Ashley sues Lifestyle Enterprise over numbers

Claims ranking, advertisements overstate size, growth rate

Tom Russell -- Furniture Today, August 26, 2008

ARCADIA, Wisc. - Ashley Furniture is suing competitor Lifestyle Enterprise over what it claims are false statements and advertising regarding its financial position.

The suit, filed in U.S. District Court for the Western District of Wisconsin, challenges statements Lifestyle made regarding its sales in industry trade newspaper Furniture/Today's May 19 list of Top 25 Sources for the U.S. Furniture Market.

On that list, Lifestyle claimed its 2007 sales rose 17.6%, from $357 million to $419.9 million, placing it at No. 8 on the list, up from No. 11 in last year's ranking.

Ashley claims that information is misleading given that other furniture companies on the list only experienced low single-digit increases. Some experienced sales decreases as high as 25%. On that same list, Ashley ranked No. 1, with $3.05 billion in sales in 2007, up 2.9% from 2006.

Ashley said Lifestyle's double-digit increase is highly unlikely given the downturn the industry experienced in 2007. Ashley also claims that in a previous settlement, Lifestyle told Ashley its sales were declining and that the company was losing money.

Ashley also disputes Lifestyle's statements in its promotional materials that it is the "fastest-growing company in the U.S.A." It claims such statements are likely to deceive a "substantial part of its audience, including customers and potential customers of Ashley" and that its statements "are likely to influence purchasing decisions made by Ashley's customers or potential customers."

Ashley said these acts constitute false advertising and deceptive trade practices and are a violation of the Latham Act and the Wisconsin Deceptive Trade Practices Act. It seeks damages that represent the business Ashley has lost to Lifestyle as a result of such advertising as well as profits that Lifestyle has gained from such practices.

Ashley also is seeking attorney's fees related to the case and demands that Lifestyle retract the aforementioned statements in Furniture/Today in a way that clarifies and better represents its sales position in the marketplace.

An attorney for Ashley was not immediately available for comment. Officials with Lifestyle also were not available for comment.