Videotron told to close boutique at Lachine centre

Lease violates deal with EZ Games

A Superclub Videotron store has been ordered to close its video-game boutique by a Superior Court judge because its presence at Les Galeries Lachine violated an exclusivity guarantee made to another tenant of the shopping centre, the video-game retailer EZ Games.

Judge Geneviève Marcotte ruled that Riocan Holdings (Québec) Inc., which runs the centre, should not have granted Videotron a lease incorporating a Microplay videogame boutique in January 2012 after concluding a fiveyear contract with EZ Games six months earlier.

Both stores featured video games, new and used, for purchase, sale and trade.

EZ Games said it noticed an impact on business as soon as the Videotron/Microplay store opened on the site in March 2012. There was direct competition on used games, which the owner of EZ Games told the court was the most profitable part of the business, and sales fell 50 to 60 per cent.

Riocan’s defence was that, since the Videotron store did not have direct access to the interior of the shopping centre and its main activity was film sales and rentals and not video games, there was no violation of the contract. Marcotte disagreed. She said Riocan had failed to respect the spirit of its exclusivity agreement with EZ Games.

“Microplay is a direct competitor with EZ Games,” she wrote.

Evidence at the trial showed the Microplay boutique accounted for 12 per cent of the space but 27 per cent of revenue at that Videotron location in the first four months of operation.

Regardless of the percentages, the consequences for EZ Games could be “catastrophic,” potentially even insolvency, Judge Marcotte said.

She gave Riocan 10 days to close the Microplay boutique. Failing that, the operator of the Videotron outlet would have 20 days to do it.