Tiffany's H&M Lawsuit Is Nonsense

Last Updated Sep 11, 2009 2:42 PM EDT

Jeweler Tiffany & Co. is apparently afraid that popular discount-fashion retailer H&M will dumb down its luxury brand. The former is unfortunately suing mall owner Westfield Group for bringing H&M into its Westfied Century City in Los Angeles.

According to Tiffany's lawsuit, as quoted in the Los Angeles Times: "The location of the H&M store will cause irreparable injury to Tiffany's business reputation as a luxury retailer, a reputation that Tiffany has enjoyed and worked hard to maintain for more than a century and a half." Well, that's laying it on a bit thick.

There is no doubt that the majority of Century City's retailers are pretty high end. But there are some stores in the mall that offer reasonably priced goods, such as The Container Store, shoe retailer Aerosoles and cosmetics chain Sephora, which operates departments in -- of all places -- many JCPenney stores. So why pick on H&M?

What makes the lawsuit even crazier is that H&M and Tiffany are already leasing space together in more than one shopping center. Ross Park Mall in Pittsburgh has both. So does Oakbrook Center, outside of Chicago. Seattle's University Village also has one of each.

And these two brands should share space. Long gone are the days when consumers exclusively shopped at either upscale or discount stores. It's not uncommon at all nowadays for a wealthy consumer to spend thousands on a dress at Nordstrom and then shop for necessities at Target. The two even share the same shopping center in some instances.

Plus, H&M openings are such big events in most locales that nearby retailers should love the attention. Foot traffic gets people into stores, right? Tiffany should take note, seeing that its U.S. stores, which recorded a 16 percent same-store sales drop during the second quarter, could likely use some more visitors.

In the previously mentioned Times article, one interviewee speculated that Tiffany might be putting the lawsuit forward in efforts to obtain a decrease in rent. If that's the case, and it's hurting so bad, then Tiffany should take a page out of H&M's playbook and beef up its selection and promotion of $150-and-under jewelry.