SHOES OF FASHION.

Taranaki Daily News, 17 July 1920, Page 5

SHOES OF FASHION.

A PAIR THAT COST £3 lis. "fl CHARGE OF PROFITEERING. /i By Telegraph.—Press Association. .'8 Auckland, Last Nigfct. J Out of many complaint* of prafitetfHnj M in Auckland, the first actual proicctttio« '-"jM to emerge came before Mr. J. E. Wilson, . g S.M., to-day, ( when a promlnsnt ilrift o! , ,'J boot and shoe merchants, Dadley's, jfctd, jjj was charged' with having isold, on April , Ist last, a pair of Indies' suede show at vh an unreasonably high price. Mr. ftußSya] appeared for the informant, the _ secre* ; jgß tary of the Auckland Price lnvestigati(s|||lM Tribunal, and Mr. R. McVeigh the defence. , 1 ,- : J| Mr. Hunt stated'that too Price Invtotij- y| gation Tribunal started operations itt-'y'S Auckland only in March last, and uj> to m June 19 last it had received, and had. for ' vestigated, 165 complaints of profiteering, and so far m only three cases bad it .• ■■rt asked the Board of Trade to prosecute. •« The complaint made in this caseflfM'-J! that the defendant company sold a tatr '-1 of ladies' black suede courtmhowt iaenal" ~|j ing the price of a pair of buckles,fw £3 lis 3d. The company explained W»t '-■$ the price was £3 7s 8d for the fiboes„and ? 3s fid for the buckles. Tie compilnj | stated that the shoes Wef6 purehiMec , A from the firm of AV. A. Grant) -X ( , :1 Sydney, the gross prico paid in Sydjbej s being a pair. Off that the defenttnl v ' company received a disooufyt of 3J Jjei i cent., making the cost slightly' under SBi ■ j lid per pair in Sydney. In«eply tow | tribunal, the defendant company fin $ the price as 30s in Sydney. Whatever U the price in Sydney was, there h«l Been "J added to it 8s 3d, stated by the cangpfeof j to be the recognised cost of landing fct a' .| shop in Auckland. A further addiooa | was then made of CO per cent, on the ~ gross cost (the cost in Sydney, pins MM- ' r? ing charge).' The company then afled & 10s 2d, which -was expressed to'be Jjro- J vision for overhead charges m orde£ t<s provide a price which would roOUTtt . 33 l/3rd per cent. That made £2 17»6d. • In this case the company made additions i of 4s fid and 5s 7d, brining the pricft to . £3 7s fid. They explained the awed . 4s fid as a sum intended to cover extra. risk of dealing in a high grade arttole -; that might g* out of fashion. They aMed 5s 7d, and the company claimed to . De entitled to this as a result of direct buy- •? ing having given them the advantage of ( | four months of the old price. S.i Counsel remarked that no doubt it, . would be urged that a portion of the ex- , tra profit was intended to meet f pos- ■ sible loss on stook in handling a high- . grade fashionable line subject to the whims of fashion, but the allowance aero , provided for the loss of one pair of flw»» . r in every four. The balance sheet o! defendant company's last completed year of operations would be put in, and thatshowed a gross profit on actual sales of 36.27 per cent., or a net profit on' the » actual trading for the year dn the total ■.,{ money employed in that trading of 34.32 ■ per cent. The net profit on the paid-up J capital of the defendant company was r| 75.92 per cent., and the net profit on tno ■ > selling prices, after providing fW Wtoy- jj thing, was 15.02 per cent., or 3b oil every i £1 handled. ,1 Charles E. Phillips, secretary to ,tno , v l Board of Trade; gave evidence of the complaint that the pair of shoes in .,S tion were bought for £3 7s 6d, plus 3s Im, for buckles, aTtd that on the shoes alone i that showed a profit of 54.9 per cent. \ Ephraim Kitchener, manager for Pea •• 1 1 son and <?o., stated that in arranging sale ,• j prices .his firm fixed a profit of .33 l/3rd per cent, on high grade shoes of ex- y treme fashion. That was on the selling ~- r.j price, or about 50 per cent, on the cost g price. On children's boots and otlwr - every-day lines the margin of profit w>w J cut to 121 per cent. The higher profit on J the other "lines was justified by gi'eater risk of loss at the moment. For the defence,"Mr. McVeagh said thearticle in regard to which the J laid was one of very special add peculiar " « character, Inasmuch as the only persons '4 Who made the demand for that elass ol '.jj shoe were people who were in a position Jj to indulge their fashion. He would ajld, a '^g very extravagant fivjhion. ,It was ashoj .1 which caffio into existence simply ftod j| solely because of fashions. The shoe Iftd J to be considered from an entirely differ- $ ent standpoint from a boot sold qyery 4 day, and characterised as a bread and a butter line. It was entirely upon the' J whims and vagaries of ladies of fashion who wore them, not because of their utuity, but to attract attention. - Thai# shoes must be sold at a loss should tna r | fashion terminate. Wlien fixing the re* ,t tail price of that shoe the questigiLof re- • placement had to be considered. , & The Magistrate: "That, if allowed to. a go on profits, might go up to one .thou-c | sand per cent., and it might not be con- ; v sidered an unreasonable price." , 2 Dealing with the matter of' pnwt, | counsel said the company's balance sheet. ;,{] showed it was something lilje 15.62 per cent, on an average which covered the . whole trade. The shoes in question were % bought wholesale in Sydney, ■ laft#g "i charges were £1 18s 3d, and the rttafler ; paid £2 7s 9|d. To this was adtya 33 l/3rd per cent, for overhead thM®M, « and this raisef the price to within* a ■ \ fraction of £3 3s 9d. They were y>lda« : £3 7s fid, and the profit would be 3s 94- -sj T]fat would be 10 per cent, profit, and that was nothing like a reasonable profit, having regard to the nature of the slitWS; Evidence was called in support, and the case was adjourned sine die.