By and  on April 11, 2006

NEW YORK — Jessica Simpson appears to have another breakup in the works.

Over what was once touted by its owner as a celebrity fashion label with the potential to hit $1 billion to $2 billion, there's now a legal war between a major licensee and Simpson. Tarrant Apparel Group has sued Simpson and master license owner Vincent Camuto for $100 million over Simpson's alleged failure to promote her lines.

Tarrant filed the lawsuit alleging several breach of contract claims against Camuto and one against Simpson in New York State Supreme Court last week, and said it has already lost $25 million to date and will lose another $75 million through the remainder of its licensing agreement. Tarrant is also seeking a declaration by the court, or declaratory judgment, that it has an exclusive sublicense with Camuto, as well as a separate declaration by the court that Tarrant did not breach any terms of the licensing agreement.

Neither Camuto nor Simpson could be reached for comment.

As reported in WWD, Simpson signed a master licensing deal with Andrew Kirpalani, chairman of JS Brand Management, in October 2004 for $10 million up front. In January 2005, JS Brand Management entered into a sublicense agreement with Tarrant. Kirpalani sold the master license in August 2005 for $15 million to Camuto, president and chief executive officer of VCS Group and co-founder of Nine West Group Inc., but JS Brand Management retained a sublicense deal.

According to the lawsuit, the sublicense obligated JS Brand Management to "provide reasonable assistance to [Tarrant] in marketing the sublicensed products at [Tarrant's] request." Paragraph 6.5 of the sublicense, included in the lawsuit, states, "Ms. Simpson shall be actively involved in promoting the sub-licensed products, whether requested or not by sublicensee, and shall, wherever reasonably practicable and appropriate, publicly wear/display or use the sublicense products, particularly at public events, shows and appearances."

Tarrant paid JS Brand Management $600,000 as an advance advertising and marketing fee for 2004 and 2005, with commitments for guaranteed payments throughout the initial term of an additional $1.7 million. The lawsuit said that upon execution of the sublicense, Tarrant paid $1.6 million as a guaranteed sale royalty for 2004 and 2005, and an additional $4.4 million was guaranteed by Tarrant under the terms of the sublicense for the remainder of the initial term.

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