Don't believe your eyes when it comes to women's stockings and hosiery sold by Victoria's Secret Stores Inc., at least according to a lawsuit filed Tuesday against the purveyor of women's intimate apparel.
A New Jersey-based hosiery designer, Zephyrs, alleged in its legal suit that Victoria's Secret's parent company Limited Brands, Inc. (NYSE: LTD) has been misleading customers by selling "knockoffs" of Zephyrs designed stockings. Basically, Zephyrs claims that Victoria's Secret's stockings have been packaged using photographs of leggy models wearing Zephyrs-designed, Italian-manufactured hose while actually selling Canadian-made stockings that are "missing key design features."
According to the legal filing, Zephyrs designed and supplied intimate apparel including hosiery, garters, suspender belts, thongs and various other accessories to Victoria's Secret for more than a decade. However, Zephyrs says that Victoria's Secret has resorted to selling knockoff underwear in an attempt to offset declining profits and has engaged in "false advertising by misleading consumers about the nature and quality of the goods that they are offering for sale."
Zephyrs said it has supplied Victoria's Secret with around $120 million of hosiery and other items over the course of the last 10 years. However, Zephyrs alleged that Victoria's Secret has delayed processing orders to try and wrest concessions from Zephyrs and has directly contacted Zephyrs' manufacturers to try and avoid working with Zephyrs.
Limited Brands declined to discuss the allegations.
Limited Brands reported second-quarter 2012 earnings per share of 50 cents, up two cents from the year before, but overall adjusted net income fell $3.5 million to $147.2 million. Net sales fell to $2.4 billion from $2.6 billion the year before.
Victoria's Secret sells Zephyrs' products through its print catalogue, website and stores. Zephyrs said Victoria's Secret sold knockoffs of products including its Lace Top Fishnet Stockings (UPC No. 0667528034582), Fishnet Thigh-Highs With Backseam (UPC No. 066752804003) and Signature Stripe Thigh-High With Bows (UPC No. 0667525018646).
Limited Brands Inc. (NYSE: LTD) shares rose 0.38 percent to $48.02 Tuesday afternoon.