Alex and Ani Strikes Back at Sterling

RAPAPORT... Alex and Anihas filed a countersuit against Sterling Jewelers, claiming the retailer breached a supply agreement between the two companies, according to court filings.In August 2015, the companies entered into anagreement whereby Sterling would purchase Alex and Ani merchandise to sell insome of its Jared stores. But Sterling, a division of Signet Jewelers, struggled tosell all the goods, and due to the terms of the agreement, it was unable to sellthe backlog of inventory to third parties or at discounts, Sterling said in its initial lawsuit in December.In April2016, according to Sterling, the companies agreed that Alex and Ani would buyback any remaining goods. However, the Signet brand claimed Alex and Ani had neverpaid it for the returned inventory, leading Sterling to sell the backlog atlower prices to minimize damages.Alex and Ani's lawsuit, which the company filed last week, gives a different version of events. It claims that in August 2016, it learned Sterling was selling its products on Jared.com in breach of the terms of the agreement. These included a stipulation that Sterling could only sell Alex and Ani products at Jared stores, Sterling's higher-end brand, and that goods could only appear for sale on Jared's website if they were also in at least 90% of its brick-and-mortar shops.A few days after Alex and Ani discovered this alleged transgression, the countersuit claims, Sterling terminated the agreement in an attempt to avoid the consequences of the breach. Sterling subsequently sold off the remaining products on sites other than Jared, including that of its lower-end Kay label, tarnishing Alex and Ani's image and devaluing its brand, according to the company. Alex and Ani argues that the termination was in bad faith. It has asked the court to dismiss allclaims against the jeweler, and demanded a block on the further sale ofany Alex and Ani products by Sterling. Additionally, it is seeking payment ofattorney's fees, as well as unspecified damages to be determined at trial.