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 The preliminary settlement was filed on Friday in Manhattan federal
court, and requires court approval.
Michael Kors was accused of creating an "illusion" of deep discounts
by using tags containing made-up "manufacturer's suggested retail
prices," or MSRP, and offers to sell the products at lower prices,
termed "our price."
Shoppers said the suggested retail prices were artificial because
the tagged products had been made exclusively for Michael Kors
outlets, and the London-based fashion house never intended to sell
them at those prices.
As part of the settlement, Michael Kors will replace "MSRP" with
"Value" on its price tags and display signage explaining that term,
or stop using reference prices for products made exclusively for its
outlets.
In a court filing, the plaintiffs' lawyers said the lawsuit is among
several accusing well-known retailers of deceptive marketing in
outlet and factory stores that violates state consumer protection
laws.
Michael Kors denied wrongdoing in agreeing to settle. It did not
immediately respond to requests for comment.
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Friday's settlement covers shoppers who bought products from Michael
Kors outlets in the four years ending July 25, 2014.
The plaintiffs' lawyers plan to seek legal fees of up to 30 percent
of the settlement fund, court papers show.
The case is Gattinella v. Michael Kors (USA) Inc et al, U.S.
District Court, Southern District of New York, No. 14-05731.
(Reporting by Jonathan Stempel in New York; Editing by Richard
Chang)
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