Saks Fifth Avenue flagship store in New York.

Saks Fifth Avenue filed its countersuit against Cartier late Friday alleging it will sustain damages in excess of $55 million from the upscale jewelry brand’s refusal to vacate its space on the main floor of its flagship.

The retailer also said the suit is causing unlawful interference with Saks’ other business relationships.

As reported, on Wednesday, Cartier, a subsidiary of Compagnie Financière Richemont SA, filed suit in local New York court against Saks, part of Hudson’s Bay Co., claiming that the retailer’s $250 million remodel and a related attempt to end years early a five-year lease for a retail space within its Manhattan flagship is damaging its business. Cartier is seeking at least $40 million in damages.

Saks’ countersuit also alleges that a termination provision in the agreement between the two companies was included so that no brand could have veto power over fundamental store changes.

Saks said in order to remain competitive, it is essential that its business model evolve. As part of the renovation plan, the retailer is building a new space on the lower level called The Vault to house an expanded fine jewelry and watch assortment. It believes that customers spending large sums of money on upscale pieces will feel more comfortable in this environment than on the crowded main floor.

The space occupied by Cartier is earmarked for a luxury handbag vendor and as a result of Cartier’s refusal to move, the store will incur additional costs as a result of construction delays and loss in revenue from other concessions that were expected to open on the main floor by the recently completed New York Fashion Week, Saks said in its countersuit.

In its earlier complaint, Cartier said, “Saks’ actions were undertaken in bad faith for the purpose of harassing Cartier and interfering with its ability to operate in the Cartier department in the Cartier location and constitute a breach of the covenant of good faith and fair dealing.”

The jeweler said in October 2016 it renewed a five-year lease for its “specifically selected” location within the Saks flagship, and noted the space was chosen and substantially invested in “due to its nearly unmatched visibility (to maximize brand exposure) and customer foot traffic, security and logistical considerations, as well as the overall shopping experience of Cartier’s customers.”

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