Denim Lawsuit: Charlotte Russe & People's Liberation

by Jaime on November 4, 2009

You know how there are just some things you never expect to see on a denim blog?


This is one of them.


Thanks to Denimology for the heads up.

We previously announced in July that People’s Liberation and Charlotte Russe had teamed up and signed an exclusive 3-year deal. Now the denim brand and mall retailer are suing one another for breach of contract. A December agreement called for Charlotte Russe to carry the People’s Liberation line starting with the 2009 back-to-school season. Shortly after the firms made the deal, Charlotte Russe put itself up for sale and was recently purchased and taken private for $380 million by an equity firm. In a breach of contract and fraud suit filed Monday, Charlotte Russe alleged that during negotiations People’s Liberation misrepresented the quality of merchandise it would provide, and made false promises, such as its ability to provide the services of creative director Marcella Lindeberg, according to WWD.com.

People’s Liberation then proceeded to file its own suit on Tuesday. The Los Angeles-based denim brand alleged that shortly after the sale, Charlotte Russe’s new ownership said it was not interested in third-party brands and proceeded to send a contract termination notice to the denim brand. According to the People’s Liberation complaint, their contract called for Charlotte Russe to order at least $65 million worth of goods over three years. The firm is seeking $59 million it says it is owed on the contract as of September 30 and other damages.

So, who’s in the wrong? I sure don’t know. As of right now, Charlotte Russe is still selling People’s Liberation… anyone want to start a pool on how long that’ll last?

Love,
JP

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