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Chanel Sues Watch Retailer Tourneau in Contract Dispute

Dec. 16 (Bloomberg) -- Chanel Inc. said in a breach-of-contract suit that Cartier threatened not to supply timepieces to Tourneau LLC’s stores unless the watch retailer shut down a Chanel boutique in its main Manhattan location.

Tourneau, which has sold Chanel watches at two stores in Manhattan since June 2011, opened a boutique for the brand in July inside its “TimeMachine” location on East 57th Street, according to Chanel’s suit against the retailer and Cartier, filed in New York state Supreme Court on Dec. 13.

According to the filing, Cartier officials including Chief Executive Officer Stanislas Chauveau De Quercize toured the TimeMachine in August and ordered Tourneau to “tear down the Chanel boutique or lose the business of Cartier.”

Tourneau notified Chanel in September that it was terminating their agreement to build the boutique, which was dismantled this month, according to the filing.

“The former location of the Chanel boutique currently stands empty of any commercial use by Tourneau, and is occupied only by two large Christmas trees and a small model of a reindeer,” Chanel said in the filing.

$15 Million

Chanel Inc., a unit of Neuilly Sur Seine, France-based Chanel SAS, is seeking more than $15 million in damages.

Tourneau didn’t immediately respond to a voice-mail message seeking comment on the lawsuit. Cartier, which is owned by Geneva-based Cie. Financiere Richemont SA, didn’t immediately respond to an e-mail seeking comment.

Chanel watches are no longer being sold at either of Tourneau’s Manhattan stores, Julie Halpin, a spokeswoman for Chanel, said in a telephone interview.

The case is Chanel Inc. v. Tourneau LLC, 654307/2013, New York State Supreme Court, New York County (Manhattan).

To contact the reporter on this story: Chris Dolmetsch in New York State Supreme Court in Manhattan at

cdolmetsch@bloomberg.net

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net

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