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MajorsOct 11, 2018
Saks Files $55M Countersuit in Cartier Case
The department store hit back at the luxury jewelry brand in the conflict stemming from the former’s New York City flagship renovation.
Pictured here is the recently redone jewelry department at Saks Fifth Avenue’s New York City flagship store. The store’s renovation is at the heart of a conflict between the department store chain and Cartier.
New York—The legal conflict between Cartier and Saks Fifth Avenue just got more interesting.
Saks Fifth Avenue responded to Cartier’s $44 million lawsuit filed in New York State Supreme Court last week with a multimillion-dollar suit of its own.
On Oct. 5, the department store chain filed a countersuit in New York State Supreme Court, asking for $55 million and for Cartier to vacate its Fifth Avenue New York City flagship.
The conflict stems from Saks’ renovation of that store.
Saks proposed a new location for the Cartier shop-in-shop amid the overhaul, which the jewelry brand objected to, asserting in a statement that it did “not align with the Maison’s positioning and image standards.”
According to Cartier, Saks terminated its five-year lease agreement with the Richemont-owned jewelry brand amid the renovation row, which is when the latter took the matter to court.
In Saks’ countersuit, however, the retailer alleges that it didn’t have a lease with Cartier but, rather, a five-year concession agreement, though it did admit that the agreement between the companies stated that changes in the location of Cartier wouldn’t be made without written consent from both parties.
Saks noted, however, that the agreement contains a provision that allows either party to terminate the agreement if Saks’ “matrix, business model and/or Saks Fifth Avenue brand perception were to materially change.”
The Hudson’s Bay Co.-owned department store chain said that its $250 million+ flagship overhaul constitutes just such a shift, as it is “changing from a product distribution model to a model focused on creating a customer experience at the store focused on dominant category presentations that become destinations.”
It also noted in the countersuit that it is changing the matrix, or mix, of brands.
Unlike the traditional department store model that Saks has employed since its founding in 1924, the renovation saw its beauty department move from the ground floor to the second floor, in a move that allows it to include spa and treatment rooms, and beauty services.
It also launched a revamped jewelry department on the second floor, fittingly called “Jewelry on 2,” that is home to designers like Amali, David Webb, David Yurman, Gurhan, Ippolita, John Hardy, Marco Bicego, Mikimoto, Roberto Coin, Temple St. Clair and Zoë Chicco.
Saks now aims to move leather goods to the ground floor and high-end jewelers like Cartier to the basement level, in a “chic, extravagant space,”
dubbed “The Vault,” which will be “the perfect environment for clients pursuing large transactions,” it said.
The retailer noted that Chopard, Graff and Chanel will be among the jewelers taking up residence in The Vault.
“Saks therefore envisioned all of its highest-end jewelers moving to The Vault to provide a more private, secure location for making very expensive purchases,” the countersuit states. “This transformation was based upon experience showing that the customer prefers not to make purchase decisions in the tens of thousands of dollars in the same place that other customers are shopping for lipsticks.”
Saks alleges that Cartier refused a prime location in The Vault or even other spots on the store’s ground level.
The retailer said it plans to unveil its new ground floor in time for the next New York Fashion Week, occurring in February 2019, stating that “any delay in turnover of the Cartier concession for demolition and construction would make it impossible for Saks to meet the immovable deadline created by the Fashion Week schedule.”
The retailer noted that Chopard, Graff and Chanel will be among the jewelers taking up residence in The Vault.
“Saks therefore envisioned all of its highest-end jewelers moving to The Vault to provide a more private, secure location for making very expensive purchases,” the countersuit states. “This transformation was based upon experience showing that the customer prefers not to make purchase decisions in the tens of thousands of dollars in the same place that other customers are shopping for lipsticks.”
Saks alleges that Cartier refused a prime location in The Vault or even other spots on the store’s ground level.
The retailer said it plans to unveil its new ground floor in time for the next New York Fashion Week, occurring in February 2019, stating that “any delay in turnover of the Cartier concession for demolition and construction would make it impossible for Saks to meet the immovable deadline created by the Fashion Week schedule.”
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