Stuff-Mart v. Saks Fifth Avenue

In principle, at least. First, a battle in Birmingham:

The owners of The Summit say Belk isn’t good enough to replace Parisian in the Birmingham shopping center and have filed a lawsuit to keep out the Charlotte-based retailer.

Bayer Retail Co. LLC’s lawsuit, filed in Jefferson County Circuit Court, says Belk operates moderate-price department stores that would not fit into the self-described “first-class retail shopping center.” Converting the Parisian to a Belk would “impact Bayer’s ability to attract and keep first-class retail tenants at The Summit” and would tarnish the center’s image as a shopping destination, the lawsuit says.

Sometimes folks wonder how a lawyer can defend rapists/murderers/drug dealers, but if the alternative is stuff like that, well, I think the choice is clear.

What won’t be clear is who is going to win the dispute. It’s a contract issue:

Birmingham-based Saks Inc. said in August it was selling the Parisian chain to Belk Inc. in a deal valued at $285 million. Belk said all Parisian stores, including the three in Birmingham, would be renamed and converted to carry Belk merchandise. The suit contends the conversion would violate a covenant in the lease Parisian’s owners signed in 1996.

The lease at The Summit calls for the retailer to operate “a first-class retail fashion department store” for the first 15 years of the 21-year lease, according to the lawsuit. “If the Parisian store at The Summit is converted to a Belk department store, it will not be a first-class retail fashion department store,” the suit says.

The whole trial will be over whether or not Belk is “a first-class retail department store.” I have no idea whether it is or not. Nor do I know how to make that decision. I guess it involves the comparative ratio of Levis to Polo jeans. Or maybe which perfume department gives passersby the worst headache. Or who can get the most people to spend a benjamin on underwear. I wonder who the experts will be? Any suggestions?

Second, Scotus may close TJ Max:

The Supreme Court has moved closer toward re-examining one of the biggest and hoariest precedents in antitrust law, known to law students everywhere as the Dr. Miles rule.

In an order released Aug. 28, the Court issued a stay of a judgment of the 5th U.S. Circuit Court of Appeals in a case that squarely tests the Dr. Miles precedent.

Under that rule, established in the 1911 case of Dr. Miles Medical Co. v. John D. Park & Sons Co., minimum prices manufacturers set on what dealers can charge customers for their products are deemed as illegal per se under the Sherman Act, no matter what evidence might be presented.

What the rule means is that when Manufacturer sells to Dealer, Dealer must be left free to charge Customer whatever Dealer wants to charge Customer, rather than being forced to sell to Customer at a price fixed by Manufacturer.

Why would Manufacturer complain, you ask? After all, they make their profit when they sell to Dealer, so why should they care what Dealer does? It’s all about image. Hoity Toity Manufacturer can’t have its stuff sold too cheaply, or Hoity Toity consumer won’t buy the stuff anymore. So Manufacturer wants to tell Dealer that it may not re-sell the product below a certain amount.

Most of the time, the prices won’t fall too far because Dealer has to recover what it paid for the product, as well as advertising, overhead, displays, customer service and the like. But some Dealers don’t bother with that stuff. They “free-ride” off the work done by other Dealers. In other words, the work of the other dealers gets the word out about the product, and so the Discount Dealer can just sell the product, while saving money on advertising, service, and displays. Because they don’t spend that money, they can sell the merchandise for much lower prices. Think T.J. Max, Burlington Coat Factory and Big Lots. You always find those stores near regular stores. It’s because they are mooching off the work of the regular stores.

If the Dr. Miles rule is abolished, then these discount stores will have to charge the same retail price as do the regular stores. That means if you go to them, you’ll still get no advertising, service, or cleanliness, but you’ll pay the same amount for the product that you would in the regular store. So they will either die, or else become regular stores.  

Given the amount of money I’ve saved at those places over the years, I’m not too excited about that prospect, even if it may be the right result.

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13 Comments on “Stuff-Mart v. Saks Fifth Avenue”

  1. quaoar Says:

    Bayer may have a point.

    I have always done most of my Xmas shopping at the Summit Parisian.

    Not this year. Belk sucks.

  2. localshopper Says:

    I agree, Belk is a like a red-headed step-child. Parisian was tops and classy. Summit owners, do not let those country bumpkins and T.J. Maxx seconds clothing store next to the othe upscale stores. Please, please, please


  3. […] in a case I previewed here, Scotus heard oral arguments this week on whether or not to destroy T.J. […]

  4. Gilbert Walker Says:

    I am going to say honestly I hate Belk. I am an employee with them. Well I started with Loss Prevention with Parisian but I am officially a Belk employee. And I hate their systems they have in place and I think they are some of the dumbest I have ever seen.

  5. Del Says:

    fwiw I agree w/ quaoar. Belk has some pretty dowdy duds.

  6. Emily Says:

    Belk stinks and I let the people know at the Tallahassee Parisian that they have lost a long-time customer. All Belk is is a glorified Kohl’s!!!!!!!

  7. Godfrey Says:

    In all sincerity, Belk is far behind other retailers in almost every aspect of their company. They will soon get too big for their britches. It’s a terrible company to work for.

  8. Dick Vranek Says:

    Two options listed. One or the other of these two options is true beyond any doubt in my opinion.

    1. Belk is generally corrupt at upper mgmt levels

    or

    2. Belk has completely incompetent (and I do mean ignorant & clueless) people at upper mgmt levels.

    But please don’t take my word on it. Do your own research.

    • Lorena Says:

      As a employee who was recently fired under strange and unfair pretenses, I agree totally.The only way to stay employed with this company is to do some real brown-nosing.

      If you don’t, and have your own state of mind, it is not appreciated.

      Our management was extremely ignorant, rarely capable of answering the easiest of my questions.

      I feel as if this termination was a blessing, because I completely hate Belk. Will never shop there again, and will warn all friends and family before they attempt to apply.

  9. Will Small Says:

    Try to keep the low life Belk out of your town. They teat their help bad, have lock them in the store at night with chains around all doors to include the emergency doors-we had to call OSA to get that stopped. Now they give pay cuts yearly instead of raises if sales are down in your area. We have no control over what we carry in the store.

  10. marsha john Says:

    Belk sucks…………

  11. shelly tate Says:

    Belk is awful. Working for them is a nightmare.Please tell all your friends that they target young African American males, they feel they are most gullible. They approach them to open Belk credit cards.If there are any lawyers reading this please contact belk employees we have so much to bring to a class action law suit.Please help this company is truly evil!

  12. Ronald Deutchenstauge Says:

    I work at Belk. It is a terrible place. Please, If you are a customer complain. You are the only ones that can get anything changed. Also, take your business to macy’s and dillard’s. Seriously, they are much nicer HANDS DOWN and have a much better selection. Shopping at Belk means supporting wage slavery.


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