Valentino Fashion House Hit With $207 Million Lawsuit After Closing Flagship Manhattan Location
The high-end luxury Italian fashion house Valentino is the subject of a $207 million lawsuit brought on by the landlord of the retailer's flagship store in Manhattan. The landlord, named as 693 Fifth Owner LLC in the complaint, is suing the fashion house for unpaid rent and damages after the retailer vacated the building late last year.
The landlord of the building in the iconic shopping strip is alleging that the retailer abandoned its rental agreement which was not set to be up until July 2029. The lawsuit claims that Valentino U.S.A. Inc breached its contract by failing to pay rent from September 2020 to February of this year. In addition to “abandoning” the building, the landlord alleges that Valentino “turned over the premises … with its valuable components having been destroyed."
In the lawsuit, the landlord indicates that the physical damages are roughly $12.8 million. The most notable damages were done to the Venetian Terrazzo marble that was left defaced with paint marks and holes.
Valentino U.S.A. Inc has responded to the allegations made by the landlord. The retailer cites the pandemic as the reason for its premature termination of the lease. Valentino issued a statement explaining that because of the coronavirus, the retailer could no longer operate the store “consistent with the luxury, prestigious, high-quality reputation” of the area.
The lawsuit against the retailer pushes back by stating, “Tenant’s Vacate Notice and Tenant’s Suit were an opportunistic attempt to capitalize upon and pervert the international COVID-19 pandemic in order to mitigate market difficulties the House of Valentino had been suffering since well before the COVID-19 pandemic.”
The lawsuit seeking damages against the retailer comes just weeks after Valentino filed a lawsuit of its own against the flagship store landlord. In this complaint, Valentino aimed to get out of the lease because of the implications the coronavirus had on the city. The complaint argues that even after the city will have recovered from the virus, “the social and economic landscapes have been radically altered in a way that has drastically if not irreparably, hindered Valentino’s ability to conduct high-end retail business.”
The court, however, disagreed and dismissed the complaint against the landlord. In the ruling, the judge explained, “The fact that the COVID 19 pandemic was not specifically enumerated by the parties does not change the result.” The complaint goes on to read, “Valentino’s conclusory and general allegation that the landlord failed to maintain the premises, even taken as true as the court must at this stage of the proceeding, lacks causation. Finally, to the extent that Valentino indicated that after filing this action, it subsequently made the decision to move out and vacate the premises also does not change the result. No wrongful act of the landlord is alleged to have caused the necessity of this decision.”
Throughout the course of the pandemic, Valentino has been one of several retailers looking to get out of their commercial leases by suing their landlords. Conversely, several landlords have sued their commercial tenants for failure to pay rent as well. The Simon Property Group sued the Gap for $66 million, JEMB Realty filed a suit against H&M for $4M, while retailer L'Occitane was sued for $746,000 by its landlord, The Vanbarton Group. The retail industry, much like the restaurant industry, has been hit especially hard during the coronavirus pandemic.