Saks Fifth Avenue Hits Back at Cartier with $55 Million Countersuit

NEW YORK, United States — Saks Fifth Avenue has sued Cartier for $55 million, escalating a fight over whether the department store can move the fine jewellery brand's boutique out of a coveted ground-floor spot as part of a $250-million renovation of its New York flagship.

Last week, the Richemont-owned Cartier sued Saks Fifth Avenue for $40 million for forcing it to give up its current location, alleging that senior-level executives from the department store had assured Cartier it could keep it through ongoing renovations that will turn the ground floor into a dedicated space for handbags and move jewellery brands like Chanel, Chopard and Cartier to a planned basement space called "The Vault."

In a countersuit filed Friday demanding $55 million in damages, the department store denies ever assuring Cartier that it would be able to stay on the ground floor. The main issue in dispute: whether Saks' business model and brand mix had changed enough to allow the department store to move Cartier against its will.

Saks Fifth Avenue states that it is transitioning from a “pure product distribution” model to a “much more experience-centric model,” focused on “dominant category presentations that become destinations.” It also says the mix of brands on offer is changing, but does not go into details.

The first component of the flagship rethink was unveiled in May, when the beauty department was moved from the ground floor to the second floor. The spa-like revamp includes treatment rooms and other novelties. "This transformation was based upon experience showing that the customer prefers not to make purchase decisions in the tens of thousands of dollars in the same place that other customers are shopping for lipsticks," states Saks Fifth Avenue's filing.

The department store goes on to claim that it offered Cartier a “prime location” in the Vault and “other locations on the main floor,” but that “for reasons that remain a mystery, Cartier declined” and “for reasons that are even more difficult to fathom,” it has refused to vacate the store.

In its countersuit, Saks Fifth Avenue speculates that Cartier's reticence may have to do with the fact that it is planning to open a new store in much-hyped West Side development Hudson Yards in 2019.

Cartier did not respond to a request for comment, and Saks Fifth Avenue declined to comment further.

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