Mecca sues US-company Hourglass over contract breach

Aussie make-up giant Mecca is suing a celeb-endorsed US brand over a bid to terminate a contract because of coronavirus.

The cosmetic retailer launched court action against California-based Hourglass Cosmetics in Victoria’s Supreme Court this month.

The cult brand snared supermodel Rosie Huntington-Whiteley as a brand ambassador this year.

The stoush started in May when Hourglass chief executive Carisa Janes sent a letter to the Australian company wanting to terminate their exclusive distribution contract, court documents state.

The letter stated Mecca had been unable to distribute their cosmetics for 28 days because of “the COVID-19 and associated governmental orders” in breach of a contractual clause and this immediately terminated the contract.

The companies inked a deal in 2010 to ensure Hourglass could only sell products in Australia and New Zealand through Mecca.

But the make-up retailer is arguing in court that it didn’t breach the contract and the attempt to terminate the agreement was unlawful.

“Notwithstanding the COVID-19 pandemic, Mecca continued to sell and distribute Hourglass’s products from Mecca’s internet sites at all material times,” the makeup retailer’s statement of claim said.

The statement of claim said it distributed the brand’s products from retail stores from April 24, which meant their shops were closed for fewer than 28 days.

Mecca claims in court documents that it sold millions of dollars worth of cosmetics made by the US-brand between January and September this year.

But in April sales of the makeup slumped to $872,000.

The retailer also claimed Hourglass Cosmetics started selling directly to Australian and New Zealand customers in October, breaching the exclusive distribution agreement.

Mecca claims Hourglass had no legal right to terminate the agreement and it wants the court to stop the brand from shipping to consumers during the term of the agreement.

Mecca is also seeking costs.

Lawyers for Hourglass have been contacted for comment.

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