FASHION BOUTIQUE SUIT AGAINST FENDI BEGINS

Byline: Vicki M. Young

NEW YORK — After nine years of legal proceedings, Fashion Boutique of Short Hills Inc.’s $35 million lawsuit charging that employees of Fendi Stores and Fendi USA made disparaging remarks about the firm finally went to trial in Manhattan on Monday.
U.S. District Court Judge Miriam Cedarbaum said in her opening remarks during jury selection that the trial is expected to last for two weeks. A jury of 10 was impaneled Monday afternoon, with opening statements from attorneys for both sides set for today. In federal civil cases, there are no alternate jurors.
According to the complaint, Fashion Boutique was a franchisee of Fendi from 1983 to 1991, operating a store selling only Fendi products in the Short Hills mall in Short Hills, N.J. The franchise agreement was between Fashion Boutique and Fendi Diffusione Imp/Exp SRL, in Italy. During the early years of the franchise agreement, Fashion Boutique was the only freestanding store selling Fendi products for customers residing in the New Jersey/New York metropolitan area. That changed in October 1989 when the U.S. arm of Fendi decided to open a retail store on Madison Avenue.
The suit charged Fendi with destroying the Fashion Boutique franchise through false and disparaging remarks made to customers in the Madison Avenue store from 1990 to 1991. Fashion Boutique closed up shop in July 1991. The alleged offending remarks referred to the quality of the product sold at the Short Hills store, as well as comments that customers should purchase from the Madison Avenue store.
Fendi registered a partial victory in October 1996 when Judge Cedarbaum dismissed the federal claims of unfair competition. The action was allowed to continue against Fendi on claims arising under New York State law for alleged deceptive acts and practices. Fashion Boutique is seeking $10 million in actual damages and $25 million in punitive damages.
Attorneys from Weil, Gotshal & Manges are representing Fashion Boutique, while Fendi’s legal team hails from the law firm of Pavia & Harcourt.

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