Why Saks Fifth Avenue Is Suing One of Miami’s Most Popular Shopping Malls

The legal battle between Saks Fifth Avenue and Bal Harbour Shops is heating up.

Today in the 11th Judicial Circuit Court of Florida, the high-end department store filed a lawsuit against Bal Harbour Shops and Matthew Whitman Lazenby, president and CEO of Whitman Family Development, which owns the mall, over statements that allegedly breached the parties’ contract and the shopping center’s fiduciary duty.

According to HBC-owned Saks Fifth Avenue, Lazenby disclosed confidential information that the retailer had provided to Bal Harbour in accordance with their lease agreement in an effort to “increase pressure” on Saks to resolve a dispute related to its lease payments amid the coronavirus pandemic. The suit also claimed that Lazenby and Bal Harbour caused damage to Saks’ business and reputation by making public defamatory statements to the media that omitted facts related to the dispute.

In a statement, Ian Putnam, president and CEO of real estate operating company HBC Properties and Investments, said, “We are disappointed that Mr. Lazenby chose to breach our long-standing agreement and disparage Saks Fifth Avenue, an iconic luxury retailer that has been vital to Bal Harbour’s success for 45 years. Over the past few months, we have been working with our landlord partners across North America to amicably and logically share the burden of losses stemming from the ongoing global pandemic. Unlike others, this landlord has resorted to providing denigrating statements and confidential information to the media for the sole purpose of coercing Saks into settling a disagreement.”

He added, “Nonetheless, we have remained eager to reach a fair resolution, just as we have done with other landlord partners. Unfortunately, instead of coming to an agreement, Saks has been forced to grapple with the damage to its business and reputation among customers, associates and partners.”

Two weeks ago, Bal Harbour filed a lawsuit against Saks in an attempt to put an end to the lease at its open-air center — which is one of the world’s most recognizable shopping malls — as well as evict the department store from its property due to “extensive arrearages.”

According to Lazenby at the time, Saks’ alleged arrearages include “long overdue rent that accrued pre-COVID-19,” as well as “percentage rent on sales that occurred after Saks reopened for business” after local government restrictions were lifted. It claimed that it had given the chain “months” to honor its purportedly past due financial obligations, and despite its “impressive post-COVID-19 sales” at the Bal Harbour location, Saks had “steadfastly refused to make any effort” to pay its rent.

The dispute between Saks and Bal Harbour is the latest in a series of lawsuits filed by property owners against their commercial tenants over missed rent payments as the coronavirus outbreak forced the widespread closures of nonessential businesses across the country.

Mall-owner CBL & Associates Properties, which recently announced that it was preparing to file for bankruptcy, has shared that the majority of its occupants, including the bankrupted JCPenney, have requested rent relief. On the other hand, America’s largest mall owner, Simon Property Group has sued Gap after it opted against paying rent for April, May and June. A growing number of retailers — including Nordstrom, H&M and Burlington Stores — have also skipped out on their lease payments as the health crisis continues to throw their balance sheets into disarray.

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