H&M is one of retailing's hottest clothing chains, but Tiffany & Co. doesn't want it for a neighbor.
The storied jeweler sued its landlord at the Westfield Century City shopping center Wednesday, alleging the planned H&M store under construction nearby would tarnish its high-end image at the open-air mall, which caters to an affluent Westside clientele.
Tiffany said its contract with Westfield forbids retailers "whose merchandise and/or price points are not considered to be luxury, upscale or better by conventional retail industry standards" to use or lease certain spaces within, fronting or adjacent to the Tiffany store.
Although H&M is a popular, fashion-forward retailer for young adults, it is also decidedly low-price. In the lawsuit against the shopping center and parent company Westfield Group, Tiffany said: "H&M is not a luxury or upscale retailer. H&M is at best characterized as a 'popular-price' mass merchandise clothing retailer."
"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," the lawsuit said.
A representative for H&M said the company had no comment.
Tiffany is one of the most coveted brands in the retail jewelry business, with its lineup of diamond engagement rings, chunky silver bracelets and other items. Its signature blue box tied with a white ribbon and presence in movies such as "Breakfast at Tiffany's" have made the New York jeweler a household name.
As a luxury seller, Tiffany must uphold its reputation by protecting its turf, said Eli Portnoy, a Los Angeles brand strategist and marketing expert.
"High-end retailers have always felt that it's very important for them to be in the vicinity of like-oriented stores," he said. "People with money and status want to be among their peers; they don't want to be around people who aren't like them. Tiffany has to be mindful of that."
But if the H&M store opens as scheduled in time for the Christmas season, it wouldn't be the first time the two chains have been in proximity: On Colorado Boulevard in Pasadena, H&M and Tiffany locations are practically next door to each other.
Portnoy said there might be additional factors in play in the lawsuit, which was filed in Los Angeles County Superior Court and seeks to stop construction of the H&M store. Although the jeweler is not saying so publicly, it could also be using the lawsuit as a bargaining chip to obtain a lower rent or a better location in the shopping center, or to get out of its lease, he said.
A lawyer for Tiffany said she was not authorized to speak on the case until she received permission from the New York company.
Katy Dickey, a spokeswoman for Westfield, said the company "declines to comment on matters under litigation."
Shares of Tiffany rose 27 cents to $37.28 on Wednesday.
Although luxury retailers have been among the hardest hit during the recession, Tiffany still wants to be known as an aspirational brand, Portnoy said.
"They might be worried about a lower-income customer going into H&M and buying a $19 sweater and wandering into Tiffany's," he said. "Cheap chic is not the image that Tiffany wants in their stores."