Bay Area-based Ross Stores, Inc. will be paying a $3.9 million penalty for failing to report to a federal watchdog agency that it was still selling a brand of children’s clothing even though regulators had warned that defective drawstrings on the garments could strangle young kids.
Officials with the U.S. Consumer Product Safety Commission say from January 2009 through February 2012 the discount retail chain knowingly failed to report to the commission that it was selling or still had stocked in its stores about 23,000 children’s jackets and sweatshirts with defective drawstrings at the neck or waist.
The agency had earlier ordered a recall on the clothing, warning the drawstrings could injure or kill a child if they became caught on playground equipment, cribs or school bus doors.
Terming the Pleasanton-based retailer a “repeat violator,” Inez Tenenbaum, the head of the commission, noted that Ross had paid a penalty of $500,000 for a similar violation in 2009:
“It is my hope and expectation that the message we are sending with the substantial fine and the compliance requirements in this agreement will increase the likelihood that Ross — and other firms … will take all necessary steps to ensure they produce and market only compliant products, thus obviating the need for any reporting at all.”
In agreeing to the settlement, Ross did not admit to any wrongdoing. Company spokeswoman Connie Wong said in a statement the retailer had cooperated with the commission’s investigation:
“Ross Stores has a deep commitment to customer safety in all that we do. We cooperated fully with the CPSC on this matter and did not knowingly violate any laws, rules or regulations. More importantly, no one was injured by any Ross products. … When we became aware of these issues, we took swift and strong remedial action that included self reporting the majority of the non-compliant inventory to the CPSC.”
With 1,091 locations in 33 states and 2012 revenues of $9.7 billion, Ross says it is the largest “off-price” apparel home and fashion chain in the U.S.