By: Rusty Brooks
The Italian luxury brand “Valentino’ filed a lawsuit on Sunday in the Supreme Court of the State of New York seeking to terminate the lease on its four-story Fifth Avenue store, alleging that it was “impossible” to do business at this location in the wake of the coronavirus outbreak, NBC reported.
The U.S. branch of Valentino initiated the legal proceedings in New York State Supreme Court to force 693 Fifth Owner LLC to release them from their 15-year Manhattan lease, nine years early. It cited losses due to the lockdown from the coronavirus outbreak. The landlord’s location is listed in the suit as in care of Savitt Partners LLC according to Crain’s.
Valentino signed a 15-year lease on the space in 2013.
“In the current social and economic climate, filled with COVID-19-related restrictions, social-distancing measures, a lack of consumer confidence, and a prevailing fear of patronizing, in person, “non-essential” luxury retail boutiques, Valentino’s business at the Premises has been substantially hindered, rendered impractical, unfeasible and no longer workable,” the legal proceedings stated
“Even in a post-pandemic New York City (should such a day arrive), 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 at the premises.
“The very purpose of the Lease, Plaintiff’s ability to use of the Premises to operate a high-end fashion retail boutique along a prestigious section of Fifth Avenue, has been completely frustrated,” it concluded.
According to a report in the Daily Mail of the United Kingdom, the court filing claims that a lawyer representing the landlord sent a letter on Friday disagreeing that Valentino has a right to surrender the lease.
Robert Cyruli of Cyruli Shanks Hart & Zizmor LLP, is representing the landlord and declined to comment to the WSJ: ‘My client won’t be litigating through the media.’
Cyruli Shanks is a boutique law firm located in the midtown Manhattan, with a satellite office in New Jersey. Their areas in which they specialize are real estate, commercial litigation, corporate law and automative law.
Many retailers across the US are facing similar problems. Many are re-negotiating rents with landlords or simply not paying rents period. COVID-19 has paralyzed NYC retail since March. Victoria’s Secret, another gigantic retail store is also in litigation with their landlord over the rent for their Herald Square location.
Even with the measured re-opening of the city business do not see any chance in the foreseeable future for retail to pick up in NYC.
Valentino’s legal team pointed out that the lease says, “All such uses by Tenant to be consistent with the luxury, prestigious, high-quality reputation of the immediate Fifth Avenue neighborhood (i.e. Fifth Avenue between 59th Street and 50th Street) in general, and for no other use or purposes,” the lease said. Since retail is buried in NYC and they cannot use the building for any other purpose.
These are incredibly unique lawsuits such as the ones by Victoria Secret and now Valentino are difficult to win, according to legal experts. There is essentially no other cases to compare these cases against, as the pandemic is a first in modern times. There is no clause in the leases indicating that a natural disaster or pandemic which could affect their business, would allow them to get out of the lease.
According to the Daily Mail report, Jay-Z’s Roc Nation sued its NYC landlord for stalling on a sub-leasing agreement after they stopped paying rent.
Roc Nation says it invoked a clause in the lease, freeing it from its contractual obligations in case circumstances beyond their control arise – such as the coronavirus pandemic – and make the contract impractical or impossible to uphold, as was reported by the British publication.
Last week Valentino and Amazon filed a joint lawsuit against New York-based Kaitlyn Pan Group for allegedly counterfeiting Valentino shoes and offering them for sale online.
The move is Amazon’s first joint litigation with a luxury fashion brand and Valentino’s first with an online retailer.
