Saks Fires Back, Claims Right to Eject Cartier

On Oct. 5, Saks Fifth Avenue filed an answer and counterclaim to the lawsuit Cartier commenced just days before, arguing it has a contractual right to evict the Cartier boutique from its New York City flagship.

The facts presented by Saks in its counterclaim largely line up with those offered by Cartier: In 2016, Cartier and Saks signed a five-year agreement to station a Cartier boutique (pictured) on the ground floor of the Saks flagship near its 49th Street entrance. When that floor became subject to a storewide remodeling, Saks offered Cartier another spot, which Cartier declined. On Aug. 14, Saks delivered a letter terminating Cartier’s lease, but Cartier doesn’t want to go and has asked the court to nullify that termination.

Saks’ filing asserts that is has every right to give Cartier the heave-ho. The agreement can be terminated, it says,  if “the New York store’s matrix, business model and/or Saks Fifth Avenue brand perception were to materially change.”

Saks claims that, by embarking on a $250 million remodel of its flagship, it has “changed the matrix, or mix of brands, throughout the store, and also changed its business model via fundamental changes in the customer experience to every floor in the New York store.

“Unlike most department stores in the country, customers of the New York store no longer enter to find perfumes, cosmetics, and some jewelry on the ground floor,” asserts Saks’ counterclaim. “The New York store now has a groundbreaking architectural plan to draw the customer into a world of luxury and service.”

The store’s remodel will move jewelry to the second floor and to a new downstairs location called the Vault.

“This transformation was based upon experience showing that the customer prefers not to make purchase decisions in the tens of thousands of dollars in the same place that other customers are shopping for lipsticks,” the complaint said. “Saks therefore envisioned all of its highest-end jewelers moving to the Vault.”

Among the jewelers setting up shop down there: Graff and Chopard.

Cartier was offered a “prime location” in the Vault as well another spot on the main floor, but it has “inexplicably” declined them all, Saks’ legal papers say. (Cartier has maintained that the alternate locales “did not align with the Maison’s positioning and image standards.”)

As for as Cartier’s current space, Saks has earmarked it for a luxury handbag manufacturer “whose presence is consistent with the new [Saks] model and matrix,” says the complaint. But Saks gripes that Cartier is refusing to pack its high-end bags, even though it has informed its employees that the boutique will cease operations. This refusal to leave threatens Saks’ planned unveiling of its ground floor during February 2019 New York Fashion Week, the complaint says.

The counterclaim asserts breach of contract and tortious interference with business relations and Saks is seeking damages of more than $55 million (Cartier believes it’s owed $40 million).

At press time, Cartier has not filed a response to the counterclaim.

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JCK News Director