Swimwear Maker Takes Dillards to Court

Tampa Bay Business Journal by Carole Clancy, Staff Writer

A Bay Area men's beachwear manufacturer is suing Dillards Latest from The Business Journals Dillard's St. Louis stores give ,575 to Ronald McDonald House R.G. Barry deals paying off on bottom line Follow this company , claiming the department store chain owes it tens of thousands of dollars in overdue invoices in a dispute that raises questions about whether big retailers are putting the squeeze on their smaller suppliers.

Steve Williams, president and CEO of Tampa-based SunSports, said Dillards maintains that SunSports actually owes it money as a result of swimwear that either didn't sell or was sold at such deep discounts that Dillards now believes it overpaid for the merchandise.

SunSports had charged Dillards a total of $400,000. In dispute is $68,878 in still-to-be-paid invoices.

Williams said he learned earlier this summer that Dillards planned to hold the money to cover its markdowns, and that it had frozen SunSports' account until the dispute was settled.

Williams said Dillards offered to settle the issue by reducing SunSports' bill, but that he had refused the offer.

A Dillards official reached at the company's Little Rock, Ark., headquarters declined to comment, referring questions to the company's lawyers. They, however, did not return telephone calls.

At the heart of the dispute is SunSports' contention that Dillards abruptly changed the way it handled discounted or unsold SunSports merchandise by asking SunSports to rebate a portion of what Dillards had already paid for the merchandise. In the past, Dillards had deducted so-called markdowns from the next round of invoices submitted by SunSports, according to Williams.

"The dispute is over the timing of the markdowns -- when can (Dillards) take credit for the markdowns," Williams said. "We've established a pattern that SunSports markdowns go against future business."