NEW YORK — A federal jury ruled that Lands’ End must pay nearly $38 million to bankrupt Hagale Industries for failing to disclose plans to move work away from the vendor.
Included in the verdict were $4.5 million in compensatory damages and almost $33.5 million in punitive damages.
Hagale is based in Springfield, Mo., where it filed the lawsuit. The nine-member jury agreed with Hagale’s contention that the direct merchant, which was acquired by Sears, Roebuck & Co. this summer, engaged in fraudulent conduct for failing to disclose fully its plans to move business from the vendor to overseas manufacturers.
At its high point, 72 percent of Hagale’s business came from Dodgeville, Wis.-based Lands’ End. The jury also ruled against Lands’ End in a countersuit against Hagale.
"We are taking a look at the jury’s verdict and then we will evaluate our options about how to proceed," said a Lands’ End spokeswoman. "Clearly, we are very disappointed, and remain steadfast in our conviction to evaluate this further."
Hagale’s attorney, Steve Harrell, said the jury also determined that Lands’ End acted with "outrageous and in reckless indifference" toward the plaintiff.
"Lands’ End didn’t disclose that it was planning to move one part of its business overseas in six months and another part of its business overseas in about a year," said Harrell. "As a result, Hagale could not plan accordingly and that is what caused the bankruptcy."
Once Lands’ End severed its 13-year relationship with Hagale in 1999, the company had to begin closing nine of its 11 facilities that employed more than 1,700 people. In January 2001, Hagale filed for Chapter 11 bankruptcy protection and has since ceased business with more than $22 million in debt.
The legal claim against Lands’ End is the company’s single remaining asset and its Lands’ End judgement will go to U.S. bankruptcy court, where it will be used to pay legal fees and debts.
EXCLUSIVE: @tomford is opening its first-ever beauty store. The boutique, which opens November 20 in London’s Covent Gardens, was designed with the over the top glam Ford is known for. Read the full story on WWD.com, link in bio. #wwdbeauty #wwdnews (📷: Simon Wagner) #TomFordBeauty
New York-based DJ @harleyvnewton threw a party to celebrate the holiday collection of her dress and pajama line @hvn at the Ladurée Beverly Hills. It Girls @katebosworth, @rashidajones and more joined in on the fun, which included cocktails, croque monsieur sandwiches and a photo booth. #wwdfashion (📷: Owen Kolasinski/BFA.com)
For the holidays, @Burberry partnered with 20-year-old artist @blondeymccoy on a series of three outdoor murals in downtown Manhattan. The murals are McCoy’s interpretation of a Christmas eve party, the idea of charity and the spirit of family. His third mural, pictured here, is the most personal. The image depicts McCoy’s grandparents and father in London’s Trafalgar Square in the Seventies. “My work often features lots of sentimental objects.” #wwdeye
For spring 2018, designers applied bold colors and cartoonish motifs on everything from sneakers and belts to key chains. See all the top men’s accessories trends on WWD.com. #wwdtrends (📷: George Chinsee; Prop Styling by @rnasti; Market Editor: @luiscampuzano)
The @dior-sponsored @guggenheim international gala pre-party has a history of drawing cool-girl musical acts to serenade the crowd –– and last night was no exception. @haimtheband performed songs both new and old, and lured a star-studded audience with the likes of Rebecca Hall, Kate Mara, Mamoudou Athie and more. #wwdeye (📷: @lexieblacklock)
In a partnership between the @metopera and the @englishnationalopera, “Marnie” was born. The opera, with costumes sponsored by @mrporterlive, is an adaptation of the 1961 thriller by Winston Graham. Arianne Phillips, who created the costumes, is no rookie: She’s styled Madonna for her tours and created costumes for a myriad of films in the past. Read WWD’s interview with Phillips, where she talks about her inspiration for the opera’s costumes on WWD.com #wwdfashion
@barneysnyc took a different approach to their holiday windows this year. Instead of Christmas decor, Barneys tapped @thehaasbrothers to tell a story of positivity, gratitude and inclusivity via heartwarming silliness and humor. “It’s about kids and it’s about coming together and being family and loving each other,” said Simon Haas. #wwdfashion (📷: @joshuascottphoto)
Beauty influencer @kandeejohnson makes her foray into hair care with a collaboration with @ogx_beauty — making it the first time that OGX has teamed up for a product creation. The collab includes shampoos and conditioners in three scents. At 39 and a mom, Johnson is a different profile than the emerging social media stars, but is considered one of the pioneers of the digital beauty influencer world. Read WWD’s interview with her on wwd.com, including the strangest beauty product she’s ever tried #wwdbeauty