Ellery 'sorry' for breaching Myer contract
However, the 29-year-old has also publicly apologised to Myer and is now saddled with a big legal bill after settling with the department store following a week-long trial in the Supreme Court of Victoria.
Ellery on Tuesday formally apologised to Myer for breaching a four-year exclusivity deal when she signed a new deal with David Jones last year. She has agreed to keep supplying Myer with her Ellery Land label and extend the supply contract until 2015.
However, she will keep supplying David Jones with both Ellery Land and another label, L'America, and will supply David Jones exclusively from 2015 onwards, according to a David Jones spokeswoman.
In a joint statement released by a Myer spokeswoman outside the court Ellery said: "I truly regret making such a mistake and going forward I will honour my agreement with Myer and will extend my supply of the Ellery collection to Myer until 2015.
"I am grateful that I have been granted the opportunity to also continue supplying my main-line collection to David Jones."
Myer noted that Ellery would contribute towards its legal costs, although details are confidential.
"I think the experience in the whole was a very draining one, but I learnt a lot from it," Ellery told BusinessDay, "but it is really nice to be back in my design studio.
"[The outcome] means that I am going to be supplying both department stores, so I have a lot of work to do."
Ellery will supply both Myer and David Jones with her spring 2013 collection, called Renegade.
A David Jones spokeswoman said the department store was "pleased that the litigation between Ellery and Myer has been settled and that we have secured ongoing distribution of Ellery".
Myer started legal action in January after learning Ellery had signed a deal to supply David Jones last November - in breach of her four-year exclusivity agreement with Myer.
Myer went to trial seeking a permanent injunction stopping her from supplying David Jones until 2014, and unknown damages. It had previously asked the the court to force Ellery to fulfil an order worth $315,000 that it placed in September 2012, but never received.
Myer spokeswoman Jo Lynch said the store was pleased with the settlement and looked forward to working with Ellery again.
"There has been significant time and cost in the Supreme Court proceedings that have taken place to ensure that we have been able to continue to gain the supply of Ellery Land. For us it has ensured that exclusive agreements, that are a big part of the retail industry, will continue going forward," Ms Lynch said.
Details of the settlement and Myer's new business plan with Ellery remain confidential under the terms of the settlement.
It emerged during the trial that business plans can dictate how much stock and what type of stock a retailer must buy.
Frequently Asked Questions about this Article…
Kym Ellery breached a four-year exclusivity agreement with Myer by signing a deal to supply David Jones. Myer started legal action in January and took the matter to a week-long trial in the Supreme Court of Victoria. Ellery publicly apologised, settled the case, agreed to keep supplying Myer (extending the Ellery Land supply until 2015) and will continue supplying David Jones (with an exclusive arrangement for David Jones from 2015). She will also contribute toward Myer’s legal costs, with other settlement details kept confidential.
Myer sued because Ellery signed a deal to supply David Jones last November in breach of her four-year exclusivity agreement with Myer. Myer went to trial seeking a permanent injunction to stop Ellery supplying David Jones until 2014, unknown damages, and previously asked the court to force her to fulfil an unpaid order worth $315,000 placed in September 2012.
Under the settlement Ellery apologised to Myer, agreed to extend supply of the Ellery Land collection to Myer until 2015, will continue supplying David Jones (including Ellery Land and L'America) and will supply David Jones exclusively from 2015 onward. Ellery will contribute towards Myer’s legal costs; further commercial details remain confidential.
David Jones said it was pleased the litigation was settled and that it had secured ongoing distribution of Ellery. The outcome gives David Jones continued access to Ellery’s collections now and an exclusivity arrangement from 2015, strengthening its designer-range offerings and competitive position in department-store stock.
The dispute highlights that exclusivity agreements are a significant part of the retail business model. For investors, that means exclusivity can protect a retailer’s differentiation and customer draw, but breaches can lead to costly litigation and operational disruption—so how retailers manage supplier contracts matters to performance.
Yes. The article notes Ellery is saddled with a large legal bill and will contribute to Myer’s legal costs, and she described the experience as draining. Operationally she will now supply both department stores (including the spring 2013 Renegade collection), which implies increased production and distribution work.
The episode illustrates several risks: contract breaches can trigger injunctions and legal claims, unpaid orders or disputes over fulfilment can arise (Myer sought to enforce a $315,000 order), and reputational or financial strain on the designer or retailer may follow. Investors should watch contract clarity and enforcement between brands and retailers.
Investors should monitor company releases about supplier agreements and inventory plans, any future legal-cost disclosures or financial impacts, how well the Ellery ranges are stocked and sell through at each retailer, and whether exclusivity arrangements are being enforced or renegotiated—since these factors affect merchandising strength and customer traffic.
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