Sterling Sues Alex and Ani over Supply Deal

RAPAPORT... Sterling Jewelers has sued Alex and Ani for more than $2million over a supply deal that resulted in a dispute over inventory returns,court filings show.The two companies entered into an agreement in August 2015under which Sterling would buy merchandise from Alex and Ani to sell in some ofSterling's Jared stores, according to the lawsuit filed in Ohio last month.That deal stipulated that Sterling could not offer the products at certaindiscounted prices. However, Sterling - a division of Signet Jewelers -struggled to sell the goods, and found itself with inventory of Alex and Ani productsthat, at one point, came to $6 million, it said. The terms of the agreement, as well as Alex and Ani's concerns about effects on its brand, prevented the company from selling the backlog to third parties or reducingprices for consumers, the jeweler explained.In April 2016, the companies agreed Alex and Ani would buy Sterling's entire backlog of the goods, Sterling claimed. They subsequentlyrevised this arrangement such that Alex and Ani would only re-purchase $3million-worth of those products. In August 2016, Sterling returned $896,630 of inventory toAlex and Ani, which did not send payment for the goods, the lawsuit alleged. Sterlingthen terminated the 2015 agreement, and started selling the goods off atcertain discounts to minimize its damages, it said. Alex and Ani sentcease-and-desist letters, accusing Sterling of violating the original agreement- a claim Sterling considered to be incorrect. At the time of the filing, Sterling held about $1.7 millionof Alex and Ani inventories, the lawsuit stated. Sterling is entitled to morethan $2.55 million plus interest and attorney's fees, it argued. "We are already in discussions to have this dismissed, as it [is] unfortunate that Sterling didn't understand the whole picture before filing, andexpect this matter to be resolved quickly," Mark Geragos, Alex and Ani's lawyer, said in a statement to RapaportNews Wednesday.