The company ended its 16-year lease in June 2020, nine years before the end of the lease term, arguing that the challenges posed by the pandemic made it impossible to operate the store “consistent with the luxury, prestigious, high-quality reputation” in the area.
The dispute between the two companies began when Valentino sued its landlord, 693 Fifth Owner LLC, in an effort to void its lease. The case was, however, dismissed by a U.S. state trial judge.
“The fact that the COVID-19 pandemic was not specifically enumerated by the parties does not change the result,” Justice Andrew Borrok of the Manhattan court said.
This prompted the landlord to sue Valentino for $207.1 million as a way to recover unpaid rent and repair damages to its store.
In March, a New York state appeals court agreed that Valentino could not be excused from its lease obligations “even if its ability to provide a luxury experience was rendered more difficult because the leased premises were not destroyed.”
Similar disputes between various luxury brands and their landlords have come to light over the past year. In Q4 2021, average asking rents fell by 13.5% from the year before, even though leasing activity increased by 24.1% compared to the previous quarter, Reuters reported.