Saks Strikes Back at Cartier with $55M Lawsuit

RAPAPORT... Saks Fifth Avenue has filed a countersuit against Cartierfor $55 million, alleging its eviction of the jeweler was justified under theterms of their contract. Cartier sued Saks last week, claiming theretail giant unlawfully evicted it from its space at the Saks flagship store atthe corner of Fifth Avenue and 49th Street. Cartier sought an injunction toprevent its ouster, as well as $40 million in damages. Cartier argued that Saks's renovation of the site this yearhad created significant challenges for the jeweler's boutique, and the departmentstore had assured it the remodeling would not have any effect on the lease.However, in a countersuit Saks filed Friday at the New York Supreme Court, it deniedwrongdoing, stating that it had never guaranteed Cartier the redesign would notaffect it in any way. In addition, the deal between the two companies was not a"lease" as described in Cartier's original suit, Saks argued. It was actually a"concession agreement" that allowed Cartier to operate a boutique on Saks'spremises, according to the department store. The arrangement included aprovision that permitted Saks to terminate the contract following a "materialchange" in its business model or "matrix," it added. Saks's $250 millionrefurbishment of the site, which it began in May, had the purpose of transformingit from a traditional department store to an experience-driven store. Thatchange in its model was substantial enough to warrant ending the Cartier agreement,Saks insisted. Saks also offered Cartier space in its new, exclusivejewelry section, "The Vault," which would also house other luxury brands includingChopard and Graff Diamonds, and would provide consumers "a more private, securelocation for making very expensive purchases," the suit continued. "Saks recently embarked upon a complete reimagining andrenovation of the New York store and offered Cartier a prime location toparticipate," the suit states. "For reasons that remain a mystery, Cartierdeclined." Furthermore, Cartier's refusal to vacate the site will disturbSaks's plans to unveil its new ground-floor concept ahead of New York FashionWeek in February, it noted. Saks claimed Cartier's actions would cost it more than $55million in lost business. The department store is seeking that amount, as wellas a declaration from the court that its termination notice was valid,requiring Cartier to vacate its Fifth Avenue store. Image: Saks Fifth Avenue, Manhattan. (Northfoto/Shutterstock)