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H&M Store Opening Undercut by Lawsuits

Grammy- and Oscar-winning singer John Legend is set to help H&M celebrate the Wednesday opening of its biggest store yet. But the four-level, 63,000-square-foot flagship in New York’s Herald Square is proving to be a headache for the Swedish fast-fashion retailer.

JEMB Realty, the New York-based real estate firm that owns the Herald Center property housing the new H&M store, smacked the retailer with a $25 million lawsuit on May 7 for failing to cough up the cash for the extensive renovation work on the building’s custom illuminated facade that wraps around 33rd Street, 34th Street and 6th Avenue.

According to The Real Deal, JEMB alleges that H&M approved a revamp that would cost “significantly in excess” of the landlord’s contribution, yet has “failed and refused” to pay for it. In addition, JEMB claims it has “performed its obligations” as outlined in the lease agreement.

Once anchored by the defunct discounter Daffy’s, JEMB approached the retailer in 2013, despite there already being two H&M stores within a one-block radius. And the match is proving to be anything but: The lawsuit was filed on the same day that H&M sued the landlord for more than $11 million, likening the stylized storefront to “funhouse” mirrors and claiming it was “not substantially similar” to the renderings the retailer had signed off on.

Moreover, H&M alleges when the work wasn’t completed in mid-December, as the two parties had agreed upon, the retailer was required to pay more than $2 million to ensure the façade would be ready for the store’s May 20 opening, in addition to more than $4 million to repair “defective work.” Now, H&M wants to be reimbursed and is also looking for $41,000 for each day the work went over the deadline, bringing total damages sought to more than $11 million.