Valentino wants out of its lease on Fifth Avenue in Manhattan, arguing in a newly-filed complaint that COVID-19 has made retail untenable. The latest in a string of big names trying to get out of paying sky-high rent for brick-and-mortar spaces, counsel for the Italian fashion brand claims in a filing in a New York state court that its “business at the premises” – its four-story Fifth Avenue New York Boutique in midtown Manhattan – “has been substantially hindered and rendered impractical, unfeasible and no longer workable.”
In filing suit against its landlord Savitt Partners LLC. Valentino argues that “the current social and economic climate, filled with COVID-19-related restrictions, social distancing measures, a lack of consumer confidence and a prevailing fear of patronizing, in-person, ‘non-essential’ luxury retail boutiques,” has prevented it from operating its store as usual, something that it does not see changing in the near future. As such, the complaint points to a provision in the parties lease, which started in August 2013, that mandates that it use the retail space in a manner that is “consistent with the luxury, prestigious, high-quality reputation of the immediate Fifth Avenue neighborhood.”
This has been made impossible as a result of the global health pandemic, according to the fashion brand, which says that it has been unable“to offer in-boutique retail sales, or associated services such as fittings.”
Valentino claims that it was prompted to file suit after Savitt Partners allegedly revealed that it would not allow Valentino to get out of the lease without penalty even in light of COVID-19. On the heels of notifying Savitt Partners of its desire break the lease earlier this month, and its plan to ideally move out of the space as of the end of this year, Valentino alleges that the landlord “would not accept such a surrender, and notwithstanding the COVID-19 pandemic, disputed that Valentino’s obligations under the lease” – which is slate to run through July 2029 – “have been excused, leaving Valentino with no alternative but to commence this action.”
The store, itself, according to the Wall Street Journal, is located “in a coveted section of Fifth Avenue, which runs 10 blocks from Saks Fifth Avenue at East 49th Street to the corner of Central Park … a prime tourist attraction and has boasted some of the most expensive retail rents in the world.” Citing data from property brokerage Cushman & Wakefield, the Journal notes that “floor retail rents in that section averaged $2,513 a square foot in the third quarter of 2013,” when the lease was initiated.
A representative for Savitt Partners declined to comment on the newly-filed suit.