Kate Spade Accused of Deceptive Pricing in Class Action Lawsuit

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On Nov. 20, a class action lawsuit was filed against Kate Spade and Company over the pricing at Kate Spade outlet stores.

The class action lawsuit alleges that Kate Spade outlets advertise a fake original price for their items, so consumers believe they are getting a deep discount on those products when they are not.

According to the sale price class action lawsuit, “Kate Spade misrepresented the existence, nature and amount of price discounts to consumers in its outlet stores.” The company allegedly did this by advertising “our price” retail prices that did not actually exist.

The Kate Spade class action lawsuit explains that the “purported discounts were false, however, because the referenced former retail prices were fabricated and did not represent Kate Spade’s true original retail prices for its Kate Spade products.”

Kate Spade and Company operates 97 boutique stores and 62 outlet stores in the United States which sell high-end handbags, clothing, and other accessories.

Plaintiff Gaylia Pickles alleges that in July 2015 she purchased a handbag from the Kate Spade outlet store in Commerce, Calif. The handbag listed Kate Spade’s original “our price” as $355, but the store advertised 50 percent off all merchandise, and an additional 20 percent off handbags. With the discount, Pickles paid $142 for the handbag.

The class action lawsuit alleges that the actual prevailing market price for that handbag was no more than $142. Pickles states that had she known the actual original price of the handbag was $142, she would not have purchased it.

Plaintiff Donna Vandiver had a similar experience at the Kate Spade outlet store in New Braunfels, Texas, also in July. Vandiver states that she purchased a handbag priced at $275 and a wallet with an original price of $145, because they were both marked 50 percent off.  Had she known the actual retail price of the handbag and wallet were what she paid for them, she would not have bought them in the first place, according to the Kate Spade class action lawsuit.

The class action lawsuit states that Kate Spade’s false pricing and discounts violate California and Texas consumer protection laws.  Pickles seeks to represent a Class of all persons who bought a wallet or handbag from a Kate Spade outlet store in California at a discount of at least 20 percent off the retail price in the past four years.  Similarly, Vandiver seeks to represent a Class of all persons who purchased a wallet or handbag at a discount of at least 20 percent from a Kate Spade outlet store in Texas in the past four years.

The Kate Spade class action lawsuit seeks damages for Class Members and to stop the “unfair” and “deceptive” Kate Spade outlet pricing.

Pickles is represented by David S. Markun, Edward S. Zusman, Kevin K. Eng, Mark A. Ozzello, and Ari E. Basser of Markun Zusman Freniere & Compton, LLP. Vandiver is represented by Che’ D. Williamson and Michelle Eddington of Williamson Law Firm, LLC.

The Kate Spade Class Action Lawsuit is Pickles, et al. v. Kate Spade and Company, et al., Case No. 4:15-CV-05329, in the U.S. District Court for the Northern District of California.

UPDATE: On July 26, 2016, Kate Spade must face a putative class action lawsuit filed by shoppers who say the popular high-end purse maker’s outlet store price representations are false since the merchandise was never sold at its regular stores.