Kitson Slapped with $1 Million Lawsuit Over Owner's Bad Behavior

Los Angeles-based retailer Kitson, a favorite of celebrities and the kids from the Bling Ring, is currently embroiled in a legal dispute with the outside company charged with operating its LAX airport location. New Jersey-based Hudson Group, the company that operates over 40 stores at LAX, including Kitson, filed a lawsuit in late February against the celebrity-favorite store for breach of contract, claiming Kitson’s founder, Fraser Ross, made numerous unauthorized visits to a Kitson-branded store in the airport, berated employees, threatened to fire them, made customers feel uncomfortable, and inspected the store without an authorized escort.  

According to Hudson's complaint, such unscheduled visits by Kitson employees violated what was known as the “Fraser clause,” a section in the parties' contract that enables Hudson to approve Kitson representative visits, and requires that representatives be accompanied by a Hudson employee.

In a cross-complaint filed this week by Kitson, the retailer accuses Hudson of failing to maintain and operate Kitson stores as agreed upon in their contracts. An array of Kitson's allegations stem from its right to sell one liter bottles of Glaceau Smartwater for $2.55 per bottle instead of the $4.99 that Hudson Group stores sell them for. That's right. They're litigating over water. Kitson claims Hudson refused shipment of Smartwater to the Kitson stores at LAX, which are operated by Hudson Group, “so that it could continue its practice of selling the same one liter bottles of Smartwater to captive consumers at LAX,” in its lawsuit. Kitson further claims the failure for the two retailers to agree on the price to sell the water bottles was what eventually led Hudson to sue Kitson and threaten to sever their business relationship.

Brian Timmons, a lawyer for Hudson, has spoken out about Kitson's allegations, saying the overpriced water bottle claims are nothing more than a cheap publicity stunt on retailer's part. He said of Kitson's claims: “Kitson sells t-shirts that normally retail for $10 to $15 for $300 because they have some fancy slogan on it. Anybody who shops at Kitson knows it’s not a place to save money. It’s a high-end boutique store.” Hudson is asking Kitson to pay a $280,000 penalty for violating the "Fraser clause" and $750,000 for legal costs and damages in connection with the lawsuit.