The battle between Saks Fifth Avenue and Bal Harbour Shops in north Miami is heating up.
Saks Fifth Avenue on Wednesday filed a lawsuit against Bal Harbour Shops and Matthew Whitman Lazenby, president and chief executive officer of Whitman Family Development LLC, which owns the luxury shopping center.
According to Saks, a division of the Hudson’s Bay Co., the suit was filed Wednesday in the 11th Judicial Circuit Court of Florida “following statements made by Lazenby that breached the parties’ contract and Bal Harbour’s fiduciary duty.”
Saks also indicated that the suit asserts that in an effort to increase pressure on the retailer to resolve a dispute related to lease payments during the COVID-19 pandemic, Lazenby disclosed confidential information provided by Saks Fifth Avenue to Bal Harbour in accordance with its lease agreement.
The suit alleges that Bal Harbour and Lazenby “caused damage to Saks Fifth Avenue’s business and reputation by making public defamatory statements to the media that omitted facts relating to the dispute.”
Saks’ suit against Bal Harbour follows a lawsuit filed in August by Bal Harbour Shops seeking to evict Saks due to what the luxury shopping center said was “extensive arrearages,” including overdue rent. That lawsuit was also filed in the 11th Judicial Circuit Court of Miami Dade County.
Bal Harbour’s complaint alleged that Saks owed about $1.9 million, for some past due rent, a percentage of sales for the first quarter of 2020, as well as certain charges, including common area maintenance and marketing.
Ian Putnam, president and chief executive officer of HBC Properties and Investments, said in a statement Wednesday, “We are disappointed that Mr. Lazenby chose to breach our longstanding agreement and disparage Saks Fifth Avenue, an iconic luxury retailer that has been vital to Bal Harbour’s success for 45 years.
“Over the past few months, we have been working with our landlord partners across North America to amicably and logically share the burden of losses stemming from the ongoing global pandemic. Unlike others, this landlord has resorted to providing denigrating statements and confidential information to the media for the sole purpose of coercing Saks into settling a disagreement. Nonetheless, we have remained eager to reach a fair resolution, just as we have done with other landlord partners. Unfortunately, instead of coming to an agreement, Saks has been forced to grapple with the damage to its business and reputation among customers, associates and partners.”
Across the country, retailers and landlords are in discussions on rents and other items because of the temporary store closures caused by the pandemic. In most cases, compromises and adjustments in rents and leases are being negotiated, though it’s expected that more lawsuits will emerge in the months ahead.
In the case of Saks versus Bal Harbour Shops, it’s possible that differences get settled through arbitration. If that doesn’t happen, it would get adjudicated in court.
Industry sources believe Saks won’t leave Bal Harbour Shops, because both parties want the store to remain in place. Bal Harbour Shops is among the most productive shopping centers in the country and the Saks unit there is said to be among the luxury retailer’s top five performing units.
“They’re arguing over hundreds of thousands of dollars,” one industry source said. “Defamation damages could be as high as $50 million.”
The source also believes Bal Harbour Shops filed a lawsuit against Saks to put pressure on some other tenants in the center that might have held back payments due to the pandemic.