July 12, 2012 / 4:54 PM / 6 years ago

Groupon India drops rogue deals on American Eagle, Abercrombie

CHICAGO (Reuters) - Groupon India has removed at least two deals for clothes by retailers American Eagle Outfitters Inc (AEO.N) and Abercrombie & Fitch (ANF.N) from its web site, because it did not have the rights to sell them, the company told Reuters.

“The retailer is not authorized to sell this product, we will investigate the situation to determine appropriate next steps,” American Eagle Outfitters spokesperson Rachel DiCarlo told Reuters in an email. She said the company could not be specific at this time about whether it will pursue legal charges.

Crazeal.com, a Groupon-owned Indian web site that offers daily deals on items ranging from clothing to spa deals to vacations, did not respond to an email seeking comment, but its parent company, Groupon, said they have taken the deal away.

Crazeal offered deals to sell American Eagle linen shirts, Abercrombie & Fitch T shirts and Hollister socks on its website at discounts of more than 50 percent.

“We were led to believe that the products sold by our partner were authorized by American Eagle, but upon review, have determined that they do not possess those rights. Because of the error, we have immediately removed the deal from our site,” a Groupon spokesperson told Reuters.

Groupon later said it had removed the deal offering Abercrombie & Fitch T shirts while it verifies the reseller certificate.

Groupon, a daily deals website was started by music graduate Andrew Mason. As a private company, Groupon was one of the fastest-growing businesses in history and in November pulled off one of the largest Internet IPOs of the past decade, valuing the company at well over $10 billion. It bought the Indian website, then called sosasta.com, in 2011.

Neither American Eagle nor Abercrombie have a presence in the Indian market. Online retailers often sell dated merchandise from international brands in markets where there is demand, but they have to make sure their suppliers are authorized to sell the merchandise in those countries.

International retailers have been eyeing the Indian market for years now, but various laws and regulations make it difficult for them to break into the territory.

A plan to open India’s retail sector to supermarkets such as Wal-Mart Stores Inc (WMT.N) stalled last year after a fierce political backlash, although the government is now pushing to revive it. More recently, Swedish furniture maker IKEA IKEA.UL announced its plans to invest in India over a period of 15-20 years after the government removed foreign investment caps in single-brand retail in January.

Nivedita Bhattacharjee in Chicago and Alistair Barr in San Francisco; editing by Sofina Mirza-Reid

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