Men's apparel seller Jos. A. Bank Clothiers Inc. has agreed to pay $475,000 to settle an investigation by New York Attorney General Eliot L. Spitzer, who accused the company of using deceptive sales tactics in its 12 New York stores, Spitzer said yesterday.
Without admitting any wrongdoing, the Hampstead, Md., company agreed to pay $425,000 in civil penalties and $50,000 in costs to the state. Spitzer's office alleged that the retailer offered so many sales -- with a sale ending one day and often starting up again the next -- that the sale prices effectively were the regular prices.
The six-month investigation focused on Jos. A. Bank's advertising in New York state, but Assistant Attorney General Yasmin R. Kutty, who led the probe, said deceptive sales practices may have occurred outside the state. The Carroll County chain operates 222 U.S. stores, including about 20 in the Washington region.
According to the settlement, Jos. A. Bank sold less than 1 percent of all suits, formalwear, trousers and blazers at the regular price in 2003. Merchandise was "perpetually on sale," Spitzer's office found, misleading consumers who thought they were buying at discounted prices.
"Retailers have a fundamental obligation to be truthful and accurate with their advertising," Spitzer said in a statement. "A 'sales price' or a 'discount price' should mean that the item costs less than it usually does."
As part of the settlement, Jos. A. Bank "will change the way it advertises," according to the statement.
In an interview, chief executive Robert N. Wildrick said he assigned a senior executive to begin reviewing new promotional materials.
"We have installed extremely strong systems to assure that this kind of thing will not happen in our company," Wildrick said. "We want to do things in the right manner."
At times, according to the probe, the company described sales as limited-time offers, using expressions such as "final days" and "two days only." In fact, prices did not increase at the conclusion of these sales, because each sale was followed by a new one, according to the settlement.