Prada USA Corp. (the US-based branch of Miuccia Prada's Italian design house) filed suit against fellow design house MaxMara in a New York state court on Friday. Based on its complaint, Prada alleges that following "extended negotiations" and execution of an agreement, MaxMara reneged on its binding contract to assign its lease for a store located in Honolulu to Prada. The damages at issue are no joking matter. Prada wants "millions of dollars in damages incurred as a result of MaxMara's unjustified breach, including lost profits projected for [Prada's] planned boutique and significant sums spent in reliance on MaxMara's broken commitment." Prada was planning to open a Miu Miu boutique in Waikiki space.
Prada's three claims include: Breach of contract, Breach of the Covenant of Good Faith and Fair Dealing (an implied duty for both parties to act in good faith and fairly during the existence of their contractual relationship), and Promissory estoppel (which basically means that Prada reasonably relied upon MaxMara’s promise to assign the lease and as such, MaxMara should not be able to break the contract).
In its complaint, Prada emphasizes its reliance on choosing the "right location for its retail stores" in order to "target buyers of luxury goods." As such, Prada chose the specific space on Kalakaua Avenue, which is known as “Luxury Row,” due to the presence of many high-end retailers with stores there, including Dior, Louis Vuitton, Gucci, and Prada itself. According to the complaint, the two parties and their real estate brokers communicated for a year about a possible assignment of the lease from MaxMara to Prada. Thereafter, in February 2011, the parties signed the Assignment Agreement. Prada put down a "significant amount of money" as a deposit and in exchange, was given the right to take possession of the Property on July 1, 2011. In late June of 2011, following amendments to the Assignment Agreement, MaxMara decided to renege on its commitment and refused to give up the lease. Prada alleges that MaxMara provided varying reasons for the breach, but its very he said, she said. More to come ...
In its complaint, Prada emphasizes its reliance on choosing the "right location for its retail stores" in order to "target buyers of luxury goods." As such, Prada chose the specific space on Kalakaua Avenue, which is known as “Luxury Row,” due to the presence of many high-end retailers with stores there, including Dior, Louis Vuitton, Gucci, and Prada itself. According to the complaint, the two parties and their real estate brokers communicated for a year about a possible assignment of the lease from MaxMara to Prada. Thereafter, in February 2011, the parties signed the Assignment Agreement. Prada put down a "significant amount of money" as a deposit and in exchange, was given the right to take possession of the Property on July 1, 2011. In late June of 2011, following amendments to the Assignment Agreement, MaxMara decided to renege on its commitment and refused to give up the lease. Prada alleges that MaxMara provided varying reasons for the breach, but its very he said, she said. More to come ...
