Class Action: Guess Outlet Stores Offer ‘Sham’ Prices

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Guess, Inc. was hit with a class action lawsuit by a California woman, alleging that the retailer puts fake prices on the clothing it sells at its outlet stores to give customers the impression that it is offering steep discounts.

Plaintiff Serena Adame claims in her Guess class action lawsuit filed in a California state court on April 17 that the clothing store has violated California’s Unfair Competition Law and False Advertising Law through its alleged inflated discount practices.

“Specifically, Guess represented — on the price tags of its Guess Outlet Products — Manufacturer’s Suggested Retail (MSR) prices the were artificial, arbitrary and did not represent a bona fide price at which Guess formerly sold Guess Outlet products,” the fake prices class action lawsuit explains.

“Not were the advertised MSR prices prevailing market retail prices within three months immediately preceding the publication of the advertised former prices, as required by California law,” it adds.

Adame explains that after “having touted a false MSR price, Guess then offered, on the same sales labels, to sell Guess Outlet products for a price termed ‘OUR PRICE,’ which supposedly represented a deep discount off of the false MSR.”

But, according to the California woman, “the MSR prices used by Guess, which represented to consumers the purported former price of Guess Outlet products, were a sham.”

The products allegedly sold at Guess Outlet stores are specifically manufactured to be sold exclusively at Guess Outlet stores, “which means that such items were never sold — or even intended to be sold — at the MSR price listed on their labels,” and Adame says they were never sold at its non-outlet stores.

“The MSR prices listed on Guess outlet products did not represent a former price at all — much less a former price in the preceding three months,” the fake price class action lawsuit says. “They are fictional creations designed to enable Guess’ phantom markdowns.”

Adame claims that this practice is strictly forbidden by the Federal Trade Commission (FTC) because it gives consumers the impression “they are being offered a genuine bargain,” adding that “the advertiser should be especially careful . . . that the price is one at which the product was openly and actively offered for sale, for a reasonably substantial period of time, in the recent, regular course of her business, honestly and in good faith — and, of course, not for the purpose of establishing a fictitious higher price on which a deceptive comparison might be based.”

California business law makes similar requirements of retailers.

“No price shall be advertised as a former price of any advertised thing, unless the alleged former price was the prevailing market price as above defined within three months next immediately preceding the publication of the advertisement,” the statute states.

If the price was not used in the last three months, then the retailer is supposed to state “the date when the alleged former price” was last used.

Adame claims that she was recently deceived by Guess’ alleged practice of putting fake MSR prices on its products during a recent trip to a Guess Outlet store in California.

She is seeking to represent a class of California residents who have also purchased products from Guess Outlet stores.

In addition to the unfair competition and false advertising allegations, Adame is also charging Guess with violating California’s Consumer Legal Remedies Act.

Adame is represented by Wayne S. Kreger of the Law Offices of Wayne Kreger PA.

Counsel information for Guess was not immediately available on Monday.

The Guess Sham Prices Class Action Lawsuit is Serene Adame v. Guess Inc., Case No. BC579128, in the Superior Court of California for the County of Los Angeles.

UPDATE: April 2018, the California Guess outlet pricing class action settlement is now open. Click here to file a claim.