Aussie make-up giant Mecca has won its legal battle with a celeb-endorsed US brand that wanted to cancel an exclusive arrangement because of coronavirus restrictions.
The beauty retailer launched court action against California-based Hourglass Cosmetics in Victoria’s Supreme Court late last year.
The cult US brand snared supermodel Rosie Huntington-Whiteley as an ambassador last year before she launched her own make-up business.
But Hourglass breached its contract with Mecca when it ended its exclusive agreement and by selling its products online directly to Aussie and Kiwi customers, Supreme Court Justice Michael Osborne ruled.
He found the termination was “invalid and of no legal force”, and that the decision to sell directly to consumers was another breach.
“Mecca will continue to stock Hourglass products both online and in-store on an exclusive basis,” a company spokeswoman said.
“Over the past decade we’ve worked closely with Hourglass to help build it into one of the most-loved beauty brands in Australia and New Zealand, and we’re looking forward to continuing this partnership.”
Hourglass was contacted and said it could not “offer any commentary”.
The stoush began in May last year when Hourglass chief executive Carisa Janes sent a letter to the Australian retailer to cancel their exclusive distribution contract.
Mecca had been unable to distribute its 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, according to the letter.
But the Australian retailer said it was still selling products online and argued Hourglass breached the agreement when it sold make-up directly to Australian and New Zealand customers in October 2020.
Because of the direct sales, Mecca suffered “loss and damage” and the company wanted compensation, according to a statement of claim.
However, Hourglass later abandoned the claim about the coronavirus store closures in June this year, two weeks before the case was set to go to trial.
The cosmetics company argued the initial exclusive distribution agreement was “void and unenforceable” because it was “vague, uncertain and incomplete”, according to a defence document.
Mecca founder and boss Jo Horgan took to the stand during the trial in August and in a statement said the company’s marketing and promotion of Hourglass led to “exceptional” sales for the brand in Australia and New Zealand.
“I believe that Mecca was Hourglass’ biggest international market until at least 2017,” she said in her statement.
The judge ordered Hourglass to pay the make-up giant’s costs and ordered them into mediation for damages.