The brand management firm agreed to dismiss the lawsuit, with both parties indicating they would continue to partner up to offer “one-click” checkout capabilities to ABG’s Forever 21 and Lucky Brand labels. Additionally, ABG is evaluating the possibility of expanding Bolt’s technology to more portfolio brands in the coming months.
In the suit, initially filed in February, ABG claimed that Bolt cost Forever 21 as much as $150 million in lost sales, and alleged the checkout company “utterly failed to deliver on the technological capabilities that it held itself out as possessing, including the ability to seamlessly integrate Bolt’s products into brand partners’ websites.”
But a new joint statement from the companies has ABG founder, chairman and CEO Jamie Salter singing a different tune, giving glowing reviews to the “single sign-on” technology, which is designed to allow consumers to shop at different websites with a universal login account.
“ABG has always prided itself on working with best-in-class partners to build a sustainable and scalable business with a laser focus on digital innovation and e-commerce. That’s why we chose to work with Bolt to deploy its exceptional checkout technology to several of our portfolio brands,” Salter said in a statement. “ABG looks forward to deepening its ties with Bolt by becoming shareholders under the new leadership of Chief Executive Maju Kuruvilla and we are excited to continue exploring broader opportunities with our businesses.”
ABG’s new ownership stake has not been disclosed, but per the businesses’ October 2020 agreement, it initially could gain the option to exercise a warrant to purchase up to a 5 percent stake in Bolt. A Bloomberg report said ABG’s stake would be less than the 5 percent, but that the company was not required to pay to become a part owner.
The 2020 deal was initially contingent on the brand management firm’s ability to get $750 million in gross merchandise value (GMV) via Bolt’s technologies by October 2022.
This was a point of contention in the lawsuit, with ABG claiming that Bolt first indicated in September 2021 that the brand management firm was “making substantial progress” toward the $750 million goal via Forever 21 and Lucky Brand. But ABG alleges that Bolt “inexplicably and abruptly” changed its position to claim instead that its GMV contribution was zero.
In the suit, ABG said the total GMV contributions for Forever 21 and Lucky Brand amounted to approximately $290 million and $15 million, respectively.
On top of that, the complaint accused Bolt of false advertising and unjust enrichment, alleging that the company overstated the nature of its integrations with the company’s brands in an effort to make it seem like it had more customers than it actually did. ABG said that Bolt implied that Reebok—which the brand manager didn’t even own at the time—was one of the brands that would be using Bolt’s products.
But despite the suit’s claims that the fintech company once valued at $11 billion wasn’t living up to its billing, the firms seem to be mending their relationship. The joint statement even highlighted the improvements one of the brands has realized while using the checkout platform.
“Lucky Brand has seen a 40 percent year-over-year increase in revenue in their e-commerce channel and impressive lifts in conversion with checkout powered by Bolt,” said Greg Greiner, senior vice president of product at Bolt. “Our teams are energized by these wins and look forward to the prospect of continuing to power additional frictionless shopping journeys across the ABG portfolio.”
Executives on both sides shared their enthusiasm in the statement.
“We are a proud partner of ABG and have enjoyed powering one-click checkout for Forever 21 and Lucky Brand. ABG’s commitment to continuing its partnership with Bolt is a testament to their long-term vision of digital innovation and their ethos of identifying best-in-class partners,” Kuruvilla said. “Today marks a new chapter in our partnership with ABG and I’ve never felt more confident—together the future is ours to win.”
“The e-commerce landscape continues to evolve rapidly and we are committed to working with the best and the brightest to optimize our loyal customer experiences,” said Adam Kronengold, chief digital officer of ABG. “ABG is excited to be a part of the next chapter of Bolt’s evolution and thrilled to partner and innovate for our customers.”
Going forward, ABG did not identify which of its other brands will use Bolt’s checkout tech, but it will want to avoid the problems Brooks Brothers encountered. The two-century-old luxury apparel brand was initially forced to abandon its integration with Bolt in June last year due to “persistent technical product defects” related to the checkout feature. Issues encountered with the Brooks Brothers website included user authentication, single sign-on, and buy now, pay later integrations with Klarna.
But now, Bolt may need to prove itself more than ever. The e-commerce checkout company laid off about 250 people, or one-third of staff, in May amid a major market selloff that has had an outsized impact in high-growth tech firms. The layoffs come despite the company’s $748 million raised in October 2021 and January 2022.
Bolt claims it has seen strong growth. In a May blog post, Kuruvilla said the company had 13.8 million total Bolt shopper accounts, a 131 percent year-over-year increase over the year prior. Additionally, the company’s 836 total active merchant accounts tallied an even larger 192 percent year-over-year jump.
Merchants see 47 percent higher rates of completion on Bolt checkout versus guest checkout, Kuruvilla said, with 63 percent of Bolt account holders more likely to repeat purchases compared to guest checkout.