WASHINGTON — The Cashmere & Camel Hair Manufacturers Institute has withdrawn its lawsuit against Laura Ashley Holdings in the U.K. as part of a settlement agreement over mislabeled cashmere.

In its lawsuit, CCMI alleged Laura Ashley was falsely labeling cashmere sweaters as “pure,” when independent tests revealed they contained sheep’s wool. The institute alleged a breach of U.K. labeling regulations and sought criminal penalties in the claim.

As part of the settlement, Laura Ashley, a home furnishings and fashion firm based in London, has agreed to conduct independent testing of the cashmere garments it sells to determine whether they are “pure.”

“This is the first legal action we have won outside of the U.S.,” said Karl Spilhaus, president of CCMI, which works internationally to ensure garments claiming to contain these high-end fibers aren’t mislabeled. “We are very pleased because we feel this sends a message to the retail community that it needs to be careful about this.”

Laura Ashley executives could not be reached for comment.

CCMI purchased cashmere sweaters from Laura Ashley stores in October 2001 and February 2002 in London and sent them to an independent fiber-testing laboratory, which determined the sweaters were made with a sheep’s wool blend and falsely labeled as “100%” cashmere, according to Spilhaus. He said one of the institute’s primary concerns and findings is that garments labeled “100%” cashmere, particularly from Chinese suppliers, often contain significant amounts of sheep’s wool.

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