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The Rolex War Rages On for Beverly Hills Jeweler

November 13, 1987|PAUL DEAN | Times Staff Writer

Jeweler Carl Marcus doesn't mind being known as the pawnbroker of Beverly Hills. Because, he acknowledges, he does make no-interest loans to close customers, holding as elegant collateral their Mercedeses, their LeRoy Neiman originals, even the gold Audemars Piguet watches he sold them in flusher times.

Marcus will not flare at a discussion of his dingy past, of being a New York street kid, of menial jobs in a depressing youth where his two years of county time for burglary was an improvement in life style.

But mention Rolex.

"Their ads are going to destroy my business," he storms.

The suit is Brooks Bros. and the car he drove to work this day is a Rolls-Royce Corniche convertible, but the voice is gruff and thick with Far Rockaway anger. "Customer inquiries are down 50 calls from 150 calls daily. The Wall Street Journal has just called to say they won't take my ads and I've been advertising daily with them since 1980.

"This is the end of everything. Once you lose your credibility, it's the end. I can't afford to sue Rolex . . . and if you get into a battle of newspaper advertisements, it'll end up like a Tammy Bakker thing."

Four weeks ago, nothing was this bad.

Marcus, 53, was high-profile owner of a discount watch and jewelry business--by national mail orders and California showroom sales--that in 15 years had grossed $150 million.

An office wall at Marcus & Co., his showroom in an upscale skyrise next to the Beverly Wilshire Hotel, is a gallery of household names.

Best wishes from Sinatra. Thanks for everything from Carson. Y'all terrific, signed Vanna White. With wedding congratulations to Carl and Rosie Marcus from Ronald and Nancy Reagan.

A company brochure makes mention of "over 20,000 satisfied customers."

Then, last year, came one dissatisfied customer, Kathleen Harvey of Los Angeles.

She testified in Beverly Hills Municipal Court that Marcus had sold her a gold Rolex for $5,600. He had told her it was a new watch. Two days later, after another jeweler had stirred her suspicions, Harvey took the watch to an authorized Rolex dealer.

He told Harvey, and so testified on her behalf, that a registration number on the Rolex indicated that it was 6 or 7 years old. A watchmaker's mark, coincidentally his own, proved prior ownership by a man in San Diego.

In court, Marcus testified that he himself was duped, that he purchased the watch from a jewelry dealer in New York who said it was new. It was, Marcus said, a single, honest, regretted business error.

But on Sept. 30, Judge Charles D. Boags found for Harvey and awarded her compensatory damages of $6,000 and punitive damages of $19,000. And she got to keep the watch. Marcus is appealing the decision.

Rolex Steps In

The complaint and its conclusion could have ended there . . . except representatives of Rolex Watch USA Inc. of New York had been monitoring the case and, said John Flaherty, an attorney for Rolex, "we tried to find out everything that was relevant to this particular incident."

A week ago, Rolex took out quarter-page advertisements in the New York Times, the Los Angeles Times and USA Today.

It was addressed "To Consumers Who Have Purchased Rolex Watches From a Company Known as 'Marcus & Co' or from 'Carl Marcus.' "

It offered free examination of such watches to determine if the watches were new or used at time of purchase.

And to buttress the offer, Rolex referred to Harvey vs. Marcus & Co., Carl Marcus et al, noted the judgment and its amount against Marcus, and quoted significant paragraphs contained in Judge Boags' ruling:

"The Court, after listening to (Carl Marcus) found that he has been advertising his services nationwide and has been selling used watches, like the one in issue to many unsuspecting customers as new. . . . The court believes that Mr. Marcus' sale and advertising practices are completely unacceptable in any society."

Rolex attempted to place its advertisement with the Washington Post. It was rejected, according to a Post spokesman, owing to confusion over Marcus' precise connection with a Washington firm that uses his name and sales method in a discount watch and jewelry business.

(According to Marcus, he sold rights to the use of his name and marketing technique in 49 states to Alan Furman, a Washington, D.C. businessman, in 1984. Furman currently does business as Carl Marcus & Co. Inc.)

The Wall Street Journal found similar problems with Rolex's public message, and also declined to run the advertisement.

"From what we had here we couldn't ascertain a connection between Marcus on the coast and Marcus in Washington," explained Bob Higgins, the Journal's director of advertising services, "and we want a better explanation of their involvement."

Customers' Rights

Despite these rejections, said attorney Flaherty, Rolex must insist on "the right to inform consumers and defend the integrity of our product.

"He (Marcus) is not an official Rolex jeweler . . . and Rolex's job is to pick jewelers that best represent the image.

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