To achieve and maintain this quality, and therefore the reputation of our two brands, we also have invested millions of dollars in special manufacturing equipment, much of which we have designed and created. The brand labels in our quality clothing not only serve to identify the clothing but, more importantly, are proof to our retailers and to the consumer of our willingness to be identified with our product. A brand name is a maker's reputation for good or bad. In using our brand names, we suggest to the retailer that he put a price on our suit of clothing that we know represents a fair profit to him in covering the many costs and risks he incurs in serving his customers. Our brands are thereby offered to the public in the medium $69.50–$79.50 price category, the most popular price bracket in today's clothing market. But let me emphasize that our main concern lies with the consumer, because his continued and increasing acceptance of our "Botany" 500 and Worsted-tex clothing has made and keeps us successful. The consumer today is confused and is at the mercy of many sharp operators. The revolution in retailing that is occurring today tends to destroy recognized standards of value by which the consumer may judge his purchase. There's no doubt in my mind that the best way to get the consumer out of this quandry in which he finds himself is by enactment of the quality stabilization bill. This law would give the trademark owner the right to deny the use of his trademark to those retailers using deceptive and dishonest practices upon unwary consumers. In addition, if our two clothing firms cannot control the manner in which their brand names are used, then the price of our clothing at retail will rise-not drop. I say this because I can prove that a great deal of the unbranded, unidentified clothing on today's retail market is priced higher than branded goods of better quality. American men today often are asked to pay prices that are too high for the quality of the unbranded, unidentified clothing they are getting. We know this because we "shop" the retail market. We purchase unbranded clothing at higher prices than ours sells for. We send this clothing to an independent laboratory for testing. Time and time again we have been able to prove that it is overpriced to the consumer when compared to the quality of our garments and the price for which they are sold to the public. We are old-fashioned enough to believe that we can never go broke by giving the consumer as much as he pays for and a little bit more. We are not trying to be noble or generous. We simply know this is good business. And it is hard to convince us that we are wrong when our volume, from the time we first started to make nationally branded clothing in 1941, increased from 200,000 units a year to our present 1 million units and more annually. But we can only continue to give the consumer the dollar-for-dollar value he is getting in our clothing if we can control the use made of our brand names. That is why enactment of the quality stabilization bill is necessary if we are to maintain our quality standards. I spoke of the revolution going on in retailing today and I claim that much of what is happening is to the detriment of the public and the small, conventional retailer. I come now to the serious problem of baiting, misrepresentation, and price cutting as conducted by some discounters through the misuse of national brand names. Permit me to cite just one case of many to you as an illustration of what I mean. Not too long ago a discounter in the Philadelphia area ran a big ad in the daily press announcing he was selling Botany 500 clothing at an extremely cutrate price. Where this discounter got this clothing we don't know. Possibly from some conventional retailer who was going out of business and who failed to follow or demand that the brand labels be removed from any clothing so disposed of. We sent a shopper from our firm—a man who knows clothing-out to this discount store. He found about 150 Botany 500 suits on sale at a price that was only a dollar or more over our wholesale price. But here's what this shopper also found. He found about 700 other suits on the racks bearing a different, and to us in the clothing business, a completely unknown label. Inspection by our man showed him they were quite obviously of a very cheap make and of greatly inferior quality compared to our clothing. he asked about these suits, he was told and I quote: When "Oh, these were made by the Botany 500 firm. They just put a different label in them." That's the answer he got. And let me point out that it was the Botany 500 name that was advertised, not the name in those 700 cheap suits. That's what I mean by using respectable, accepted brand names as bait for a gullible public. Fortunately, in this case, we were able to obtain an injunction against this particular discounter and stop him from misusing our brand name. In this case we were able to protect the public as well as ourselves and our independent dealers. But it is not always possible for us to do that. We need this quality stabilization bill on which you are now conducting these hearings if we are to halt all bait advertising, deceptive pricing, and published misrepresentations of our