Menomonee Falls-based
Kohl's is being sued by a clothing brand who claims the retailer ordered and received nearly $8 million worth of merchandise and never paid for it.
New York-based
PSK Collective LLC, which has a line of active apparel and streetwear, is suing Kohl's for allegedly failing and "ultimately refusing" to pay roughly 1,500 invoices issued from April 2021 through September 2022. Those invoices represent roughly 600 purchase orders that PSK fulfilled for Kohl's during that time period, according to a complaint filed this week in the U.S. District Court for the Eastern District of Wisconsin.
PSK alleges Kohl's falsely represented its intent to pay for the orders and its suing the retailer for breach of contract, statutory misrepresentation and fraudulent
inducement, according to the complaint.
Kohl's did not respond to request for comment.
PSK Collective was founded in 2020 by World Rugby Hall of Famer
Phaidra Knight, in partnership with The Powell Companies Real LLC, also based in New York City. Upon its launch, PSK's line of activewear was sold in big-box retailers such as Target, JCPenney and Macy's and is still sold at Walmart.
Kohl's signed PSK as a vendor in October 2020 and launched an assortment of its products on Kohls.com in April 2021. At the time, it was one of the only Black, woman-owned brands sold at Kohl's, according to the complaint. Following the brand's e-commerce success, Kohl's launched it in stores in December 2021, according to the complaint.
PSK was added to Kohl's brand assortment at a time when the retailer was leaning heavily into active and casual wear -- an attempt to keep up with
changing consumer habits during and coming out of the COVID-19 pandemic.
To keep up with the volume of purchase orders from Kohl's, PSK claims it borrowed money and invested heavily in inventory, staff, marketing and manufacturing, and turned down other business opportunities. The company says it purchased more than 600,00 units from factories and vendors to fulfill Kohl’s orders.
When Kohl's was notified of its missed payments, it responded with "a myriad of excuses," including internal logistical and record-keeping problems, the complaint alleges.
"Making things even more difficult was Kohl’s refusal to appoint a single executive to resolve the non-payment issue with PSK," the complaint says.
Kohl's did not dispute the bills of lading (shipping receipts) from PSK, nor did it express any dissatisfaction about the quality of the merchandise it received, according to the complaint.
"The lack of present intent is evidenced by Kohl’s bad-faith conduct in stringing (PSK) along with empty promises and never-ending excuses, with it ultimately refusing to pay
(PSK) approximately $8 million that was and remains owed under the fulfilled purchase orders," the complaint says.
