VERSACE BOUTIQUE SUES VERSACE OVER NEW UNIT

Byline: Jeff Siegel

NEW YORK — The operator of Gianni Versace’s Beverly Hills boutique is suing the designer to prevent him from opening another store less than two blocks away.
Safa Collections Inc., which has run the Versace store on Rodeo Drive since 1982, said in a suit filed in Manhattan federal court that the proposed boutique would violate the franchise agreement it has with Gianni Versace S.r.L. and Gianni Versace SpA not to allow a competing Versace store in Beverly Hills.
“The [proposed] boutique will only sell clothing and accessories identified by the Versace mark,” the same as the current boutique, said Safa in its complaint, which warns that the opening of a second Beverly Hills Versace store poses “an imminent threat of irreparable harm to Safa.”
Safa noted, for example, that the new boutique “already displays several large signs in its windows announcing the opening of a Versace Jeans Couture and Istante by Gianni Versace boutique.”
The new Versace boutique, Safa added, will “undermine the good will and reputation of Safa’s exclusive boutique and cut into Safa’s customer base in ways that cannot readily be calculated in money damages.”
However, Perry Galler, of Phillips, Nizer, Benjamin, Krim & Ballon, counsel to Versace, said Wednesday that the new store will not compete with the Safa store because it will sell completely different merchandise.
“The license to Safa does not include products being licensed to the new licensee and therefore does not impact Safa,” said Galler, who noted that in contrast to the existing store, which sells only Versace brand merchandise, the new store will exclusively sell diffusion lines.
Galler declined to identify the third party who will operate the new store. “No definite date” has been set for its opening, he said.
In addition to seeking a preliminary injunction to stop the Versace store from opening, Safa has filed papers with the American Arbitration Association demanding an arbitration hearing on the matter.
But Safa charged in court documents that Versace has “sought to delay the appointment of an arbitrator, has threatened not to participate in the arbitration, and has refused to provide disclosure to Safa.”
Galler denied the allegations and predicted that the issue will be decided through arbitration rather than the court. — Fairchild News Service

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