Kathmandu fined for misleading sale prices

Kathmandu has been fined $48,000.

Outdoor clothing and equipment retailer Kathmandu has been fined $28,000 for falsely advertising clothes as being at a bargain price.

Kathmandu was sentenced yesterday in the Auckland District Court after earlier admitting seven charges of breaching the Fair Trading Act.

The company was found to have advertised some vests and jackets as being marked down by 60 per cent during three sales in 2004 at its Queen St store, when the items had been listed at the same prices before and after the sale.

Commerce Commission investigators visited the store and found the items had been marked down in price for months before the sale and remained at the discounted price for months after.

Commission lawyer Erin McGill told Judge Anne Kiernan that the commission was seeking a fine of about $30,000.

Ms McGill said there had been no direct financial loss to consumers and the offending was "best characterised as careless".

But there had been a clear breach of the act, shoppers had been misled and the sentence needed to provide a strong deterrent to other businesses.

Kathmandu's lawyer, Pheroze Jagose, made only a brief submission, and said the company would be happy with a fine of about $30,000.

Judge Kiernan said the offending was at the lower end of the scale, but it had been a clear breach and a deterrent fine was needed.

She said $40,000 would be the starting point, but she took into account that Kathmandu had complied with its requirements since the charges were brought, and had appointed a compliance officer and started nationwide compliance training.

Judge Kiernan fined Kathmandu $4000 on each of the seven charges, with costs of $130 for each charge.

Kathmandu general manager Mark Todd apologised to consumers.

"The systems and processes that allowed this to happen have long been remedied," he said. "However, we are very sorry for any confusion caused. Kathmandu will ensure these issues don't arise again."

- NZPA