product. As a manufacturer of quality merchandise, I have the responsibility of protecting our 2,700 independent retailers and the vast public that have come to accept our brand names as representing quality. I cannot do it, unless this quality stabilization bill becomes law. The majority of our 2,700 independent dealers are small businessmen. They have built their businesses and their store images on brand names. They have gained their reputation for quality merchandise through the brand merchandise they have carried year after year. They depend on our national advertising and our instock service. If we cannot prevent-and are not given the means to prevent-the misuse of our brand names, then these small businessmen in every State of the Union are at the mercy of such unprincipled operators as the one I just talked about. We manufacturers might weather the storm, but believe me, many of these small businessmen will go under. As a manufacturer of two national brands of quality clothing, nationally advertised, I do not want those brands exploited-and the public exploited-by interests with a selfish, short-term viewpoint. I want to be able to continue to provide brand clothing of good quality at a middle-of-the-road price that men can afford to pay. Doing just that has made my business a success. And I want to be able to protect my independent dealers the small businessmen of this country-from larger and more powerful and unprincipled retail interests willing to misuse and abuse brand names for their own selfish purpose without thought of giving the consumer the proper value for his dollar. It is for those reasons, that I urge your favorable consideration of the quality stabilization bill now before you. It is legislation very much in the interest of the small businessman and in the interest of the consumer. A STATEMENT FROM CLYDE BEDELL, LOS ALTOS HILLS, CALIF., ON H.R. 3669 For 45 years I have intimately worked in the field of selling and merchandising. always with close identification to retail stores. Before that time, as a schoolboy, I worked in retail stores before and after school for some years. My first full-time work, in connection with retailing, was doing traveling editorial work for trade magazines, writing up progressive and aggressive activities of retailers in some 36 States and 4 Provinces of Canada for retail trade magazines. In the course of my career, I have been director of sales and advertising, and of the corporation, for Butler Bros., then world's largest wholesaler. While with Butler Bros., I authored "The Seven Keys to Retail Profits," the most successful book on retailing ever published (McGraw-Hill, 1930). I have also been advertising manager of Marshall Field & Co., and sales promotion manager of the Fair Store, on State Street in Chicago. For many years more recently, I have as a consultant--taught retailers of all types, all over the English-speaking world, how to advertise and sell more successfully and effectively. The basis of all my teaching is this simple, fundamental, vital truth: All good selling is serving. I believe any effort to maintain prices artifically, whether under a forthright -price maintenance or fair trade bill, or an act dishonestly promoted across the United States as "an act to promote quality stabilization" is a snare and a delusion. Such an act is always promoted in the interests of a modest minority of merchandisers, and to the disadvantage of the general public. It is folly, on the one hand, for any administration to fight against the high cost of living and to admonish industry to keep prices down, while, at the same time it promotes or encourages the passing of acts to artifically maintain large groups of retail prices. When prices are artifically maintained--as in the drug business, for instanceit seems to hold an encouraging umbrella over efforts to hoist prices in other activities, such as the filling of prescriptions. Does anyone believe that prescription pharmacists would be making the demands they make, working the schedules they work, and pharmacies charging the prices they charge for prescriptions (counting out capsules and tablets and relabeling bottles largely), were it not for the outrageous margins on numerous price-maintained drugs? Cooperatives in the food field have had no chance to get a foothold and develop into any importance in the United States because the competitive free enterprise food chains, free to name their own prices, have kept gross profit margins so low that there was no umbrella under which food cooperatives could develop. Had the food industry in the United States been handicapped by a quality and price stabilization bill, we would not have the fabulous food industry in this country (despite certain persisting abuses), we presently have. Competition has developed fabulous ingenuity in food preparation, producing, and packaging. A quality and price stabilization situation would have permitted important operators to sit back and make fabulous profits without wiggling and ingeniously working to improve their competitive situation by progressive developments. A price stabilization bill permits a good many little marginal liquor store operators and others to sit on their fannies in relative inactivity and