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People's Liberation files suit against Charlotte Russe Merchandising
30
Oct '09
People's Liberation, Inc., the designer and distributor of high-end casual apparel under the brand names People's Liberation, William Rast and J. Lindeberg, announced that it filed suit in Los Angeles Superior Court against Charlotte Russe Merchandising, Inc. for breach of a written contract and tort recovery seeking over $60 million in compensatory damages and punitive damages.

The suit alleges that Charlotte Russe approached People's Liberation in 2008 to exclusively license the People's Liberation Brand in the United States and all of Central and North America. To induce People's Liberation to stop providing its premium denim, knit and accessory products to fine department stores such as Nordstrom, Saks Fifth Avenue, and Neiman Marcus, Charlotte Russe executed a multiyear contract in December 2008 that guaranteed minimum purchases of product during the first three contract years of $65 million.

The complaint alleges that Charlotte Russe, without justification or legitimate reason, terminated its contract with People's Liberation within the first year of the relationship. This termination occurred shortly after Charlotte Russe was purchased by the private equity firm of Advent CR Holdings, Inc. The complaint further alleges that Advent CR Holdings, Inc., its parent Advent International Corporation, and Charlotte Russe's management wanted to take the company in a new direction and, in doing so, they were prepared to ignore prior contractual obligations.

“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 CEO. “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.”

Los Angeles-based People's Liberation markets and sells high-end casual apparel under the brand names “People's Liberation,” “William Rast” and, in the United States, “J. Lindeberg.” The People's Liberation apparel line is distributed exclusively through Charlotte Russe retail stores in North and Central America.

People's Liberation Inc


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