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Valentino sued for $207M after shutting Manhattan boutique


(Reuters) — Valentino SpA was sued on Friday for $207.1 million by the landlord of its former American flagship on Manhattan’s Fifth Avenue, which said the Italian fashion company had no right to break its lease and leave the store in disrepair.

The complaint followed a judge’s Jan. 27 dismissal of Valentino’s own lawsuit seeking to void its 16-year lease because the coronavirus pandemic had made operating the store, two blocks south of Trump Tower, impossible.

According to the landlord, 693 Fifth Owner LLC, Valentino owes all rent due through the lease’s July 2029 expiration despite abandoning the store in December.

Valentino must also pay $12.9 million to repair store damage, including to Venetian Terrazzo marble panels now defaced with paint and holes, the landlord said.

Neither Valentino nor its lawyers immediately responded to requests for comment. The lawsuit was filed in Manhattan Supreme Court, a New York state court.

In seeking to end its lease, Valentino said the pandemic left it unable to operate the store “consistent with the luxury, prestigious, high-quality reputation” of its neighborhood.

But in dismissing Valentino’s lawsuit, Justice Andrew Borrok of the Manhattan court said the lease gave the landlord broad protections from nonpayment of rent.

“The fact that the COVID-19 pandemic was not specifically enumerated by the parties does not change the result,” he wrote.

Valentino is appealing Justice Borrok’s decision.

Manhattan retailers have struggled during the pandemic with reduced traffic from tourists and office workers, and early forced store closures.

Last month, the Real Estate Board of New York said rents sought for Manhattan retail space fell throughout the borough, including an 8% drop in the stretch including Valentino's store.

“The building owner tried to work with Valentino during the pandemic with the understanding that these are difficult times,” the landlord’s lawyer Robert Cyruli said. “We look forward to presenting our case for damages in court.”

More insurance and risk management news on the coronavirus crisis here.







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