The Italian label is asking the courts to immediately terminate its lease for its four-story Valentino Fifth Avenue New York Boutique, two blocks south of Trump Tower, according to a summons complaint filed to the Supreme Court of the State of New York.
The store is 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. This section is a prime tourist attraction and has boasted some of the most expensive retail rents in the world.
But the rise of e-commerce for luxury products has made it tougher for fashion houses and other retailers to justify high rents when sales have slumped at the Fifth Avenue location for many upscale fashion brands.
The situation has become worse in recent months with the shutdown of nonessential business by New York Gov. Andrew Cuomo to contain the spread of the coronavirus pandemic, which resulted in higher unemployment numbers and curtailed consumer spending. Restrictions have affected Valentino's ability to offer fitting services or to sell its clothes, shoes and accessories in the store, according to the lawsuit.
The suit cited a lease provision requiring Valentino to use the retail space "consistent with the luxury, prestigious, high-quality reputation of the immediate Fifth Avenue neighborhood."
Instead it said the Fifth Avenue location was no longer workable as a luxury destination and that situation was unlikely to change "even in a post-pandemic New York City (should such a day arrive)," according to a complaint filed by Lucas Ferrara of Newman Ferrara LLP.
"In 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, Valentino's business at the premises has been substantially hindered and rendered impractical, unfeasible and no longer workable," Valentino said in the court papers.
The complaint said that on Friday a lawyer for the landlord, Savitt Partners LLC, sent a letter saying the landlord would refuse to accept the surrender of the lease and disputed that Valentino's obligation under the lease had been excused.
Savitt Partners declined to comment on the complaint, according to attorney Robert Cyruli of Cyruli Shanks Hart & Zizmor LLP, who is representing the landlord. "My client won't be litigating through the media," he said.
Valentino started its lease in August 2013, for three floors plus a basement. Ground floor retail rents in that section averaged $2,513 a square foot in the third quarter of 2013, according to data from property brokerage Cushman & Wakefield. Valentino's lease ends in 2029.
The lawsuit is part of a barrage of litigation by landlords and tenants, over leases. In early June, Victoria's Secret filed similar summons seeking to invalidate its lease at its flagship store in Herald Square.
At the start of June, retailers including Valentino, had boarded up their stores with plywood to prevent looters from damaging the stores and their inventory. With fewer instances of unrest, Valentino has since taken down the plywood that has been protecting its facade and has been open for curbside pickup for items such as purses for $1,195 and $495 T-shirts.
But that stretch of Fifth Avenue had only a tiny stream of pedestrians on the sidewalks on a recent weekday afternoon.