels or stickers, in addition to the brochures and circulars, containing the fictitious retail prices for said .farche Nuptiale places in the hands of retailers buying such products from respondents, an instrumentality and means ,,,hereby such retailers may mislead and deceive and do mislead and deceive the purchasing public as to the quality and origin of said product and enables such retailers to represent and offer for sale and seh said product at a price greatly in excess of the usual and regular retail price thereof.

PAR. 9. There is a preference on the part of substantial Jlumbel's of the purchasing public for perfumes and similar products manufactured and compounded in France over those manufactured and compounded in the United States.

PAR. 10. The use by respondents of the foregoing false, misleading and deceptive statements and representations has the tendency and capacity to 111:.:e(1(1 and c1ecciye the purchasing public into the erroneous and mistaken belief that such representations and statements are true and to cause substantial members of the purchasing public, because of such erroneous and mistaken belief to purchase substantial quantities of respondents' products. . a result, trade has been diverted to respondents from their com. OLD EMPIRE , IXC., ET AL. 1049 1045 Decifion petitors and substantial injury has been done and is being done to competiti9n in commerce.

PAR. 11. The aforesaid acts and practices as herein alleged are all to the prejudice and injury of the pnblic and const.itute unrair methods of competition and unfair acts and practices in commerce within the intent and meaning of the Federal Trade Commission Act.

INITIAL DECISION BY J"OHN LEWIS, HEARING EXAMI:NER The Federal Trade Commission issued its cc'mplaint against the above-named respondents on August 24, 1955, charging them with the use of unfair methods of competit.ion and unfair acts and practices in commerce, in violation or the provisions of the Federal Trade Commission Act. After being duly served with said complaint., the respondents appeared by counsel and subsequently entered into an a,agreement containing consent order to cease and desist dated January 12, 1956. Said agreement, which has been signed by counsel supporting the complaint, counsel for respondents, and all respondents, and approved by the Director' 'of the Commission s Bureau of Lit.igation. has been submitted to the undersigned heretofore duly designat.ed to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Commission s Rnles of Practice and Procedure. R.respondents, pursuant to the aforesaid agreement, have admitted all the jurisdictional facts alleged in the complaint and have agreed that the record may be taken as jf findings of jurisdktional facts had been made in accordance with such allegations. Said agreement further provides that respondents waive any Lurthrl' procedural steps before the hearing examiner and the Commission t.he making of findings of fact. or conclusions of law, and an of the rights they may have to chanenge or contest the validity of the order to cease OJul desist entered in accordance wit.h said a.greement. It ha.s been agreed that the order to cease and desist provided for in said agreement may be entered \without further notice that when so entered it shall have the, same force and effect as if entered after a fun hearjng. and that. the complaint herein may be used in construing the terms of sllicl order. Said agreement purports to dispose of all of this proceeding as to a11 parties and has been entered into by respondents for settlement purposes only and without admitting that they hayc violated the law as alleged in the complaint.

This proceeding having now come on for final consideration on the, compla.int and the aforesaid agreement containing consent 1050 FEDERAL TRADE COlVL\HSSION DECIS'IO Order 52 F. P: C. order, and it appearing that the order provided for in said agreement Covers all the allegations of the complaint and provides for an appropriate disposition of the proceeding as to all parties the same is hereby accepted and is ordered fied upon becoming 'part of the Commission s decision pursuant to Section 3.21 and 3.25 of the ules of Practice and Procedure, and the hearing examiner, ac- cordmgly, makes the following jurisdictional findings and order: 1. Respondent Old Empire, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Jersey, with its offce and principal place of business located at 865 Mt. Prospect Avenne, Newark, Xew Jersey. Respondents Julio de Elorza, Raymond Barnett, John de Elorza and Pearl de Elorza are president, treasurer, vice-president, and secretary, respectively, of said corporate respondent. Their address is the same as that of said corporate respondent. Respondent Pierre Marche, Inc., is a corporation organized, existing and doing business under and by virtue of the laws of the State of New Yark, with its offce and principal place or business located at Room 720, 580 Fifth A venue, New York, X ew York. Respondents Louis Manus Mrs. Samnel B. Kline, also known as Bebe Aaron, and Ruth Rohbins and Samuel B. Kline, arc president. vice-president, secretary and general managel': respectively. of Pierre 11:arche, Inc. Their address is the same as that of said corporate. respondent.

2. The Federal Trade Commission has jurisdiction of the subject matter of this proceeding and of the respondent.s hereina.bove named. The complaint states a cause of action against said rcspondent under the Federal Trade Commission Ael and this proceeding is in the intercst of the public. ORDER It is o-rder' That respondent Old Empire, Inc.. it corporation it.. offcers, and respondents .Julio de Elorza, Ra.ymond Barnett. .John ,Ie Elorza and Pearl de Elorza, individually and as offcers of Old .Empire, Inc., and respondent Pierre I\:larche, Inc. , a c.orporation. its offcers, and respondents Louis lanns lrs. Samuel B. Kline. also known as Bebe Aaron, and Rnth Robbins. individually and fis offcers of Pierre Marche, Inc., and S unuel B. Kline. individually nnd as General j\fanager of Pierre jUarehe, Inc. , their agents representatives, and employees, directly or through any corporate Dr other device in connection with the sale and distribution of perfumes, colognes, and allied products, in commerec. as ';commerce js defined in the Federal Trade Commission Act, do forthwith cease and desist from:

OLD EMPIRE , IXC. ) ET AL. 1051 1045 Decision 1. Supplying customers or purchasers of said products or any of them with price tags, labels, stickers or other advertising material bearing amounts which are, in fact, in excess of the prices at which said products are usn ally and ClstomRrily sold. 2. Representing directly or by implication: (a) Thrt the retail price of any of said products is in excess of the price at which said product is usually and customarily sold. (b) That said products or any of them are currently being displayed or sold by any specified store or any class of stores, when such is not the fact.

(c) That said perfumes are made from essence imported from France unless it is clearly and conspic1Jously disclosed in immediate conjunction therewith, that part of the essences arc not so imported when such is the fact.

(d) That any of respondents maintain an offce 01' establishment in France unless such is the fact.

DECISrox OF THE COMl\IISSlON .\1\1) URDER TO File REPORT OF CO:.il' LIA)' Cl-i Pursuant to Section 3. 21 of the CornmissioIl H.ll1es of Practice the initial decision of the hearing examiner shall, on the 3rd day of April, 1956, become the decision of the Commission; and, accordingly:

It is ordered That the respondents herein shah, 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 the order to cease and desist. 1052 FEDERAL TRADE CO:VLvIISSION DECIElO:\S Complaint 52 ,' . T. C.