Tesco keeps up battle on cheap designer goods

TESCO, the supermarket giant, last night announced plans to sell cut-price "grey market" designer items permanently at two designated stores.

The move came despite a European Court ruling last month that retailers could not sell designer products bought through unauthorised channels outside the EU.

The two supermarkets, in Pitsea, Essex, and New Malden, Surrey, will sell brand-name products such as Levi's 501 jeans, Adidas sportswear and electrical and household goods, as well as food.

John Gildersleeve, commercial director of Tesco, said: "This is what our customers have been asking for, now they have a chance for unparalleled bargains on an ongoing basis.

"Each range we stockpiled and sold was so popular we have decided to do it on a continuous basis with as many lines as we can in these two newly-dedicated stores."

The store had stocked top names such as Nike, Levi's, Calvin Klein and Tommy Hilfiger selling at knock-down prices against the manufacturers' wishes. The store had been able to sell Levi's at pounds 30 a pair compared to the typical price of pounds 50, a practice which brand names felt reduced the credibility of the clothes.

Hilfiger claimed in May that the T-shirts and sweat shirts bearing its name on sale at 50 of Tesco's 550 stores were counterfeit, after sending undercover teams to buy the so-called designer fakes.

Tesco denied they were fake but admitted they had been bought on the grey market.

Similar refusals to be bound by the ruling have come from other stores, including Asda, which tomorrow plans to set up a stall in one of its stores offering brands bought on the banned "grey market".

Asda will offer the cut-price goods in its Wakefield store, and is even running a free coach to the sale from outside the up-market Harvey Nichols shop in Leeds.

Asda refused to say which brands would be on sale at the store for fear of injunctions from manufacturers. But spokesman Nick Agarwal said a range of goods, including perfumes, watches, sunglasses, bags and ties from "some very very well-known names", would be on offer.

He said: "This is new stock and some of the goods may be sourced from the EU. This is the first time anyone has sold these sort of goods since the ruling. But the ruling itself is very unclear and it may well be that we aren't prevented from doing this. That would be good news for shoppers."

Asda staff dressed in top hats and tails will stand outside Harvey Nichols tomorrow morning carrying placards inviting shoppers to get on a coach to the Wakefield store to take advantage of the cut-price goods.

Tesco is also cutting the price of top Premiership football team kits from today as part of its challenge to higher-priced consumer goods.

The supermarket has secured pounds 1m worth of the new Manchester United and Liverpool home strips and will be selling the shirts at pounds 33 compared to standard high street price of pounds 45.

Mr Gildersleeve said the group has decided to attack the replica market again after the success of its England and Scotland World Cup shirt deals.

However, he said the company had been denied supply from the brand owners, with the result that the grey market had been the only source open to the store.