Why Lever Style’s Chairman is ‘Cautiously Optimistic’ About 2026

Core Insights - The apparel industry faced significant challenges in 2025 due to reciprocal tariffs, marking it as the most difficult year since Covid, but Lever Style anticipates a return to growth driven by its activewear acquisition, asset-light model, and digitalization efforts [1] Financial Performance - Lever Style reported revenues of $200.2 million in 2025, a decrease of 10.2% compared to the previous year, ending a three-year streak of record profitability with net profits down 7.4% to $15.9 million [2] - The revenue impact was concentrated, with a $27.2 million decrease attributed to pulling back business from its top two clients to mitigate risk; without this impact, revenue would have grown by 2.7%, or $4.4 million [3] Client and Risk Management - One major client, Bonobos, entered Chapter 11 administration in 2024, prompting Lever Style to implement recovery methods and credit insurance to limit financial exposure; by 2025, concerns over Bonobos' credit led to a $9.1 million reduction in business [5] - Another unnamed client faced consistent payment delays, leading to a halt in new orders and an $18.1 million revenue drop compared to 2024 [5] Future Outlook - Looking ahead to 2026, Lever Style is adopting a conservative approach to credit risk management due to a rising trend of retail bankruptcies affecting brands and the supply chain; recent bankruptcies, such as Saks Global, are causing brands to write off receivables and deteriorate credit standings [6]