| **Nine West Group Inc.    Analysis of Proposed Consent Order to Aid Public Comment**

The Federal Trade Commission ("the Commission") has accepted, subject to    final approval, an agreement from Nine West Group Inc. ("Nine West") to a    proposed consent order. The agreement settles charges by the Commission that Nine West    violated Section 5 of the Federal Trade Commission Act by entering into vertical    agreements that restricted retail price competition in the sale of women's shoes. Nine    West is a major manufacturer and seller of women's shoes and sells shoes under the    "Easy Spirit," "Enzo Angiolini," "Bandolino,"    "cK/Calvin Klein," "Pappagallo," "Selby,"    "Amalfi," "Calico," "Evan-Picone," "Westies"    "Capezio," "Joyce,"and "9 & Co." labels. Jones Apparel    Group, Inc., purchased Nine West in July of 1999, and is a signatory to the consent    agreement, but none of the conduct alleged in the complaint occurred after the purchase.

The proposed consent order has been placed on the public record for thirty days for    receipt of comments by interested persons. Comments received during this period will    become part of the public record. After thirty days, the Commission will again review the    agreement and the comments received and will decide whether it should withdraw from the    agreement or make final the agreement's proposed order.

The purpose of this analysis is to invite public comment on the proposed order. This    analysis is not intended to constitute an official interpretation of the agreement and    proposed order or to modify their terms in any way. Further**,** the proposed    consent order has been entered into for settlement purposes only and does not constitute    an admission by Nine West that the law has been violated as alleged in the complaint.

**The Complaint**

Nine West Group is a Delaware corporation with its principal place of business in White    Plains, New York. Nine West sells women's footwear to retail outlets throughout the United    States, including many of the nation's largest department stores. 

The complaint alleges that beginning in January 1988 and continuing until at least

July 31, 1999, Nine West entered into agreements with certain retailers that fixed,    raised, and stabilized retail prices to consumers. Nine West adopted pricing policies that    determined which shoes the retailer could not discount or promote outside of specified    times. Nine West did not merely announce these policies and terminate a retailer that did    not adhere to them, which would have been lawful, but instead Nine West sought agreement    from these dealers on future pricing. For example, Nine West suspended shipments and said    it would resume them only if the dealer promised not to violate the policy again. Nine    West also coerced compliance by threatening to withhold discounts or advertising funds if    the dealer refused to comply with a pricing policy. Retailers communicated to Nine West    that they would adhere to the pricing policies.

**The Proposed Consent Order**

The proposed consent order is designed to prevent Nine West from agreeing with its    dealers to set prices. Paragraph II of the order prohibits Nine West from fixing,    controlling, or maintaining the retail price of women's footwear. It also prohibits Nine    West from coercing or pressuring any dealer to maintain, adopt, or adhere to any resale    price. Nine West also may not secure or attempt to secure commitments or assurances from    any dealer concerning resale prices. Finally, Paragraph II prohibits Nine West, for a    period of ten years, from notifying a dealer in advance that the dealer is subject to a    temporary suspension of supply (e.g., no shoes shipped for six months) or a partial    suspension (e.g., no orders of Easy Spirit loafers) if the dealer sells Nine West shoes    below a designated price.

Paragraph III of the order requires that for a period of five years from the date on    which the order becomes final, Nine West shall clearly and conspicuously include a    statement on any list, advertising, book, catalogue, or promotional material where it has    suggested any resale price for any Nine West product to any dealer. The required statement    explains that while Nine West may suggest resale prices for its products, dealers remain    free to determine on their own the prices at which they will sell and advertise Nine    West's products.

Paragraph IV of the order requires Nine West to mail a letter (see attachment A) to its    retailers with a copy of the Commission's order. The letter states that while Nine West    may send materials to them with suggested retail prices, they are free to sell and    advertise at a price they chose. Paragraph V requires that the same letter with a copy of    the Commission's order be sent to new employees of Nine West. 

Paragraph VI of the order requires Nine West to notify the Commission at least thirty    days prior to any proposed changes in the corporation, such as dissolution or sale.    Paragraph VII consists of standard Commission reporting and compliance procedures.    Finally, Paragraph VIII contains a standard "sunset provision," under which the    terms of the order terminate twenty years after the date of issuance. |
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