By Jonathan Stempel
NEW YORK (Reuters) -Cartier sued Tiffany & Co on Monday, accusing its luxury rival of stealing trade secrets concerning its high-end jewelry from an employee it lured away in December, in a sign competition in the fast-growing jewelry category is heating up.
According to a complaint filed in a New York state court in Manhattan, Tiffany hired an underqualified junior manager away to learn more about Cartier's "High Jewelry" collection, where pieces typically cost $50,000 to $10 million.
Cartier, a unit of Switzerland's Richemont SA, called Tiffany's hiring of Megan Marino a desperate bid to revive its own high jewelry unit after it was left in "disarray" following several departures, reflecting Tiffany's "disturbing culture of misappropriating competitive information."
According to court papers, Tiffany appeared to pin ultimate blame on Marino by firing her after just five weeks.
In an affidavit accompanying the complaint, Marino said Tiffany was "more interested in hiring me as a source of information than as a High Jewelry manager."
Cartier also accused Tiffany, owned by luxury goods group LVMH, of letting a recently hired former Cartier executive work on a high jewelry project called the "Blue Book" despite her six-month non-compete agreement.
Contacted by Reuters, Tiffany said in a statement: "We deny the baseless allegations and will vigorously defend ourselves."
The lawsuit seeks an injunction requiring that Tiffany return and not use stolen trade secrets, plus unspecified damages.
Cartier said in a statement: "Cartier fully respects the rights of competitors to pursue their commercial objectives. In this case, however, Tiffany’s commercial ambition crossed the line between the ordinary course of business and unfair competition."
Bernstein analyst Luca Solca said he believed LVMH was indeed in the process of becoming a contender for category leadership against Richemont.
"Branded jewelry – after the Tiffany acquisition – has transformed from an oligopoly to a duopoly. Tiffany has plenty of opportunity to revive its fortunes," Solca said in an emailed statement.
On Jan. 19, Richemont said strong demand for jewelry and watches following a trough earlier in the coronavirus pandemic boosted quarterly sales by 32%.
Sales at Richemont's jewelry brands Cartier, Buccellati and Van Cleef & Arpels rose 38%.
The case is Cartier v Tiffany and Co, New York State Supreme Court, New York County.
(Reporting by Jonathan Stempel, additional reporting by Silke Koltrowitz in Zurich; Editing by Sandra Maler and Jonathan Oatis)
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