9623118

B218607

UNITED STATES OF AMERICA

FEDERAL TRADE COMMISSION

________________________________________

)

In the Matter of )

)

ZALE CORPORATION, ) DOCKET NO. C-3738

)

a corporation )

________________________________________)

COMPLAINT

The Federal Trade Commission, having reason to believe that

Zale Corporation, a corporation ("respondent"), has violated the

provisions of the Federal Trade Commission Act, and it appearing

to the Commission that a proceeding by it in respect thereof

would be in the public interest, alleges:

1. Respondent Zale Corporation is a Delaware corporation with

its principal office or place of business at 901 W. Walnut Hill

Lane, Irving, Texas 75038.

2. Respondent operates the country's largest chain of retail

jewelry stores with more than 1,200 locations throughout the

United States, Guam, and Puerto Rico.

3. Respondent has manufactured, advertised, labeled, offered

for sale, sold, and distributed the Ocean Treasures line of

imitation pearl jewelry, and numerous other lines of cultured

pearl jewelry, to the public. These lines of jewelry have

included bracelets, earrings, pendants, rings and strands. None

of respondent s jewelry products has included natural pearls.

4. Federal Trade Commission ind ustry guides are administrative

interpretations of laws administered by the Commission for the

guidance of the public in conducting its affairs in conformity

with legal requirements. The Federal Trade Commission s Guides

for the Jewelry, Precious Metals, and Pewter Industries, 16

C.F.R. Part 23, 61 F.R. 27212 (May 30, 1996), state as follows:
A. 23.2 Misleading Illustrations. It is unfair or

deceptive to use, as part of any advertisement, packaging

material, label, or other sales promotion matter, any visual

representation, picture, televised or computer image,

illustration, diagram, or other depiction which, either alone or

in conjunction with any accompanying words or phrases,

misrepresents the type, kind, grade, quality, quantity, metallic

content, size, weight, cut, color, character, treatment,

substance, durability, serviceability, origin, preparation,

production, manufacture, distribution, or any other material

aspect of an industry product.

B. 23.20 Misuse of terms such as "cultured pearl,"

"seed pearl," "Oriental pearl," "natura," "kultured," "real,"

"gem," "synthetic," and regional designations. It is unfair or

deceptive to use the term "cultured pearl," "cultivated pearl,"

or any other word, term, or phrase of like meaning to describe,

identify, or refer to any imitation pearl.

C. 23.19 Misuse of the word "pearl." (c) It is unfair

or deceptive to use the word "pearl" to describe, identify, or

refer to an imitation pearl unless it is immediately preceded,

with equal conspicuousness, by the word "artificial,"

"imitation," or "simulated," or by some other word or phrase of

like meaning, so as to indicate definitely and clearly that the

product is not a pearl.

5. The acts and practices of respondent alleged in this

complaint have been in or affecting commerce, as "commerce" is

defined in Section 4 of the Federal Trade Commission Act.

6. Respondent has disseminated or has caused to be disseminated

advertisements for its Ocean Treasures imitation pearl jewelry

products, including but not necessarily limited to the attached

Exhibits A through B. These advertisements contain the following

statements and depictions:

1. "ZALES THE DIAMOND, SEMI-PRECIOUS AND PEARL STORE TM

Ocean Treasures TM Fine Jewelry

Created by nature, enhanced by man."

[Depictions of necklace, earrings, rings, and pendants,

all of which appear to contain pearls or cultured

pearls](Exhibit A)

2. "Ocean TreasuresTM Fine Jewelry

Created by nature, enhanced by man."

[Depictions of necklace, earrings, and pendant, all of

which appear to contain pearls or cultured pearls]

(Exhibit B)
3

7. Through the means described in Paragraph 6, respondent has

represented, expressly or by implication, that the Ocean

Treasures line of jewelry is composed of cultured pearls.

8. In truth and in fact, the Ocean Treasures line of jewelry is

not composed of cultured pearls, but rather is composed

exclusively of imitation pearls. A cultured pearl is a pearl

formed by a mollusk as a result of an irritant placed in the

mollusk s shell by humans. An imitation pearl is a manufactured

product that is designed to simulate in appearance a pearl or

cultured pearl. Therefore, the representation set forth in

Paragraph 7 was, and is, false or misleading.

9. The acts and practices of respondent as alleged in this

complaint constitute unfair or deceptive acts or practices in or

affecting commerce in violation of Section 5(a) of the Federal

Trade Commission Act.

 THEREFORE, the Federal Trade Commission this twenty-eighth 

 day of April, 1997, has issued this complaint against

respondent.

By the Commission.

Donald S. Clark

Secretary

SEAL:

[Exhibits A-B attached to paper copies of complaint, but not

available in electronic form.]