Outlet stores

Kate Spade outlets are accused of misleading customers with their ‘reduced’ price tags

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

A proposed class action lawsuit against Kate Spade claims deep discounts at outlets are not, in fact, discounts. In fact, according to the lawsuit, the “discounted” items were never sold at the higher “retail price” advertised by Kate Spade outlets.

“…Kate Spade misrepresented the existence, nature, and amount of consumer price discounts at its outlet stores by claiming to offer specific percentage discounts from expressly referenced former retail prices, which were represented as “our prices” retail prices,” the lawsuit reads, going on to claim that even the purchasers’ receipts contained the supposedly specious discounts.

Kate Spade sold merchandise “manufactured exclusively for sale in outlets and never intended for sale in stores without outlets,” the lawsuit says. This differs from traditional outlet stores, according to the suit, which sell “goods that were intended for sale in their boutique counterparts, but have not been purchased.”

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

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

Some retailers have tried to distinguish their eponymous brands with their off-price stores, such as J. Crew’s Factory Store and its recent Mercantile concept.

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