In Brief : K mart Slapped With $60-Million Judgment for Breach of Contract
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PROVIDENCE, R.I. — K mart Corp. was hit with a $60-million judgment today when a federal jury found that the nation’s second-largest retailer had breached a contract with a now-defunct clothing buyer.
Fashion House charged K mart with ignoring a 1983 agreement requiring the retailer to purchase 85% of its name brand and designer label apparel through the wholesaler.
K mart canceled the four-year contract in April, 1986, shortly after Fashion House filed suit against it for unpaid commissions.
K mart lawyer Robert W. Steele told the jury in U.S. District Court here the contract was canceled not because of the impending lawsuit over commissions but because Fashion House repeatedly failed to obtain the name brand merchandise the retailer wanted.
He said the stock K mart received came in broken lots, odd sizes and unattractive colors, and that the retailer lost $45 million in its Designer Depot stores, which Fashion House stocked almost exclusively.
Steele could not be reached for comment today.
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