According to Lever Style’s chairman, Stanley Szeto, “Reciprocal tariffs made 2025 the most challenging year for the industry since Covid.” But following a difficult year, the original design manufacturer (ODM) sees its activewear acquisition, asset-light operating model and digitalization efforts powering a return to growth this year.
Lever Style—which produces apparel for brands like AllSaints and Skims—reported revenues of $200.2 million in 2025, 10.2 percent lower than the previous year. 2025 also ended Lever Style’s three-year streak of record profitability, as net profits were down 7.4 percent from 2024, totaling $15.9 million.
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Although there was a general softening on orders tied to tariffs—particularly for brand customers selling into the U.S.—much of Lever Style’s revenue and profit impact was concentrated. In 2025, Lever Style decided to pull back on business with the two customers who were its top clients the prior year to protect itself from risk, resulting in a combined $27.2 million revenue decrease. Removing the impact of these customers, the manufacturer reported its revenue would have grown by 2.7 percent, or $4.4 million.
“In a year when Trump’s Liberation Day tariffs wreaked havoc on the industry, we managed down our business to safeguard our current and future financial health,” said Szeto in a statement about the company’s results.
One of these clients, Bonobos, entered Chapter 11 administration in 2024. That year, Lever Style used recovery methods and credit insurance protection to lower its own financial impact tied to Bonobos’ bankruptcy proceedings. By 2025, Bonobos was under new ownership and “persistent credit concerns” caused Lever Style to reduce its business with the brand by $9.1 million. Another unnamed customer was consistently late on payments, spurring Lever Style to stop taking new orders from them beginning in January 2025. This halted business caused an $18.1 million revenue drop compared to 2024.
Looking ahead to 2026, Lever Style is remaining credit risk averse. “There is a growing trend of retail bankruptcies, which have knock-on effects on brands and the supply chain,” wrote Szeto. “The recent Saks Global bankruptcy filing in January 2026 is causing brands, some of which are our clients, to write off receivables. Many brands’ credit standing[s] are deteriorating, and we will remain very conservative in managing credit risk.”
Szeto also pointed to macroeconomic risks, including the chance of a recession if equity or cryptocurrency markets weaken. Despite that, in an interview with CNBC, he said, “We remain cautiously optimistic, because we feel that we have a competitive business model that will let us outperform the industry regardless.”
Based in Hong Kong, Lever Style collaborates with around 150 factories across China, Vietnam, Cambodia, Bangladesh, Thailand, Indonesia and India. This partnership model has provided flexibility amid disruption. Szeto told CNBC that Lever Style is eyeing further diversification, both in Asia and beyond, including countries such as Turkey, Portugal and Peru.
Against the backdrop of 2025’s challenges, Lever Style achieved a record 7.9 percent net margin, which it attributes to cost control measures and efficiency related to digitalization. The company is currently saving time on “mundane tasks” like reading purchase orders and managing factory invoices by leveraging automation and artificial intelligence. Going a step further, Lever Style created a digital marketplace that lets factories accept orders, which 35 of its factory partners have joined so far.
Another factor that Lever Style expects to fuel growth this year is the acquisition of Active Apparel Group (AAG), announced in December. Marking its seventh acquisition since its IPO in 2019, Active Apparel Group expands Lever Style’s capabilities in the fast-growing activewear market and adds roughly 25 new clients. Szeto sees the potential for crossovers, with AAG providing an opening to activewear for fashion brands and AAG’s current customer base able to branch into other fashion categories.
As with its last six acquisitions, Lever Style purchased AAG’s business, but not its factory, contributing to its asset-light strategy that it says provides a “sustainable competitive advantage.” Being asset-light also supports cash generation and contributed to the company’s debt-free status in 2025, with Lever Style reaching a record $41.5 million net cash position.
“Beyond AAG, we are continuing to explore other strategic merger and acquisition opportunities to further strengthen our product category portfolio, expand our production base and gain scale that creates synergies and operating leverage,” noted Szeto.
