(Reuters) – Valentino SpA said on Monday that they have settled a lawsuit with the landlord of its former US flagship on Manhattan’s Fifth Avenue, which the Italian fashion company abandoned due to the covid-19 pandemic.
In a statement, Valentino said that its friendly settlement with landlord 693 Fifth Owner LLC calls for the termination of the 16-year lease, for space located two blocks south of Trump Tower.
No additional terms were disclosed. The landlord’s lawyers did not immediately respond to requests for comment.
In June 2020, Valentino had tried to terminate the lease nine years earlier, saying the pandemic made it impossible to run the store “in line with the luxurious, prestigious, high-quality reputation”; in its neighborhood.
After a New York state court judge rejected that lawsuit, landlord Valentino sued for $ 207.1 million, primarily to recover unpaid rent and to repair in-store damage.
Last month, an appeals court in the state of New York agreed that the pandemic did not excuse Valentino from its rental obligations, “even though its ability to provide a luxury experience was hampered because the rented premises were not destroyed.”
The pandemic dampened sales for retailers in Manhattan, as many office workers and tourists stayed at home.
Average rents in the fourth quarter of 2021 fell by 13.5% from a year earlier, although rental activity increased by 24.1% from the previous quarter, according to commercial real estate company Jones Lang LaSalle Inc.