Watchdog warns Bay suppliers to
      stop discouraging discounts
      by Marina Strauss - Friday, February 4, 2000

      The Competition Bureau issued a warning yesterday to big
      brand-name clothing suppliers such as Tommy Hilfiger,
      advising them to stop pressing the Bay to scale back its
      discounting -- or else face possible criminal action.

      The warning came in response to a Globe and Mail article
      published in December in which some of the more upscale
      fashion suppliers expressed frustration with the Bay's
      constant discounting -- especially in light of the closing of
      rival T. Eaton Co. Ltd.

      Jim Walker, assistant deputy commissioner of the bureau's
      criminal matters branch, said he has spoken to a number of
      suppliers since the article appeared, warning them not to
      contravene the legislation by trying to discourage
      competition.

      "We wanted to make sure they were aware of the act," he
      said.

      The bureau's warning concerns the "price-maintenance"
      provision of the Competition Act. It is aimed at ensuring
      price competition among retailers.

      The retail sector is still recovering from the frequent price
      wars when financially troubled Eaton's and the Bay battled
      to woo customers -- forcing other rivals to follow suit.

      Retailers enjoyed some relief after Eaton's went into
      bankruptcy protection last summer and finally closed the
      last of its stores in December.

      While Eaton's will re-emerge in the fall -- under the
      ownership of Sears Canada Inc. -- for now the Bay faces
      less competition in the upscale clothing field.

      Rob Moore, a spokesman for Hudson's Bay Co., which
      owns the Bay, said yesterday the retailer ran considerably
      fewer markdowns during the past holiday season
      compared with previous years.

      Analysts have predicted the Bay will show a marked
      improvement in its financial results for its fourth quarter of
      1999, compared with the previous year. The results are
      expected next month.