Los Angeles International Airport (LAX) has become the center in a battle between two retailers over a scarce California commodity: water.
It's the bottled variety that has touched off a legal war between Kitson Stores, an LA-based retailer of trendy high-end fashion, and the Hudson Group, which owns and operates several stores at airports around the country.
More than a year ago, Kitson licensed its name to two Hudson stores inside LAX. Under the agreement, Kitson provides Hudson with the items it wants sold, and Hudson in return gives Kitson six percent of gross sales.
Enter the bottled beverage at the heart of the dispute. Recently, Kitson sent Hudson liter bottles of Smartwater it was already selling at its own stores around Los Angeles for $2.55, but wanted Hudson to sell them inside the airport for the same price.
Hudson, however, refused to accept the shipment. The reason? Inside LAX, a bottle of Smartwater sells for $4.68—a whopping 200 percent mark-up from its retail price outside the terminal (at one Ralph's store, a Smartwater liter sells for a mere $1.49).