People's Lib Sues Charlotte Russe for $60 Million
People’s Liberation Inc.—the Los Angeles–based company that designs and produces the William Rast, J. Lindeberg and People’s Liberation brands—filed suit in Los Angeles County Superior Court against Charlotte Russe Merchandising Inc., its distributor. The suit, which asks for $60 million in compensatory and punitive damages, alleges that Charlotte Russe, the San Diego–based chain of women’s retailers, has breached its contract.
According to the suit, previous to its contract with Charlotte Russe, People’s Liberation had sold its apparel and accessories to better department stores such as Nordstrom, Saks Fifth Avenue and Neiman Marcus. In 2008, People’s Liberation entered its namesake brand, People’s Liberation, into an exclusive, multi-year licensing deal with Charlotte Russe under the condition that the retailer guarantee a minimum of $65 million in product purchases for the first three years of the contract.
The suit alleges that Charlotte Russe terminated the licensing contract within a year of its inception “without justification or legitimate reason” shortly after Charlotte Russe was acquired by Advent CR Holdings Inc., a private equity firm. “Throughout 2009, we have provided over $6 million in approved product shipments and services to Charlotte Russe without any objections and have fully performed under the agreement,” said Colin Dyne, People’s Liberation’s chief executive, said in a statement. “Without any prior warning or opportunity to cure as required under our agreement with Charlotte Russe, we received a termination letter. The contract is not terminated, and Charlotte Russe will pay us every penny it is contractually obligated to pay.”
Charlotte Russe executives did not return calls for comment.—Erin Barajas
