Levi Strauss and Co. and three other creditors have filed an involuntary bankruptcy action against The General Store, seeking to recover nearly $1 million in debts from the troubled Washington jeans retailer.
But Sydney Lewis, president and half-owner of The General Store, has filed an antitrust suit against Levi Strauss, accusing the San Francisco-based company of trying to drive him out of business because he refuses to raise prices on Levi goods.
"The General Store's consistent discount pricing and resultant high sales volume caused a barrage of complaints . . . to Levi Strauss" from competing Washington-area retailers of Levi products, Lewis said in the antitrust suit. He said Levi responded by trying to pressure The General Store into increasing its prices by cutting off shipments of Levi goods to the company.
Lewis said in an affidavit that Levi's actions "caused our sales volume to plummet and contributed substantially to our inability to pay creditors on time."
A spokesman in the legal department of Levi Strauss, who asked that his name not be used, yesterday denied Lewis' charges.
The dispute goes back to 1977 when The General Store was selling Levi jeans at $9.98 and $10.98, compared with other area merchants who were selling identical products for $15.50. Lewis said in the anti-trust suit that the response to his discount strategy "was dramatic."
But he said local competitors began complaining to Levi Strauss that they were being undercut, and warned the jeans manufacturer that they would stop ordering Levi products if The General Store was not pressured into raising its prices.
Levi responded by restricting The General Store's line of credit to $100,000 per month, even though the store was qualified for a $150,000 credit line, Lewis said. Levi also began forcing The General Store to clear its orders through the manufacturer's New York office, "a procedure which had no business justification and which was not, upon information and belief, applied to my competitors," Lewis said.
The General Store won a Federal Trade Commission decision in October, 1977, ordering Levi Strauss "to cease and desist from . . . fixing, establishing, controlling or maintaining . . . the price at which any dealer may advertise, promote, offer for sale or sell any product at retail."
But Lewis charged in court statements that Levi continued its allegedly discriminatory policies toward his company.
Lewis said The General Store attempted last September to solve its money problems by closing 10 of 13 stores that had employed 200 people. On Feb. 27 The General Store closed two other outlets, and is now down to one unit at 810 7th St. NW, with 20 employes.