Business & Finance: 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.