By Jonathan Stempel
NEW YORK (Reuters) – Valentino SpA said on Monday it has settled litigation with the landlord of its former American flagship on Manhattan’s Fifth Avenue, which the Italian fashion company abandoned because of the COVID-19 pandemic.
In a statement, Valentino said its amicable settlement with the landlord 693 Fifth Owner LLC calls for the 16-year lease, for space located two blocks south of Trump Tower, to be terminated.
Additional terms were not disclosed. Lawyers for the landlord did not immediately respond to requests for comment.
Valentino had sought in June 2020 to end the lease nine years early, saying the pandemic made it impossible to run the store “consistent with the luxury, prestigious, high-quality reputation” of its neighborhood.
After a New York state trial judge dismissed that lawsuit, the landlord sued Valentino for $207.1 million, mainly to recover unpaid rent and to repair store damage.
Last month, a New York state appeals court agreed that the pandemic did not excuse Valentino from its lease obligations, “even if its ability to provide a luxury experience was rendered more difficult, because the leased premises were not destroyed.”
The pandemic depressed sales for Manhattan retailers, as many office workers and tourists stayed home.
Average asking rents in the fourth quarter of 2021 fell 13.5% from a year earlier, though leasing activity rose 24.1% from the prior quarter, according to the commercial real estate company Jones Lang LaSalle Inc.
(Reporting by Jonathan Stempel in New York; Additional reporting by Rhea Binoy in Bengaluru)
