Lever Style Grows Portfolio with Acquisition of Performance Apparel Maker
Newly minted B Corp Lever Style is expanding with a new acquisition.
The Hong Kong-based multinational apparel supplier with production hubs across China, Vietnam, India, Indonesia and Cambodia is broadening its reach with the acquisition of apparel maker Elegant Team Development on Sept. 12. The move stands to strengthen Lever Style’s skill set within the active and outdoor apparel arena, while helping the company plant a stake in Bangladesh, where Elegant operates.
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Lever Style executive chairman Stanley Szeto said the firm acquired Hong Kong-based Elegant’s $5.5 million in net working capital assets for $4.8 million in cash—a 13 percent discount to net asset value, which is accretive to shareholders. “After this acquisition, and the interim dividends that we just paid out, we…still have a significant net cash position that allows us to capture further acquisition opportunities,” he said.
The purchase marks Lever Style’s sixth acquisition since its 2019 IPO, and the first after a two-year post-Covid acquisition hiatus. Szeto said the Elegant deal underscores the company’s strategy to offer “modular and portable production at scale” serving clients including Hugo Boss, Arc’teryx, Rag & Bone, Vuori, Spanx and Helly Hansen. The plan will allow Lever Style to create incremental profitability through achieving synergies across its portfolio, like cross-selling and economies of scale.
“In tough times, our strategy is to grow inorganically,” Szeto added, focusing on strengthening its foothold across new markets and developing greater agility. He characterized 2023 as “the most challenging year since 2020 for the apparel supply chain sector.” U.S. apparel imports during the first half of the year were down nearly one-third from the same period in 2022, and most Hong Kong-listed apparel producers saw sales drop by between 20 percent and 35 percent, he said. Lever Style bucked those trends with 3.6 percent growth in the first half of 2023, following 51 percent growth last year.
The company has recently focused on ESG and earned B Corp certification last week. Lever Style became one of just 26 companies in Hong Kong to earn the distinction, which spans 92 countries and 7,300 businesses including Patagonia, Eileen Fisher and Allbirds.
Szeto said the certification represents the culmination of more than a decade of work to address emissions and ensure social compliance. Lever Style was the first apparel company to partner with WWF on the Low Carbon Manufacturing Program in 2009, and the first manufacturer in China to achieve Social Accountability International’s SA8000 certification, indicating that it complies with labor standards and provides a safe, fair workplace.
