Chanel’s $15M suit claims Tourneau caved to Cartier
USINFO | 2013-12-23 21:42


That’s one costly time-out.
Chanel Inc. is suing Tourneau for $15 million, saying the luxury watch retailer bent over backwards to demands by its higher-end competitor Cartier to remove a Chanel boutique from Tourneau’s E. 57th Street flagship “TimeMachine” store — right before the holidays.

The timepiece to-do started in 2011 after Tourneau’s then-CEO James Seuss invited Chanel to open a stand on the ground floor of its luxe Midtown East store, according to the Manhattan Supreme Court suit filed Monday.
The location is “one of the most desirable and prestigious sales locations for watches in the United States,” the suit says of the shop, between Madison and Fifth avenues just south of Central Park.
The Chanel stand was set up placed directly adjacent to the dominant Cartier brand.

The custom-crafted boutique, which opened in July, was so “strikingly attractive” that visiting heads of Cartier grew green with envy and demanded its removal in August.
Cartier International CEO Stanislas de Quercize even gave the ultimatum, “Tear down the Chanel Boutique or lose the business of Cartier,” according to court papers.
Tourneau tried to negotiate with Quercize but he wouldn’t budge, the suit says.

Chanel and Cartier timepieces range in price from around $3,000 to over $70,000.
Tourneau caved in to the demands believing that “carrying Cartier brands was essential to maintaining its self-described status as an ‘unrivaled presence in the luxury watch retail market,’” the suit says.
The retailer’s COO Adam Sek told Chanel that the economic climate was ripe for a watch war, according to the documents.

“Today, the market is so weak, Asia is plunging,” Sek told Chanel.
“Faced with commercial setbacks, Cartier determined that it would lose sales to Chanel if the Chanel Boutique were to operate nearby and preferred leveraging its economic strength to foreclose this competition rather than trying to win that competition in the marketplace,” the suit says.

Chanel was forced to removed its boutique from Tourneau earlier this month. It was replaced by two large Christmas trees and a model of a reindeer.
Tourneau is no longer selling Chanel watches at the TimeMachine or at its satellite store on Madison Avenue, a Chanel spokeswoman said.
Chanel claims in the suit that the move damaged its reputation and is devastating sales during the holiday shopping season.

Neither Cartier nor Tourneau immediately returned messages for comment.


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