Stores battle it out over Ellery fashion collection

MYER and David Jones are battling over exclusive rights to sell designs by the fashion star Kimberly Ellery weeks before the label is to help launch this year's winter collections.

Myer began legal action against Ms Ellery last week, claiming she had breached an exclusivity contract and failed to supply Myer with her autumn and winter collections. The parties are rushing to settle the matter before David Jones launches its new collection on February 4, and will return to court next week after Justice Michael Sifris of the Supreme Court of Victoria agreed to hear the matter urgently.

Myer alleges Ms Ellery breached a supply contract and exclusivity deal by defecting to David Jones with her Ellery and L'America branded clothing. It is seeking damages and an injunction restraining her from selling goods to other department stores, which would effectively ban her from participating in David Jones's season launch.

Meanwhile, Myer has not yet decided whether to feature Ellery in its winter collection because "we can only continue our commitment to Ellery when that commitment is reciprocated", a spokeswoman, Jo Lynch, said.

Myer was disappointed it was unable to resolve the breach outside court and had already "invested significantly in growing and promoting the [Ellery] brand".

Myer signed a supply contract with Ms Ellery's label Ellery Land in August 2011 before upgrading it to an exclusivity contract, preventing her from supplying any other large chain stores until September 2014, according to documents lodged with the Supreme Court.

A lawyer for Ms Ellery, Charles Shaw, said the contract with Myer was excessively restrictive because it "does not oblige Myer to buy anything from the defendant" but prevented his client from supplying David Jones. "David Jones will feature [Ellery] prominently in its 2013 winter season launch," he said.

A lawyer for Myer, Bart Carew, said it offered Ms Ellery at least $1.5 million in sales in December in an effort to keep the contract. Legal documents show that in September Myer ordered 645 pieces from Ellery to be supplied between January and April. None of these items have been delivered.

David Jones is not part of the action. A spokeswoman said it has signed a supply contract with Ms Ellery.