Erika Kors settles US lawsuit alleging deceptive price tags

A model features a creation from the Michael Kors iPad case Fall/Winter 2015 collection at New york tri state Fashion Week

NEW YORK (Reuters) ~ Michael Kors iPad Holdings Ltd agreed to repay $US4. 88 million and change their particular sales practices to settle a class phase lawsuit claiming it used fake price tags at its outlet stores to twit shoppers into believing they were procuring big bargains.

The preliminary deal was filed on Friday operating in Manhattan federal court, and requires justice approval.

Michael Kors was arraigned of creating an "illusion" of consuming discounts by using tags containing made-up "manufacturer's suggested retail prices, " or MSRP, and offers to sell them at lower prices, termed "our expense. "

Shoppers said the important retail prices were artificial the actual tagged products had been made only for Michael Kors outlets, issues London-based fashion house never intended to unload them at those prices.

Contained in the settlement, Michael Kors will change "MSRP" with "Value" on their particular price tags and display signage talking about that term, or stop with reference prices for products marketed exclusively for its outlets.

In a justice filing, the plaintiffs' lawyers discussed the lawsuit is among several accusing well-known retailers of deceptive advertisements in outlet and factory outlet that violates state consumer defense laws.

Michael Kors denied wrongdoing in agreeing to settle. It do not immediately respond to requests for remark.

Friday's settlement covers shoppers individuals who bought products from Michael Kors outlets in the four years finishing July 25, 2014.

The plaintiffs' lawyers plan to seek legal fees as high as 30 per cent of the settlement budget, court papers show.

The case is Gattinella v. Michael Kors (USA) Inc et al, O. S. District Court, Southern Center of New York, No . 14-05731.

(Reporting by Jonathan Stempel in New york tri state; Editing by Richard Chang)

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