Apparel Group to Weigh Response to Lerner Stores

A group of Los Angeles-based apparel manufacturers said Wednesday that they plan to meet this week to explore what legal action might be taken against Lerner Stores, which unexpectedly canceled $100 million worth of orders with 100 companies earlier this month.

It is unclear how much business or how many manufacturers in the Los Angeles area were affected by Lerner’s cancellation, the size of which is unprecedented. The chain’s new owner, the Limited Inc. of Columbus, Ohio, said the move was necessary to exert control over Lerner’s inventories, which it described as being plagued by irregularities in ordering and poor record keeping.

Members of the California Apparel Manufacturers Productions, which plan to meet Friday, are particularly concerned that the Lerner action might set a precedent for retailers “to have an open license to do whatever they want to,” said Mike Geller, president of the trade group, composed of manufacturers of budget clothing.

In recent years, retailers have increasingly had the upper hand in negotiating terms of orders. Retailers often cancel individual orders, but, traditionally, stores and manufacturers work out such snags on their own. Lerner’s action raises the question of whether this system will continue to work.

“At what point is this an isolated situation with Lerner or something that might become the norm?” Geller said.

John Poyer, national sales manager for and a principal of Topson Downs of California, said he is also concerned because “there is no guarantee for any manufacturer that an order a retailer writes is valid.” His firm, which produces blouses for juniors, is now trying to find new buyers for $300,000 in orders canceled by Lerner.

Separately, a spokesman for the Limited said Lerner is reinstating some orders on a “selected basis,” but he declined to elaborate.