make livings from people who are compelled to pay them for doing nothing but maintaining a stock on their shelves. It is doubtful if the American economy, or if the American public, is any better off for the supporting of these parasitical stores in the liquor field, or in any other field. It is certain we would not have been as well off if the countless small grocers of America had been preserved at the expense of holding back the large operators. Precisely the same arguments could have been made for price stabilization, even after the automobile industry got started, which could have kept the Ford automobile (and its low cost for repairing autoinobiles) from blanketing the country. If we are to have a free enterprise system, we should have a free enterprise system. If price stabilization is to be provided as a shelter for liquor stores, camera stores, drugstores, bookstores, etc., today, then price stabilization must be provided for appliance stores, furniture stores, men's clothing stores, department stores, tomorrow--and we can successfully throttle our economy into stagnation. We can preserve the status quo and stop all progress. We can see to it that every lazy merchant, who wishes to avoid effort, can sit and hand items off his shelves and still make a good living, if nobody is permitted to find more economical ways to operate and sell through efficiency and improved service. I am aware of the good arguments that can be advanced for the so-called quality and price stabilization bill, but these arguments are all in behalf of the individual, and they are all against our American society and the free enterprise system. Our society is in a desperate state today, because we have been making too many exceptions for too many individuals. It is time the Congress, and every thinking American, started paying the attention our forefathers did to our responsibilities as individuals for the making of a good society. STATEMENT FROM MIKE CAROSELLA, CHAIRMAN, INDEPENDENT SHOEMEN, For years many legitimate independents throughout the country have been plagued with wave after wave of unfair competition from many large discount houses through misleading advertisements directed to the consumer. This situation, if allowed to go unchecked, will result in thousands of independents throughout the country going out of business. Members of Independent Shoemen, are not afraid of good clean competition; we welcome it-it makes for a healthy business climate in all communities, and the country prospers by it. We are afraid that our good name and integrity, which we have worked hard to build through the years, is being badly damaged through so-called bait advertising, which is nothing more than a cheap gimmick to lure customers into their stores (with our brands) and then as a result sell them something else in place of what they originally advertised. I have personally shopped these stores and can testify that many advertisements are causing independents, as well as the American public a great injustice. As chairman of the quality stabilization bill committee I do not intend to let this situation increase as the days roll into months and the months into years. I do not want to see many thousands of my fellow independents become victims of this unbusinesslike way of doing business. America is a wonderful country, the best in the world. We have all helped make it the envy of the world by good, clean competition and free enterprise. Many of us independents wore Uncle Sam's uniform and helped preserve this wonderful system. I urge all members of Congress to give their full support to this bill, the need is vital, the time is now. I ask each and every one of you to act now and legislate in favor of this bill on behalf of the countless thousands of independents from not only our organization, but all Americans who are earnestly trying to make an honest living in their own small communities throughout the country. This is part of the American way of life, let's help keep it that way, and most of all let's preserve it, and with the help of God I know we will succeed. STATEMENT BY EDWARD EWELL, PRESIDENT OF THE LAUNDRY AND CLEANERS ALLIED TRADES ASSOCIATION, NEWARK 2, N.J., APRIL 15, 1963 The quality stabilization bill has been carefully reviewed by a number of our leading members, and we wish to respectfully transmit the recommendation of our board of directors that it be favorably acted upon by the House Interstate and Foreign Commerce Committee. We do sincerely hope that the committee will favorably report it out of the committee as soon as possible for the early consideration of the House of Representatives. Members of this national trade association composed of over 500 manufacturers and distributors represent the majority in the field of commercial laundry and drycleaning machinery, supplies, and affiliated lines in the United States. It is the considered judgment of many that this fair-trade bill would help correct a number of unsound business practices which have sprung up around the country due to lack of legislative guidance in this direction. We wish to thank the members of the committee in advance for careful consideration of this legislation which would be constructive in the long run in maintaining a healthy