Levi-Strauss UK has been slammed by Matalan, one of the UK’s largest discount clothes retailers, for operating a restrictive distribution policy which has reduced the chain’s Levi’s supplies to a “trickle”.
Matalan, a membership club with 2.3 million members, has referred the case to the Office of Fair Trading. But the OFT has declined to investigate Levi’s distribution policy, as Matalan does not have 25 per cent of its markets.
Matalan claims Levi’s has restricted supplies because of the chain’s status as a membership club. After the collapse of the OFT referral, Matalan directors are considering “other options”.
Matalan operations director Duncan Sutherland says: “Levi’s has no right to dictate who we let into our stores. They trickle product through to us although they see we can sell more. But they say we are not freely open to the general public, and that charging a membership fee is restricting entry.”
Levi’s refused to comment on specific cases. The call for an OFT probe comes as Levi’s delists more than 450 retailers which fail to meet strict merchandise criteria introduced in 1993 under the Retailer Distribution System. The delisted retailers include multiples and independents.
Marketing manager Roy Edmondson says: “The RDS is part of a pan-European programme to give consistent, unified marketing of the brand, and to reinforce it as the world’s premium brand. It has nothing to do with retailer pricing.”
There are 4,000 outlets in the UK selling Levi’s products. The RDS sets standards for product range and display, service and location and design of stores.
* The OFT has launched a 24-hour telephone hotline to receive complaints of any price-fixing and market-sharing.