Selective Beauty, a onetime distributor of Juicy Couture and Usher fragrances in Europe, has sued Liz Claiborne Inc. for $20.2 million, alleging that Claiborne’s licensing of its fragrance brand portfolio to Elizabeth Arden contributed to the beauty distributor’s bankruptcy.
In a lawsuit filed in U.S. District Court in Manhattan on Nov. 24, the French firm said that, starting with a partnership for Juicy Couture in February 2007, it helped build both brands in its markets at its own expense. The company alleges the sudden loss of the Claiborne business in June 2008 contributed to its financial woes earlier this year.
Nick Rubino, senior vice president and chief legal officer of Claiborne, said, “We believe the allegations are without merit and we plan to conduct a vigorous defense.” A spokesman for Arden declined comment.
Selective Beauty alleges that throughout 2007 and early 2008, it expanded its partnership with Liz Claiborne so it eventually handled distribution of the Juicy Couture fragrance in markets including Germany, France and Italy, as well as the launch of the Usher scent in the U.K. and Ireland. In court documents, the company asserted that the parties’ agreement for each fragrance was to last for five years and Claiborne said it would honor its commitments whether or not the firms had signed a contract.
Selective Beauty said with an understanding that Claiborne would continue their arrangement, it used its own resources to promote both fragrances. In May 2008, however, the distributor said it discovered through press reports that Claiborne had signed a European licensing agreement for the fragrances with Elizabeth Arden.
“Thus, 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.
Selective Beauty entered administration in commercial court in Bobigny, France, in March and emerged in July. In its suit, the company alleged the fallout from the Claiborne partnership exacerbated its financial woes leading up to the bankruptcy. The company is seeking $20.2 million in compensatory damages and costs.