Dress War

Last week the most urban of all U. S. industries lifted its eyes from Manhattan's Seventh Avenue to the U. S. District Court in Boston and settled familiarly into a contentious mood. On one side was the Fashion Originators' Guild of America, founded three years ago to stamp out style piracy and now the principal prop of highgrade dressmaking. On the other side was Wm. Filene's Sons Co., famed Boston department store, which had brought suit charging conspiracy in restraint of trade. Back of Filene's stood Associated Merchandising Corp., largest co-operative buying organization for department stores in the East. The National Retail Dry Goods Association had made the same conspiracy charge in a letter sent to its 5,000 members. To many a dress manufacturer the Filene suit meant that a stability achieved after years of effort was in serious danger of legal upset. To retailers everywhere it was a call to arms.

Trouble between retailers and the Guild, with its 250 dress manufacturers and affiliates in the textile and coat & suit trades, has been developing for months. It came to a head recently in a series of incidents which retailers considered a highhanded abuse of the Guild's position. One day last month at Strawbridge & Clothier's, swank Philadelphia department store, a Guild investigator became quietly uppish. She demanded that a certain dress, in her opinion a copy, be removed from the floor and that she be told the name of the manufacturer. Its managers knew they had an agreement with the Guild, but they understood that the agreement left them free to decide which dresses were copies and which were not. They refused the investigator's request. Two days later all Guild manufacturers received a small pink card informing them that the department store had been guilty of DEFINITE REFUSAL TO COOPERATE. As penalty, Strawbridge & Clothier's orders were no longer to be filled.

Within a few days much the same thing had happened at Bloomingdale's in Manhattan and at R. H. White Co. in Boston, which is owned by Filene's. All three stores are members of Associated Merchandising Corp., which was founded by Lincoln Filene in 1916 to. give leading department stores throughout the country a Manhattan centre for style and market information, later engaged in co-operative buying. By the middle of last month all but four of the 20 members of Associated Merchandising Corp. had been "red-carded" by the Guild.

Before the end of the month every representative of retail interests in the country was taking a stand -- most of them against the Guild. The Uptown Retail Guild, which includes most Manhattan shops above 42nd Street, was almost alone in backing the Guild, while the National Retail 'Dry Goods Association sided with Associated Merchandising Corp., gave out its counsel's opinion that the Guild's activities were in violation of the anti-trust laws. It remained for Filene's to bring the issue to court, which Filene's did this month by filing an application for injunction with an elaborate bill of complaints.

Filene's complained that the Guild was seriously interfering with its spring showings by prohibiting manufacturers from shipping orders made even before the store had been red-carded. General charge was that Guild members had "conspired" to monopolize the dress industry and to maintain their monopoly by blacklisting recalcitrant retailers and laying heavy penalties on manufacturers who broke the rules. Federal Judge Elisha H. Brewster took the case under advisement.

Five years ago the possibility of any group of dress manufacturers being powerful enough to draw fire on grounds of monopoly seemed so remote as to be funny. Throughout the post-War period in which women's apparel had grown to be the sixth largest industry in the U. S., the dress trade had been chaotically innocent of any organization at all. Looking back on those days, dress manufacturers and jobbers remember only a hodgepodge of feverishly busy small houses trying to keep up with an enormously expanding market, trying to please retail buyers who demanded fresh styles and fresh discounts, trying to give up as little as possible in each successive treaty with the fighting Garment unions, trying to keep their heads up in a competition which involved almost every dirty trick known to business.

Among such tricks was the universal and highly developed practice of copying original styles. By the early Depression years it had gone so far that no exclusive model was sure to remain exclusive for 24 hours; a dress exhibited in the morning at $60 would be duplicated at $25 before sunset and at lower prices later in the week. Sketching services made a business of it; delivery boys were bribed on their way to retailers.

To fight this style piracy the Fashion Originators' Guild was started in 1933. At first limited to twelve leading dress houses, the Guild established a bureau for the registration of designs and invited other manufacturers to join. By the end of 1933 it had about 60 members and had received from 4,000 retailers "declarations of cooperation" by which the retailers agreed not to buy or sell any dresses known to be copies of styles originated by Guild members.

Prime fact about these agreements was that since the manufacturers who belonged to the Guild did business chiefly in dresses priced not lower than $16.75 wholesale, the protection of styles did not extend to lower-priced dresses. Business mortality in the higher-price field was soon diminishing, and more & more manufacturers began to do their own designing, confident that style piracy had been effectively outlawed. As the Guild's power increased it made rules against special concessions to retailers, forbade sales to associated retailers -- such as Associated Merchandising Corp. -- who bought in groups, and made it hard for retailers to return goods or cancel orders.

Many of these restrictions were embodied in the Dress Code under NRA, and department stores were content to abide by them until last year when the Guild began to operate in the field of low-priced dresses. For some time conscientious retailers had been returning dresses to manufacturers in the $10.75 category, alleging copies in violation of Guild rules. A number of manufacturers of these dresses, hitherto generally committed to copying higher priced dresses for a good proportion of their styles, decided that it was time to originate. They accordingly began to register their dresses with the Guild and were admitted, not as full-fledged members but as affiliates.

Retail merchants were disturbed by this addition to the Guild's activities. It was one thing to guard against copies in expensive lines and another thing to give the same attention to lower priced dresses, which are bought in greater quantities and sold to people who cared not at all whether they were copies or not. The retailers did not like the prospect of competing in these lines under Guild restrictions with the chain stores, which were selling the same lines under no restrictions. They were also irritated by what they regarded as a dictatorial tone in the latest Guild communications.

Early last month their irritation rose to a rage when the Guild sent out a new "declaration of cooperation" full of whopping additions to the original. Retailers who had agreed merely not to sell any dresses they knew to be copies in the upper price ranges were required not to sell any copies at all and to give the Guild's 40 professional shoppers authority to determine what was and what was not a copy. Department store managers either shook their heads or got hopping mad. Following the Strawbridge & Clothier incident war was openly declared.

The general position of retailers is that co-operation with the Guild is only possible on the original basis; that they cannot compete with chain stores if they have to return $6.75 dresses copied from $10.75 ones, and that the present Guild policy would make it practically impossible to produce and sell low-price dresses, since many manufacturers of these lines cannot afford either to hire designers or to buy original designs.

Chairman and guiding spirit of the Guild is diminutive, elegant Dress Manufacturer Maurice Rentner. Mr. Rentner writes most of the descriptive copy for his own little fashion magazine, Quality Street. Born in Poland, he started his career in the Manhattan dress market as an errand boy carrying thread to shirtwaist makers. He now owns a manufacturing firm with six factories, makes dresses retailing from $55 up. Mr. Rentner says the court fight now threatening his Guild is at bottom an effort by retailers to escape the Guild's stabilizing policies on discounts and returns, that the question of style piracy regulation in cheaper grades is just a smoke screen. Inflexible throughout the controversy, he last week made the Guild's first conciliatory move, promising: "The Guild will ship goods now on order to Filene's and the R. H. White Co. so that the entire legal proceedings in Boston may be concentrated on the principles involved in the Guild program as a whole."

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