(Filed Under Financial and General Interest News). Magic Link, a producer of intimate apparel with production facilities in Asia, is in the midst of a court case with the retailer ThirdLove, in which Magic Link seeks damages in excess of $5 million.
The original claim was filed in August of 2018 in Massachusetts, was answered by counterclaims from ThirdLove, and has been moved to California where the case is currently expected to go to trial on August 3 of this year, according to Matthew Fink, a principal at Magic Link.
The suit claimed that ThirdLove “failed to pay invoices, deducted spurious amounts from payments, canceled orders it had no right to cancel, and otherwise has damaged ML in an amount that exceeds $5 million.”
According to the original filing, “In 2012, ThirdLove approached ML with a drawing of a bra and panties manufactured by a business other than ThirdLove. ThirdLove sought to engage ML to design and to manufacture similar products for ThirdLove. ML invested considerable sums in designing, testing, fabricating, sourcing, developing and manufacturing the components of the products that ThirdLove would be selling.” The suit explained that Magic Link developed a range of components for the intimates, using its own network of suppliers, and that “ThirdLove has no ownership, proprietary rights or intellectual property rights in them.”
Thereafter, over several years, “ThirdLove ordered product pursuant to purchase orders, and ML produced and shipped products under specific invoices” without an overall “master agreement” between the two parties. The suit claimed, however, that “ThirdLove repeatedly sought to go behind ML to determine its sources of supply and component and other costs. While the parties negotiated a possible arrangement by which ML would allow ThirdLove some such information, they never concluded that agreement. Nonetheless, ThirdLove has attempted and continues to attempt to induce ML’s suppliers to cease doing business with it or to do business directly with ThirdLove.”
Emailed requests for comments on the case, sent to an independent press spokesperson for ThirdLove, as well as the company’s official press link, as well as another spokesperson, have not received answer. BODY was not in possession of the ThirdLove counterclaims as we went to press.
In the filing Magic Link listed several amounts it is due. It claimed ThirdLove failed to pay invoices in the amount of $1,698,810.68 for products it had already received. (ThirdLove agreed, after Magic Link filed the case, to pay about $250,000 for some of these products and Magic Link immediately released them for delivery.)
Magic Link also asserted ThirdLove, without valid reason, deducted $128,080.50 from previous invoices, claiming that they “related to alleged product defects or other matters that either were fabricated or were greatly exaggerated.”
Next, Magic Link claimed “ThirdLove placed orders in 2018 for product in the amount of $1,790,796.72. It subsequently wrongfully has sought to cancel such orders. ThirdLove has no right to cancel those orders.” Similarly, Magic Link claimed, “ThirdLove issued purchase orders for an additional $2,196,696.25 in products. ML produce[d] the products, yet ThirdLove refuses on spurious grounds to authorize shipment of the products to it. On information and belief, ThirdLove decided after ordering the products that it would go around ML and find another supplier for the same products.”
According to Fink, ThirdLove has claimed in its counter suits that “they haven’t paid for millions of dollars they owe us because they supposedly lost sales because of defects that actually don’t exist in the products they bought from us. The reality is they had over-ordered from us after we decided they were no longer worth keeping as a customer and we agreed to supply products while they ramped up with a new supplier. We think they over-ordered from that supplier too and in any event just decided they wouldn’t pay our last invoices or take delivery of the last orders we made for them and which they accepted at the factory.”
Fink added, in an email message, “We made millions of bras for TL over the relationship for 4 – 5 years. In that span, TL grew to over $150 million dollars of gross sales per year by using ML as the sole supplier of memory foam bras. We never had anything beyond the usual issues between brands and manufacturers until we decided to part ways with them as a customer. TL decided to not take all the goods they ordered from ML during the transition to the new supplier to replace our production. In the counter claim they filed, TL makes all kinds of claims with no substance. I look forward to a jury of my peers or anyone in the industry with real industry experience to answer me why TL would not pay for goods they ordered that passed inspection at the factory. I look forward to a jury of my peers hearing the true story and make TL pay for the goods they ordered from Magic Link.”
Magic Link is headquartered in Hong Kong and has production facilities in China, Thailand and Cambodia.
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