economy in the best interests of the public, business, and government. STATEMENT OF MR. JOHN D. GRAY, PRESIDENT OF HART SCHAFFNER & MARX, CHICAGO, ILL. The quality stabilization bill is urgently needed to protect consumers against the alarming spread of sharp and deceptive practices by unscrupulous retailers, and to strengthen the position of reputable retailers. Manufacturers and most resellers of high-quality and respected brands of merchandise want the public to choose such brands for their dependable quality and value. As one of such manufacturers, we favor the objectives of the proposed quality stabilization bill and we hope your committee and the Congress will take prompt action on this bill to help protect quality brands and quality stores in which the public has confidence. STATEMENT BY JOHN W. HUBBELL, SIMMONS CO., IN SUPPORT OF QUALITY STABILIZATION BILL My name is John W. Hubbell. I am vice president of Simmons Co., a national concern with regional manufacturing plants in the States of Georgia, New Jersey, Massachusetts, California, Indiana, Florida, Ohio, Texas, and Kansas. By way of qualification may I say that I am a former chairman of the board of the Brand Names Foundation, and a lifetime director. I am a past president of the Sales Executives Club of New York and a current director, and I have served as a vice president of the International Sales Executives. Both in my daily tasks and in extracurricular activities I associate with other marketing men who are very concerned about the best interests of the consumer, the retailer, the wholesaler, and the manufacturer as we face the tremendous expansion of our distribution system. I share this deep concern. I'm concerned with the problems that face us in the marketing of all of Simmons' products. And I am particularly concerned with the future marketing of our well-known, trademarked Beautyrest mattresses. I mention Beautyrest at the risk of appearing commercial because it is this trademark which involves our greatest research efforts, our most extensive advertising compaigns, our most consistent sales promotion program, our most thorough sales training, our most enthusiastic sales effort, that is by far the greatest target of those who wish to prey on our good name. Some merchants who have contributed nothing to the development and the establishment of Beautyrest go all out in their attempt to use unethical practices that tear down this honored trademark. The quality stabilization bill, when enacted, will (1) Protect the consumer from deceptive retail selling practices. (2) Protect the ethical retailer from sharp pricing practices, practices not in the public interest. (3) Protect the manufacturer from individual retailers who do not hesitate to destroy the manufacturer's reputation to further the reputation of the retailer. The only losers under quality stabilization will be the predatory price cutters and dishonest merchants who will be deprived of the opportunity of abusing and tearing down famous names. No retailer cuts a price as an act of kindness or as a matter of generosity. Retailers cut prices to attract trade. Some stores offer to sell an article below the going price to create an impression in the consumer's mind that this is a bargain price. And beyond that there is the hope that the consumer will believe that all of their prices are lower. The initial price cutter of an item enjoys a temporary advantage by leading the public to believe that he has lower prices generally--with the special price-cut item as an example. Other stores are put in an unfavorable position unless they meet the price, which they are obliged to do to avoid the embarrassment of seeming to be overpriced on the famous article, and presumably on all other articles. Meeting the price establishes a new going price which will subsequently be cut for the same reason that the original price was cut. This process will continue to a point where the merchandise is so unprofitable that the advantages of extra traffic do not offset the losses incurred. The retail price is now lowered to a point where many reputable dealers will be unwilling to sell the merchandise. This in itself can be undesirable for those consumers who have used the product, are satisfied with it, and would like to be able to buy it again. This chain reaction is particularly important with retail stores that sell items regarded as major purchases. These are items infrequently bought that represent an investment, such as furniture, appliances, and other "big ticket" merchandise. In these cases, the salesperson in the store is an important factor, because the consumer looks to salespeople for honest and objective information about the merchandise that they are buying, particularly in reputable retail stores. This salesperson will dissuade the customer from buying the cut price item because the store cannot afford to sell it at a loss. In discouraging the purchase, the salesperson will make unfavorable and derogatory remarks directly, or indirectly about the cut price item. Simultaneously, the salesperson will make extravagant statements about a substitute product although the substitute product was not considered as good before the competitive loss leader item became 99-685-63-28 |