Westfield Sues Victoria’s Secret For $32M Over World Trade Center Store Retailer 'Abandoned'

The recovery may be in full effect, but legal disputes between retailers and landlords are still piling up.

Unibail-Rodamco-Westfield, which owns the Westfield World Trade Center shopping mall, filed a complaint in the New York Supreme Court last week, arguing Victoria’s Secret has violated the terms of its lease at the center when it "abandoned" its Lower Manhattan store without justification.

The retailer told the landlord back in January that it was leaving, according to Law360, claiming it had the right to leave because its lease features a co-tenancy clause that allowed it to terminate the contract if the landlord did not keep 75% of the stores open for 12 months in a row. Westfield said in its complaint that the occupancy didn’t fall below 75% and that it told Victoria’s Secret as much.

“Victoria’s Secret nevertheless maintained that, based on nothing more than 'physical observ[ations] on multiple occasions by [Victoria’s Secret] personnel,” the Co-tenancy Requirements were not met,” Westfield's attorneys wrote in the complaint. 

Victoria’s Secret “ceased operations and abandoned the premises” back in April, and Westfield now alleges the former tenant owes it $4.3M in back rent and $28.1M in future payments on the lease that runs for another eight years. Westfield’s argument is that it has met all requirements of the lease, and it is the tenant that has in fact violated the terms by leaving, closing down the store and failing to pay rent.

The pair have been locked in a legal battle for some time now, with Victoria’s Secret first suing Westfield back in 2019, claiming it had been adversely affected by construction delays after signing up for the space back in 2015.

Since the coronavirus pandemic began, Victoria’s Secret has been embroiled with other suits with retail landlords across the city. Last year, the company tried to sue SL Green to have its lease at 2 Herald Square terminated. It was paying almost $1M per month there but lawyers for the retailer argued that with the city closed for business, the lease was rendered “nonsensical.”

Several other retailers took a similar path, but a judge dismissed Victoria Secret’s suit in January, siding with the landlord’s argument that the pandemic didn’t make lease contracts void.