WWD.com/beauty-industry-news/financial/idc-adds-claims-to-suit-against-saks-571690/
government-trade
government-trade

IDC Adds Claims to Suit Against Saks

International Design Concepts, which filed a lawsuit against Saks Inc. and Saks Fifth Avenue last month, has filed an amended complaint with additional claims.

NEW YORK — International Design Concepts, which filed a lawsuit against Saks Inc. and Saks Fifth Avenue last month, has filed an amended complaint with additional claims.

One of the amended claims, filed Tuesday in a Manhattan federal court, involves the New York Uniform Commercial Code. Donald Kreindler of Phillips Nizer, who is representing IDC, said, “Vendors aren’t aware of their rights under the UCC, which governs all sales of goods in New York.”

Nizer said the UCC establishes that if a retailer like Saks Fifth Avenue claims a deviation or breach from an agreed contract, the store must notify the vendor so it can investigate the claim. Kreindler said failure to notify means the retailer waives any right to charge for the alleged breach. IDC claims Saks failed to provide such notification.

Saks could not be reached for comment, but previously has said it does not comment on pending litigation.

The amended complaint also charged that many of the deductions imposed by Saks Inc. and Saks Fifth Avenue “bore no reasonable relationship to any actual damage that occurred or could reasonably have been anticipated.”

The complaint included a letter dated Feb. 25, 2002, from SFA’s then president and chief executive officer, Christina Johnson, who wrote to the plaintiff that effective April 3, 2002, the retailer would impose a charge of 50 percent of the retail price “for receipts not ordered [overage, substitution] … “

The complaint said the “charge of 50 percent was a penalty that bears no reasonable relationship to any real or anticipated loss that [the] defendants could sustain if a vendor overshipped or shipped more of a given size or style than ordered.” The lawsuit also said, under the terms of payment, SFA was entitled to take an 8 percent discount for early payment of the agreed purchase price.

The lawsuit said that even though SFA’s payments to IDC were never made within the period entitling the store to take the 8 percent discount, that amount was still deducted from the agreed contract price.

IDC filed the first lawsuit in May, alleging breach of contract and fraud in connection with chargeback and vendor allowance practices at the retailer.

In the lawsuit, IDC said it is the assignee of assets of Apparel Group International, the licensee of Oscar de la Renta for the “Oscar by Oscar de la Renta” trademarks, which were used for a women’s sportswear bridge collection sold at SFA. IDC also said AGI is “no longer in operation,” alleging that it was “forced out of business by the actions of the Saks defendants.”

The plaintiff is seeking unspecified damages.