Valentino SpA and its United States-based arm is being sued by one of its landlords over its decision to shut down its store on Fifth Avenue in New York amid the COVID-19 pandemic.
In a lawsuit filed on Friday in New York Supreme Court, 693 Fifth Owner LLC argued that Valentino U.S.A. Inc. had no right to terminate its lease and accused the brand of leaving its flagship in disrepair. It sued Valentino for more than $207 million, claiming that the brand’s decision to abandon the property does not relieve it of paying rent through the lease’s July 2029 expiration. It also said that Valentino should pay to repair damages to the store, including the “defacing” of Venetian Terrazzo marble panels.
Valentino’s vacate notice, wrote the landlord, was “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.”
According to the suit, Valentino informed 693 Fifth Owner LLC back in June of its intent to vacate the store by the end of December — approximately eight and a half years before the end of its lease. Over the summer, the Italian fashion house filed its own lawsuit as its boutique remained shuttered for months due to COVID-19-related restrictions on nonessential businesses. In that lawsuit, it sought to render void its lease at Fifth Avenue because the coronavirus outbreak had made it “impossible” to conduct business in the longtime luxury shopping thoroughfare.
However, last month, a judge dismissed Valentino’s lawsuit. In his ruling, Justice Andrew Borrok suggested that the landlord still had broad protections from the tenant’s nonpayment of rent and “the fact that the COVID 19 pandemic was not specifically enumerated by the parties does not change the result.” Valentino is appealing that decision.
The retail industry has been hit particularly hard by the COVID-19 health crisis. A number of brands and retailers — including Gap and H&M — opted to skip rent payments, while others sought lease concessions from their landlords. In some cases, commercial landlords have resorted to litigation against tenants who defaulted on payments.