Tuesday, 15 September 2009

Tiffany & Co. Sues Westfield As H&M Gets Too Close For Comfort – 15/9/09

"The location of the H&M store will cause irreparable injury to Tiffany's business reputation as a luxury retailer, a reputation that Tiffany has enjoyed and worked hard to maintain for more than a century and a half." This is an extract from a Los Angeles lawsuit between upscale retailer Tiffany & Co. and Australian shopping giant Westfield.

This dramatic retail showdown is happening in Westfield's Century City shopping mall in Los Angeles, which is home to high-end stores including Louis Vuitton, but also has lower-end chains like Gap and J Crew.

Tiffany’s lawyers definitely believe H&M, a Swedish fashion chain, will be too close for comfort and be bad for business. They are arguing that their contract with Westfield protects it from retailers "whose merchandise and/or price points are not considered to be luxury, upscale or better by conventional retail industry standards".

We will be watching this court case closely as we certainly have knowledge on the Australasian market that most luxury brands, when negotiating leases, include a clause on the level of other retailers they will accept next to them (sometimes naming them), in essence it gives brands an 'opt out clause' if the landlord does not deliver the quality of other tenants that are often discussed in the wooing process. If Tiffany & Co. wins, it may set a precedent that sees high-end brands able to safeguard the streetscapes in which their stores appear. Yes, we agree, it is about the mix of brands, however first and foremost it is about the environment. Like attracts like..
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Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au