Dive Brief:
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The U.S. Department of Justice and Federal Trade Commission Wednesday sued J.C. Penney under the federal Textile Fiber Products Identification Act.
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Federal officials accuse the retailer of promoting products including men’s socks, pillow shams, and rugs as containing bamboo when they actually contain rayon and should be marketed as such.
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The suit, which calls for civil penalties and a halt to the alleged violations, follows a 2010 warning from FTC complaining about Penney’s description of its textile fiber products. Neither the agencies nor the retailer has commented.
Dive Insight:
Accusations of false advertising is the last thing that J.C. Penney needs at a time when it’s finally recapturing the loyalty of customers that had drifted away when it changed is pricing policies.
"Consumers have suffered and will continue to suffer substantial injury as a result of defendant's violations," according to the federal complaint filed in Washington, D.C., Wednesday.
But the retailer is also under pressure from the government and consumers over those very pricing policies, where its price tags show significant markdowns on prices that it rarely if ever charges. Former CEO Ron Johnson had attempted to change that to a more transparent system. But many Penney customers prefer to see that they've snagged a deal, and the retailer witnessed something of a revolt over Johnson's changes. That is largely seen as a major reason for Johnson's ouster.
