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(June 12, 2001) ROME -- Ladies tennis champion and world No. 1 Martina Hingis has filed a $40 million lawsuit in a New York court against Italian sportswear giant Sergio Tacchini, a case that experts say threatens to become a public relations nightmare that could force the marketer to countersue.

At the heart of the matter are Sergio Tacchini shoes that the 20-year-old Ms. Hingis was paid to endorse and wear. According to court papers, the shoes hurt her feet and affected her play, forcing her to withdraw from several tournaments in 1998 and 1999. She complained publicly, sparking a riff between her and the company. Sergio Tacchini ended up releasing Ms. Hingis from her five-year, $5.6 million endorsement deal two years ago, with one year remaining on the contract. Ms. Hingis quickly snapped up a deal with Adidas.

Experts say that whatever the outcome of the case, the publicity surrounding it will only be bad news for Sergio Tacchini's marketing.

"Can you imagine the casual tennis player or weekend athlete with no real brand loyalty reading about this and then going to a store and deciding to buy Sergio Tacchini shoes instead of something from Adidas or Nike?" said Pietro Martino, a marketing expert at the University of Rome. "Much of the damage has already been done."

The company's main advertising agency is Milan's Armando Testa. The agency said there were no immediate plans to change Sergio Tacchini's advertising strategy, which relies heavily on testimonials from successful athletes.

For its part, Sergio Tacchini spokesman wouldn't comment on the case. But in a statement filed when Ms. Hingis was released from the company's payroll, Sergio Tacchini alleged wrongdoing from Ms. Hingis, saying that the tennis star "damaged our image and our products because of her behavior and extremely discrediting statements concerning her main sponsor."

Mr. Martino said that if the court decides that Ms. Hingis' case is groundless, it may force Sergio Tacchini to file a counter suit against the star in order to recoup the damage done to the company's business. At the very least, he said, the company will have to take some non-legal but public steps to protect its reputation.

"Cases like this are not only tried in the court of law but also in the court of public opinion," Mr. Martino said.

Though Sergio Tacchini is a diversified sportswear company, its still generates most of its revenue from tennis-related equipment and merchandise. The company's founder, Sergio Tacchini, was an Italian tennis great in the 1960s, and the company's stable of athletes since then have included some of the greatest players to ever play the game, including John McEnroe, Jimmy Connors, Vitas Gerulaitis, Mats Wilander, Martina Navratilova, Gabriela Sabatini and Pete Sampras. -- Eric J. Lyman

Copyright June 2001, Crain Communications Inc.

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