OFT probes Oakley and House of Fraser

Oakley and House of Fraser have been accused by the Office of Fair Trading of fixing the price of Oakley sunglasses at the department store.

The discovery followed a two-year investigation into whether the companies had breached the Competition Act 1998, which prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK.

According to the OFT, Oakley supplied House of Fraser with its sunglasses from November 5 2001 to March 2004 on the condition that the store agreed to sell them at prices no lower than the Oakley suggested retail price.

Top-of-the-range sunglasses at Oakley retail for £200, while the cheapest pair cost around £50.

The fashion eyewear company 'strenuously denied' the allegations and John Pollard, director and general manager of Oakley UK, put it down to a misunderstanding.

'We believe that the investigation by OFT is based on a misunderstanding of our dealership arrangements. We are looking forward to satisfying the OFT that there has been no breach of the Competition Act,' he said.

The two companies now have 10 weeks to make written and oral representations before the OFT makes its final decision whether to impose a penalty.

It has the power to set a fine of up to 10 per cent of the companies' turnover, which for House of Fraser totalled £656.6m in 2004/05.

Oakley worldwide net sales grew to a quarterly record $173.4m, compared with $150m in the third quarter of 2004.