Asics America and its Japanese parent Asics Corp. have been accussed of deliberately withholding promised inventory and marketing support from 13 retail stores owned by a key U.S. licensee, according to a lawsuit filed in a California court in Los Angeles County. Investors in the U.S. licensee who brought the suit allege that Asics tried to drive the licensee out of business in an effort to acquire the outlets on the cheap.
The complaint, which accuses the Japanese sportswear company of fraudulent and negligent misrepresentation and of breach of oral agreement and the implied covenant of good faith and fair dealing, was filed by financial backers of Windsor Financial Group LLC, including Los Angeles business manager Mickey Segal.
A May 2013 agreement with Asics gave Windsor the exclusive rights to develop, open and operate Asics-branded retail stores in the U.S., Canada and Puerto Rico for a 20-year period. Windsor had no choice but to shut all 13 of its stores as a result of Asics’ bad faith practices, according to the lawsuit, with the flagship outlet in Time Square closing this week.
The lawsuit contends that Asics intentionally limited Windsor’s access to popular products; neglected to follow through on its promise to launch a broad advertising, marketing and promotional campaign; and failed to live up to promises to develop new merchandise beyond running shoes, among other complaints.
In a statement to the media, Asics said it “believes the recently filed legal action is baseless and without merit. We will vigorously dispute this matter, and we are confident the court will quickly agree with us. Until then, we will respect the process and have no plans to debate these baseless allegations publicly.”