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Balenciaga Verdict Set for August

A court in Paris will hand down its decision on Aug. 27 in the lawsuit brought by the brand against its former designer, Nicolas Ghesquière.

PARIS — A court here will hand down its decision on Aug. 27 in the lawsuit brought by Balenciaga against its former designer, Nicolas Ghesquière, for remarks the fashion house claims were harmful to the company, parent Kering and shareholders.

This story first appeared in the July 2, 2014 issue of WWD.  Subscribe Today.

The Tribunal de Grande Instance of Paris on Tuesday heard oral arguments in the civil case against Ghesquière and stylist Marie-Amélie Sauvé. Neither attended the hearing. At the end of the day, presiding judge Christian Hours suggested the parties try to reach a settlement. Failing that, he would deliver the court’s verdict in August.

Balenciaga is seeking damages of 7 million euros, or $9.4 million at current exchange, over an interview Ghesquière and Sauvé granted to London-based fashion magazine System last year about the Frenchman’s post-Balenciaga career.

It also wants the ruling to be published in a variety of French fashion and business publications.

The hearing partially shed light on the end of Ghesquière’s 17-year tenure at Balenciaga, during which he propelled the dusty couture house to the front of fashion’s avant-garde. Owned by France’s Kering, the fashion house’s collections are now designed by Alexander Wang.

Thierry Lévy, counsel for Balenciaga, hailed Ghesquière as “one of the most imaginative, most brilliant designers not only of his generation, but of this time.”

He noted that in spring 2012, the house signed a five-year contract worth 20 million euros, or $27.3 million at current exchange, with the designer, who has since been made artistic director of Louis Vuitton.

Sometime during the summer of that year, relations soured between Ghesquière and Balenciaga chief executive officer Isabelle Guichot. “The cause of the disagreement has not been elaborated on,” the lawyer dryly summed up.

A separation agreement was signed on Oct. 17 and stipulated that Ghesquière refrain from declarations that could hurt the image of Balenciaga; Kering, then known as PPR, and its shareholders and collaborators. Both parties also pledged to speak of each other with “reserve, discretion and tact.”

Lévy contended that Ghesquière broke this agreement with the interview, which ran in the inaugural issue of System in April 2013. The suit mentions multiple quotes by the designer from the cover story, which ran more than 30 pages.

One of them reads: “It was all about branding. I don’t have anything against that; actually, the thing that I’m most proud of is that it’s become a big financial entity and will continue to exist. But I began to feel as though I was sucked dry, like they wanted to steal my identity while trying to homogenize things.”

Lévy likened the statements to “a thunderbolt out of the blue,” claiming they were severely detrimental to the image of the house.

Michel Laval, counsel for Ghesquière, countered that his client had been blindsided by Balenciaga’s decision to publish the joint statement revealing his departure on Nov. 5 without warning, following a disagreement with the designer over his plans to have lunch with Japanese members of the media.

Under the terms of the separation agreement, the announcement had been due some time that month by common accord. The surprise announcement generated market rumors detrimental to his client’s reputation, Laval argued.

The lawyer denounced what he called Balenciaga’s “war logic,” adding that subsequent comments by Kering chairman and ceo François-Henri Pinault and Guichot praising Wang, Ghesquière’s successor, amounted to between-the-lines criticism of his client. “They had a field day,” he argued, saying the duo cast Ghesquière as a has-been and inferred that he had been pushed out.

Laval further argued that the comments Ghesquière made to System did not amount to criticism of Balenciaga but described the industry as a whole. “He gives the point of view of the designer,” he said. “He is expressing a general opinion, personal impressions, and paying homage to the house.”

As reported, court documents say Ghesquière was paid 6.6 million euros, or $9 million, as compensation for breaking his latest employment contracts, signed in 2010 and 2012. The designer, who was given an equity stake when then-parent Gucci Group bought Balenciaga in 2001, received 32 million euros, or $43.7 million, for the purchase of his 10 percent stake in the company.

Lévy, representing Balenciaga, said the proposed damages of 7 million euros were “reasonable” when compared to the 25 million euros, or $34 million, that Balenciaga spent on “promoting its image” in 2011 and 2012.

Laval, on the other hand, said Balenciaga provided no proof of prejudice and the amount reflected a vindictive intent. “Balenciaga is bent on punishing him,” he said.

The hearing also heard about another legal dispute between the two parties. Ghesquière took Balenciaga to commercial court over its refusal to hand over images of an estimated 40,000 designs he produced for the house, which he wants to use in a book on his career. Under the terms of the separation agreement, the designer has access to the house’s archives, but Balenciaga contested his right to use the images for commercial purposes.