A LADY'S COSTUME.

Taranaki Daily News, 25 September 1920, Page 6

A LADY'S COSTUME.

FASHION'S INFLUENCE ON PRICES, PROFITEERING ALLEGED. By Telegraph.—Press Association. Auckland, Last Night. A profiteering charge in respect to the price at which a lady'a costume was offered for sale by John Court, Ltd., was heard before Mr. J. W. Poynton, S.M., to-day. The defendants, for whom Mr. A. H. Johnstone appeared, were charged that they "offered for sale a lady's Ivaiapoi costume at 12 guineas, a price which is unreasonably high." Mr. Hunt, who conducted the prosecution, stated that it would be shown mat the costume in,question was offer>d for sale on June S at twelve guineas, rf yjould be .shown that the costume >vas~ one of three obtained from the ivaiapoi Company in March, and the gross price of this particular costume was £7 7s, less the trade discount of 3J per cent., making the net cost £7 Is 6d, The proportion of postage on this costume was negligible, being 4dThe position, said counsel, was that the defendants had made a gross addition of £5 10s 6d to the cost of the article, representing a gross profit of 78 per cent. The Board of Trade bad inquired into the matter, and had authorised the prosecution, holding that the profit asked was unreasonably high. The defendants had made an explanation that the costumes were fashionable goods, and high prices had to be charged at the beginning of the season to provide for less at tho end of the ieason. That seemed to be the principle—that a big price was put on with the idea that persons who were weak-minded enough would pay it. Evidence would be given, to show that some other large and reputable firms in the same business worked the same class of goods on a definite percentage basis, with an average of 50 per cent. The defendants' balance-sheet for the year ended Augiust. 1919, showed the gross profit on turnover to be 24 per cent.

L. E. Phillips, secretary to the Prices Investigation Tribunal, stated that in June he noticed a costume in Courts' shop marked twelve guineas, and inquired the cost price, with the result that he brought the matter before the tribunal. The defendants were asked to justify the price, and they wrote stating that the costumes were fashionable goods that had to be cleared out every season, and the result was that a price had to be charged at the beginning of the season to cover loss made at the end of the season, when the goods were marked down week by week until it was necessary to finally clear them regardless of loss. It was admitted that the gross cost of the costume was £7 17s, and the net cost £7 Is Gd, the price complained of representing tho gross profit of 78 per cent, on the cost, coat, and 43 per'cent, on the turnover. David Meikle, draper, said it was the practice in his costume department to make additions to cost price ranging from 40 per cent, and in some eases as low as 35 per cent, to as much as 05 per cent; and in exceptional cases 70 per cent.

Louisa Burton, buyer for the costume department of Messrs. Smith and Caughey for the past 16 years, said the addition made to the cost price by her department varied from 40 to GO per cent. The aim was to get 33 1-3 per per cent on the returns. Mr. Johnstone said that in fixing the prices of costumes at £l2 12s Hie defendant company followed the practice of the drapery trade generally, which had been its own custom since its establishment. Numerous conditions, such as fashion, color, and design, affected the sale of goods. The defendant company bought five costumes from the Kaiapoi Woollen Company. Three of the costumes were bought at £7 7s each, and tivo, which were oversizes, at £7 19s each. The cash discount of 3| per cent could not be taken into account, because if it were not allowed the company would be entitled to charge interest. Counsel said it would he realised that if the costumes department was to pay it must yield an all round profit? of 40 per cent. Not one of the costumes was sold for £l2 12s. After three months' display they were reduced tii £lO and later to ,£8 Bs', at whieh figure two were sold. The remaining three were marked at £0 6s, two being sold. Thomas Davidson, general manager of the defendant company, gave evidence on the lines of counsel's statement. He looked for a net return on costumes of from 33 1-3 per cent to 44 per cent to 80 per cent. < The hearing of the case was concluded to-night, and after taking further evidence for the defence the magistrate said lie would deliver a written judgment. >