Outlet stores

Kate Spade outlet stores accused of fooling customers with their ‘discount’ price tags

Kate Spade outlets are accused of misleading customers with their “discount” price tags, Law 360 (via Withdrawn) reports.

A draft class action vs. Kate Spade claims that big discounts at outlet stores aren’t, in fact, discounts. In fact, the lawsuit alleges that the “discount” items were never sold at the higher “retail price” advertised by Kate Spade outlets.

“… Kate Spade has distorted the existence, nature and amount of consumer price discounts at her outlet stores by claiming to offer specific discount percentages from the former expressly referenced retail prices, which were depicted as “our price” retail price, the lawsuit reads, claiming that even the receipts from buyers contained the allegedly specious discounts.

Kate Spade sold merchandise “made exclusively for point-of-purchase sale and was never intended for sale in non-point-of-sale stores,” the lawsuit said. This differs from traditional outlet stores, depending on the costume, which sell “merchandise which was intended for sale in their boutique counterparts, but which was not purchased.”

To illustrate this, a complainant claims to have purchased a Kate Spade bag for $ 142 with a price tag indicating the original price was $ 355. However, the lawsuit alleges that the price was never $ 355 and was always $ 142.

This is not the first time that a company has been accused of having misleading factory prices. This summer, Reuters reported that Michael Kors had settled a lawsuit accusing him of creating an “illusion” with his heavily discounted outlet stores. Michael Kors reportedly paid $ 4.88 million to settle the lawsuit.

Some brands have attempted to distinguish their namesake brands with their discount stores, such as J. Crew’s Factory Store and its recent Market concept.

Business Insider has reached out to Kate Spade for comment and will update when we have a response.

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