Inside Lever Style vs. Peter Manning
Hong Kong garment supplier Lever Style Limited is suing New York-based apparel company Peter Manning and its CEO, Jeff Hansen, in an attempt to recover over $1.1 million that it claims has not been paid by the clothing brand targeting men of short stature.
Court documents state that Peter Manning “stopped paying certain invoices related to its purchase orders placed with Lever Style” in late February 2023. Hansen is named as a defendant because, per the legal paperwork, he provided a personal guarantee for costs incurred by Peter Manning.
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Peter Manning has countersued the certified B Corp, which previously produced about two-thirds of its apparel assortment, alleging that it has engaged in “predatory business conduct,” which included “extraordinary price gouging.”
In the counterclaim, Peter Manning’s counsel writes, “Lever’s sudden price surges, often in the double digits and sometimes as staggering as 48 percent, starkly breached its agreement with Peter Manning NYC and deviated from industry customs and norms.”
Stanley Szeto, the Hong Kong-based company’s CEO, said, as is often standard in the industry, the two did not have a long-term contract.
“There’s no long-term supply contract with Peter Manning or any other brands that we work with. It’s order by order,” Szeto told Sourcing Journal.
Current Lever Style clients include Columbia, Helly Hansen, Hugo Boss, Bonobos and more, per the company’s website. The manufacturer has also made six acquisitions since its IPO in 2019.
Szeto said Peter Manning placed routine orders, each of which had its own purchase order and invoice. He noted that the ex-client always knew the cost of an order before placing it.
Per Szeto, the price Lever Style offers its clients can fluctuate for a number of reasons: quantity ordered, fabric changes, cotton prices and more. He said the company keeps its prices in line with competitors.
“It’s a cost-plus business, so it’s whatever the cost to manufacture certain garments [is], and then hopefully we have a little bit of margin. We are always within the market price range,” he said. “Otherwise, whether it’s Peter Manning or somebody else, if we’re too expensive for that particular order, brands will buy from other suppliers. At the end of the day, in apparel, there are lots of suppliers.”
According to Lever Style’s complaint, Peter Manning’s debt totals $1,142,375.11.
Peter Manning’s counterclaim notes that leaving a garment supplier behind can be a costly and difficult process.
“Once committed to a factory for its branded output, pivoting to another manufacturer is not only challenging and expensive but also requires a timeline of six to nine months,” the counterclaim states.
According to Szeto and the legal paperwork, Lever Style delivered all goods as ordered.
But Peter Manning’s counterclaim alleges that not all of the products Lever Style produced for the company met quality expectations.
“Lever’s production quality nosedived, resulting in garments that were riddled with defects,” the countersuit alleges, pointing specifically to the use of defective buttons on “tens of thousands of units,” of one of Peter Manning’s flagship products.
Hansen said the quality issues his counsel cited in the counterclaim affected multiple parts of the brand’s assortment.
“The quality issues related to a number of different products, unfortunately. Basic stuff, like buttons falling off chinos, which is maddening for customers,” he said.
Szeto said that while he could not confirm whether Peter Manning had lodged complaints about its products with Lever Style, clients who have an issue with their garments typically flag the problem to the production company immediately.
“If a quality problem was raised a year or two after garments were shipped, then we would have high suspicions about the legitimacy of such a claim,” Szeto told Sourcing Journal. “If a brand is trying to wiggle out of its payment obligations, it can always claim that there is a… problem, that Lever Style didn’t deliver.”
Hansen told Sourcing Journal Peter Manning alerted Lever Style to the alleged quality issues several times.
“With an online business, you hear from customers immediately if you have a problem, via customer service and reviews. So we knew we did, and of course brought these issues to the attention of Lever Style many times,” he said. “There were a lot of promises about fixing the issues, but they unfortunately persisted for several seasons.”
Lever Style’s original complaint notes that, “Upon information and belief, none of the goods delivered by Lever Style to [Peter Manning] were returned.”
Hansen told Sourcing Journal that Peter Manning did return products when the company could “catch the issue early enough,” citing the return of its Field Jackets due to tearing at the pockets.
But with larger-scale issues, he said, Peter Manning did not return product to Lever Style.
“Frankly, in the biggest cases, like with our chinos (front button falling off) and our jeans (crotch seam tearing), we only understood the severity of the issues after thousands of units had been delivered to customers,” he said. “We [were] left with the decision to send back remaining units, and literally not have our two most popular products in stock, or hope that the issue is not as widespread as we thought.”
Hansen and Peter Manning’s counterclaim states that the alleged quality concerns led to deterioration of the brand’s reputation.
Hansen said he believes that customers who do not report their issue to the company were less likely to come back to shop with the brand again. If a customer does report an issue, he said, the brand can usually address and remediate the issue.
Peter Manning’s counterclaim also references Lever Style’s litigation against two other companies, calling the company’s legal actions a “sudden barrage of lawsuits against Peter Manning NYC and other small businesses.”
Court records show Lever Style sued New York-based cashmere company Naadam and United by Blue (UBB) to recoup $1,509,422.34, a balance that Lever alleged the latter had not paid.
Naadam purchased UBB in 2022, but per a cross-motion from Naadam’s counsel, Lever Style’s counsel inaccurately extended liability to Naadam for UBB’s debts.
“Naadam never purchased or acquired any of UBB’s debts, liabilities, or assets in May 2022, instead it purchased stock in UBB (an LLC), which made it a member of UBB,” the cross-motion notes.
Legal action between Naadam and Lever Style was mutually discontinued in October of 2023.
Lever Style has an open case against athletic wear company Champ-Sys USA LLC, in which it alleges that Champ-Sys owes it $509,579.33. Lever Style alleges the Nebraskan brand has failed to pay numerous invoices despite receiving finished goods.
The complaint alleges that Champ-Sys entered a payment agreement with Lever Style that required the company to pay its debts, and “additional charges,” in full by February of 2022. Per Lever Style’s complaint, Champ-Sys did not fulfill that obligation.
In an answer to the complaint, counsel for Champ-Sys accused Lever Style of “predatory lending/cash advance practices.” It noted that the plaintiff did not ascertain—or ignored—the existence of other cash advances or loan obligations the defendant had, and said that the plaintiff had “unclean hands” because it made promises about flexibility and leniency in repayment that it did not deliver on, and because it “buried” the terms of the fees.
After receipt of Peter Manning’s counterclaim, Lever Style’s counsel filed a motion to dismiss the counterclaim, which demanded the case go before a jury.
In a phone conference on Jan. 5, Judge Andrew L. Carter referred the Peter Manning case to James Cott, a United States Magistrate Judge in the Southern District of New York. Magistrate mediation would allow the two parties to work toward a settlement with the assistance of the court.
“This is a big win for us, as we have been pushing for a settlement from the start,” Hansen told Sourcing Journal. “Settling this bill at a meaningful discount which accounts for the price gouging will be a fair and reasonable outcome.”
Because the two parties will work to settle outside of trial, Lever Style’s motion to dismiss will be held in abeyance.
Per court documents, the parties will be required to file a joint status update in late March.
