In an amended complaint filed last month in a U.S. District Court in the Southern District of New York, Authentic Brands Group claimed that Bolt Financial did not deliver on its expected technological capabilities.
According to ABG, Bolt failed to integrate its payment solutions seamlessly into retail and brand websites in what ABG deemed a reasonable amount of time.
ABG has also accused Bolt of embellishing the partnership to raise additional capital.
At this time, Bolt Financial has denied all allegations.
“We are committed to providing all of our customers with a great product, and we are thankful for our wonderful partnership with Forever 21 and Lucky Brand, which continues to be strong,” said Bolt CEO Maju Kuruvilla in a statement.
Today, Authentic Brands Group owns over 30 retail brands, including J.C. Penney, Barneys New York, Reebok, and David Beckham’s global brand. ABG also claims part ownership in SPARC Group Holdings II LLC with Simon Property Group, which licenses and operates brands like Forever 21, Brooks Brothers, Aéropostale, Nautica, and Lucky Brand.
As part of the partnership, which originated in October 2020, the duo had planned to deliver a checkout and customer loyalty platform called “AllPass” by January 15, 2021. Under the terms of the partnership, the two parties agreed that if ABG were to hit $750 million in eCommerce sales due to Bolt’s technology within two years, ABG would have the opportunity to buy up to 5% of Bolt’s equity, which roughly equates to about $500 million.
According to the filed complaint, Bolt’s checkout solution has so far only been activated on Brooks Brothers and Forever 21’s websites due to significant technical problems.
The Brooks Brothers integration alone experienced so many technical glitches that it was temporarily halted in June 2021. And when it came to its integration with Forever 21, Bolt’s failed integration allegedly caused a “material diminution in gross sales” exceeding $150 million.
Bolt has since requested to have the complaint dismissed, indicating that the lawsuit is simply a “transparent attempt” to have the court rewrite the deal between Authentic Brands Group and Bolt Financial.