[Federal Register Volume 62, Number 34 (Thursday, February 20, 1997)]
[Notices]
[Pages 7786-7787]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-4146]


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FEDERAL TRADE COMMISSION
[File No. 962-3118]


Zale Corporation; Analysis to Aid Public Comment

AGENCY: Federal Trade Commission.

ACTION: Proposed consent agreement.

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SUMMARY: In settlement of alleged violation of federal law prohibiting 
unfair or deceptive acts or practices and unfair methods of 
competition, this consent agreement, accepted subject to final 
Commission approval, would require, among other things, the Irving, 
Texas-based jewelry retailer to disclose, clearly and prominently, the 
nature of the pearl jewelry it sells and would mandate that company 
stores display consumer information about the definition of natural, 
cultured, imitation pearls. The complaint accompanying the consent 
agreement alleges that Zale deceptively advertised its ``Ocean 
Treasures'' line of limitation pearl jewelry as composed of cultured 
pearls.

DATES: Comments must be received on or before April 21, 1997.

ADDRESSES: Comments should be directed to: FTC/Office of the Secretary, 
Room 159, 6th St. and Pa. Ave., N.W., Washington, D.C. 20580.

FOR FURTHER INFORMATION CONTACT: Jeffrey Klurfeld, Federal Trade 
Commission, San Francisco Regional Office, 901 Market Street, Suite 
570, San Francisco, CA 94103. (415) 356-5275.

SUPPLEMENTARY INFORMATION: Pursuant to Section 6(f) of the Federal 
Trade Commission Act, 38 Stat. 721, 15 U.S.C. 46, and Section 2.34 of 
the Commission's Rules of Practice (16 CFR 2.34), notice is hereby 
given that the above-captioned consent agreement containing a consent 
order to cease and desist, having been filed with and accepted, subject 
to final approval, by the Commission, has been placed on the public 
record for a period of sixty (60) days. The following Analysis to Aid 
Public Comment describes the terms of the consent agreement, and the 
allegations in the accompanying complaint. An electronic copy of the 
full text of the consent agreement package can be obtained from the 
Commission Actions section of the FTC Home Page (for February 10, 
1997), on the world Wide Web, at ``http://www.ftc.gov/os/actions/htm.'' 
A paper copy can be obtained from the FTC Public Reference Room, Room 
H-130, Sixth Street and Pennsylvania Avenue, N.W., Washington, D.C. 
20580, either in person or by calling (202) 326-3627. Public comment is 
invited. Such comments or views will be considered by the Commission 
and will be available for inspection and copying at its principal 
office in accordance with Section 4.9(b)(6)(ii) of the Commission's 
Rules of Practice (16 CFR 4.9(b)(6)(ii)).

Analysis of Proposed Consent Order to Aid Public Comment

    The Federal Trade Commission has accepted an agreement, subject to 
final approval, to a proposed consent order from Zale Corporation, 
(hereinafter ``Zale''). Zale is the largest retailer of fine jewelry 
products in the United States.
    The proposed consent order has been placed on the public record for 
sixty (60) days for the reception of comments by interested persons. 
Comments received during this period will become part of the public 
record. After sixty (60) days, the Commission will again review the 
agreement and any comments received and will decide whether it should 
withdraw from the agreement and take other appropriate action or make 
final the agreement's proposed order.
    The proposed complaint alleges violations of Section 5 of the 
Federal Trade Commission Act. This matter focused on Zale's 
advertisements for the ``Ocean Treasures'' line of imitation pearl 
jewelry. The advertisements depicted Ocean Treasures earrings, 
necklaces, rings and pendants, and described them as follows: ``Ocean 
Treasures Fine Jewelry. Created by nature, enhanced by man.'' The 
advertisements also included the following statement: ``Zales. The 
Diamond, semi-precious and pearl store.'' The proposed complaint 
alleges that, through these depictions and statements, Zale violated 
Section 5 of the Federal Trade Commission Act by falsely claiming that 
the Ocean Treasures line of jewelry is composed of cultured pearls.
    The Federal Trade Commission recently revised its Guides for the 
Jewelry, Precious Metals, and Pewter Industries, 16 C.F.R. Part 23, 61 
F.R. 27212 (May 30, 1996) (the ``Jewelry Guides''). The previous 
version of the Guides as well as the revised Guides address various 
advertising practices in the jewelry industry, including those employed 
by Zale. See, e.g., Sec. 23.2 (Misleading Illustrations); Sec. 23.20 
(Misuse of terms such as ``cultured pearl,'' ``seed pearl,'' ``Oriental 
pearl,'' ``natura,'' ``kultured,'' ``real,'' ``gem,'' ``synthetic,'' 
and regional designations); Sec. 23.19 (Misuse of the word ``pearl''); 
and Sec. 23.18 (Definitions of various pearls). These industry guides 
are administrative interpretations of laws administered by the 
Commission for the guidance of the public in conducting its affairs in 
conformity with legal requirements. While the Guides are referenced in 
the complaint, they do not create a separate cause of action.
    Part I of the proposed order would require that Zale not represent 
that imitation pearls are cultured pearls. Part II would prevent Zale 
from representing that imitation pearl jewelry is or contains one or 
more pearls unless Zale designates the jewelry as ``artificial,'' 
``imitation,'' ``simulated,'' or by some other word or phrase of like 
meaning. Part III would prevent Zale from representing that cultured 
pearl jewelry is or contains one or more pearls unless Zale designates 
the jewelry as ``cultured'' or ``cultivated,'' or by some other word or 
phrase of like meaning. Part IV would prohibit the company from 
misrepresenting the composition or origin of any jewelry product 
composed partially or entirely of natural pearls, cultured pearls, or 
imitation pearls.
    Part V of the proposed order would require Zale, for a period of 
three years, to make available, at each of its stores that sells 
natural, cultured or imitation pearls, a brief fact sheet entitled 
``Your Guide to Pearls.'' This fact sheet briefly defines the 
differences among the three general categories of pearls.
    The proposed order also would require Zale to maintain materials 
related to its advertising of pearl, cultured pearl, and imitation 
pearl jewelry. The proposed order would also require Zale to provide a 
copy of the consent agreement to all employees or representatives with 
duties affecting compliance with the terms of the order; to notify the 
Commission of any changes in corporate structure that might affect 
compliance with the order; and to file one or more reports detailing 
compliance with the order.
    The purpose of this analysis is to facilitate public comment on the 
proposed order, and it is not intended to constitute an official 
interpretation of

[[Page 7787]]

the agreement and proposed order, or to modify in any way their terms.
Donald S. Clark,
Secretary.
[FR Doc. 97-4146 Filed 2-19-97; 8:45 am]
BILLING CODE 6750-01-M