According to The Times, the upmarket brand has accused New Look of infringing its intellectual property and damage to its reputation. New Look is set to pay£80,000 in damages to cover the brand's legal costs.
New Look chief executive Phil Wrigley said he had agreed to settle out of court on principle.
The confrontation is the latest in a series sweeping the high street. Matalan, Primark, River Island and Debenhams have all been involved in similar battles in recent months.