Sears accused of misleading public on Craftsman line
A lawsuit says the company wrongly claimed its tools were made in America. A California judge refuses to certify class-action status, but plaintiffs say they will appeal.
Sears Holdings (SHLD) says its Craftsman line is America's most trusted tool brand. But are those tools even made in America?That issue is at the forefront of a claim that the company snookered consumers into believing that its famous Craftsman tools were made in the U.S. Sears has beaten back the lawsuit for now, but the battle appears to be far from over.
A California judge rejected an effort late last month to certify the suit as a class action. In his 42-page decision, Los Angeles County Superior Court Judge Anthony Mohr argued that there were "serious problems" with the case and that it would be a "nightmare" to manage because there are 40 million potential class members, according to the National Law Journal.
Sears, which registered the Craftsman trademark in 1921, cheered the decision. But Barbara Hart, the attorney representing the plaintiffs, said the ruling will be appealed. In an interview with MSN Money, Hart said that her clients will seek certification under a narrower class definition.
"We are pleased with the court's ruling but as the matter is still pending, we decline to comment further," Sears spokesman Larry Costello wrote in an email.
Costello declined to say how many Craftsman tools were made in the U.S. and Hart, who filed suit against the retailer in 2004, isn't sure either. After the suit was filed, Sears took Craftsman tools off the shelves and blacked out the words "Made in America," she said.
Sears will not share records about where its Craftsman tools are made, but Hart said the company utilizes more than 130 Chinese manufacturers for the Craftsman line.
Craftsman has been one of the few bright spots for Sears in recent years as the retailer has struggled to compete against larger rivals such as Wal-Mart (WMT) and Target (TGT). The stock has slumped more than 20% in the past year. Sears not a bargain for investors, trading at more than double its average 52-week price target of $17.83.
According to a recent report in the New York Times, the "Made in the USA" label has grown in popularity because it is a "signifier of old-school craftsmanship." It's also hard to find in today's global economy. The U.S. trade deficit with China alone is about $232 billion.
--Jonathan Berr is long Target. Follow him on Twitter@jdberr.
More from Money Now
Stop blaming the stores. We have to take the blame for buying the cheaper product in the first place. If they want to compete then they have to do the same thing.
The other thing to think about if they are made over seas they probably sell them in more markets, so there would be a volume discount working as well.
You know, Craftsman tools and thousands of other products could still be made here in America if it were not for the unions.
Nobody wants to pay $20 for a pair of pliers made by some union yahoo making $30 an hour plus benefits.
The reason Wal-Mart, Target and the like are so busy, people want a product that does the job and doesn't cost an arm and a leg.
If the people at McDonalds flippin burgers were union, the cheap burger would cost you $4.
ABOLISH the unions and you'll bring jobs back to America.
In 1999 there was a scandal known as the "Saipan Scam" - very deceiving in there advertising, but Sears; I am disappointed they have their tools made in another country now, but it is labeled on their tools.
I also would like to add there are many products made in America. General Electric washers and dryers are 100% made in America and we bought a set. GE brought all their washers and dryers production back from overseas to American shores - parts and all.
Many of our retail stores pile up on products from overseas to make a profit. How they make the profit can be a very sad story when at times it is off the backs of children and adults. But, there are legit businesses too. We as the consumer have to take the time and research. And as my 95 year old grampa friend says: "Even if I have to pay more for a product made in America I am willing." It is a tough market and we are the buyers. We have a responsibility too.
I bought a huge tool set from Sears MANY years ago in the mid 80's. When I received them I found a lot of them said "Made in Taiwan", The catalogue I ordered them from had many statements:
Made in America, (USA) always has been and always will be.
I took all the ones marked "Taiwan" back to Sears and they replaced them with the Made in USA
ones. For a lot of years after that they still said made in USA. Don't know about now though.
DATA PROVIDERS
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Japanese stock price data provided by Nomura Research Institute Ltd.; quotes delayed 20 minutes. Canadian fund data provided by CANNEX Financial Exchanges Ltd.
RECENT POSTS
While incompetent bosses like Michael Scott and Andy Bernard typically can’t survive in the workplace, office romances are a very real part of corporate culture.
- Southwest Airlines turns less legroom into $773M
- 'American Idol' gets sorry ratings for season finale
- Powerball's wacky sense of humor
- Millions of Facebook's users are actually pets
- Can crowd funding rescue the LA Times?
- Domino's debuts a DVD that smells like pizza
- Average US retirement age climbs to 61
- McDonald's aims to slim down its 145-item menu
- Bathroom reading goes digital with iPad TP stand
MARKET UPDATE
[BRIEFING.COM] The S&P 500 ended this week with a bang, roaring to a new all-time high on the back of stronger-than-expected economic data, influential leadership, and an ongoing appreciation for the Fed's monetary policy support.
The bullish bias was evident in premarket action as the S&P futures pointed to a higher start without the benefit of any definitive news catalyst. Stocks indeed benefited from a blast of buying interest at the opening bell on this ... More
More Market News
TOP STOCKS
All hail the bull market, which ended the week with a big rally. But it also is starting to look a little like 1987, which suffered an epic blow-out.
MSN MONEY'S
- Shared
- Commented
- Viewed
