In today's WWD, Selective Beauty – a former distributor of Juicy Couture and Usher fragrances in Europe – has smacked Liz Claiborne with a $20.2 million lawsuit that claims Claiborne caused the French firm to go bankrupt when it licensed its fragrance portfolio to Elizabeth Arden.
In court papers filed Nov 24th, Selective Beauty alleges that starting in February 2007, it marketed Juicy Couture and Usher fragrances at its own expense, and that Claiborne promised to honor a five year commitment for the fragrances whether or not the two companies signed a contract. However, in May 2008, Claiborne signed a European licensing agreement for the fragrances with Elizabeth Arden. Selective Beauty asserts it was a complete surprise; they found out about the deal only through reading press reports about it.
And when Selective Beauty abruptly lost Claiborne business as a result in June 2008, the firm claims it was a major contributing factor to their bankruptcy soon after.
"In bad faith and without any notice or just cause, Liz Claiborne gave Selective Beauty's now valuable exclusive distribution rights to Elizabeth Arden, without providing Selective Beauty any compensation for the loss of these rights and the millions of dollars Selective Beauty had already spent promoting Liz Claiborne's products," lawyers for the company wrote.
But the defense isn't resting.
"We believe the allegations are without merit and we plan to conduct a vigorous defense," says Nick Rubino, senior vice president and chief legal officer of Claiborne.
The one thing we're pretty sure about? Things will not be smelling so sweetly in court.
Fashionable law suits are all the rage these days. Just yesterday, LVMH won a zinger over eBay.