Less Than Jake: Chicago Boutique Owners Finally Get Called Out on Refusing To Pay Suppliers.

July 17, 2009 • Breaking News


Yikes! The cat is out of the bag for owners of Chicago boutique Jake, and many are now saying (us included) that it has been a long time coming. Owners Jim Wetzel and Lance Lawson started the Chicago luxury boutique five years ago, naming it after the heart throb from eighties cult flick "Sixteen Candles". The philosophy behind the store was to feature high-end apparel and accessories from up and coming designers as a chance to publicize and market new lines. Jake wanted to become known as a specialty store, which would take more risks and feature a wider selection than most department stores. The boutique quickly gained a reputation within the circle of luxury designers as a hottest young retailers in the Midwest. Jake featured some of the premiere collections of Tim Hamilton, Brian Reyes, and stiletto guru Nicholas Kirkwood. It was lauded for its finely tuned collection of emerging labels and well known names like Band of Outsiders, Philip Lim, Patrik Ervell, and Opening Ceremony. Owners Wetzel and Lawson seemingly took the time to foster relationships with the young designers they showcased, like Doo-Ri Chung of her eponymous line Doo.Ri, who later reserved front row seats for the two men at all of her runway shows.

Jake was the first store to buy Tim Hamilton's line; now they refuse to pay him.

But now, it seems, those days are gone. The New York Times has just exposed the ugly truth behind Jake's owners and the way they have been conducting business. Many designers that have worked with the store for years have now claimed they have been delivering orders to the Chicago boutique for the past several seasons without getting paid. Designer Brian Reyes, a loyal supplier, had enjoyed the exposure he was getting through specialty stores like Jake, and was initially sympathetic once the recession set in and the smaller businesses began to get hit the hardest. Reyes lost all sympathy, however, when Wetzel and Lance stopped issuing the designer a paycheck (or at least one that cleared). After tallying up the thousands the owners owed him with no apparent intention of paying, Reyes refused to deliver anymore clothes to the shop. Doo Ri Chung suffered a similar fate who, at first, did not want to admit that she was being manipulated. “You kind of feel this familiarity with people who supported
you for so long,” Chung said. “When they have cash-flow issues, you
want to make sure you are there for them as well.” The designer continued to deliver order to the store over four seasons in 2007 and 2008, a move she now says was " a misjudgement." Now that she is owed more than $60,000 from the store owners, they have stopped returning her phone calls.

Designer Doo-Ri Chung

Emma Fletcher, the designer behind vintage line Lyell, is astounded at the audacity that Wetzel and Lawson have begun to show to their suppliers of who they used to take such good care. Fletcher explained that last fall the store had placed a $10,000 order, which she was happy and excited to put through. When Fletcher's bank declared that the store was not credit-worthy she requested for payment in cash. Instead, Jake wrote a check for the full amount, but it was drawn on an account
that was frozen. When Fletcher called Mr. Lawson to ask
him to return the clothes, she was told the matter was out of his hands. So in essence, they stole the clothes. “The economy was slipping so fast, and everybody else was so cool,”
Fletcher recalls. “But they were just unprofessional and mean.” How is this corrupt method of business acceptable? And, perhaps more importantly, how long has it been going on? As more and more designers emerge to say that they have been refused payment from Wetzel and Lawson, it seems that this is not a new development.

With the recession threatening all ends of the fashion industry, many other independent boutiques or specialty stores have been forced to close their doors due to lack of sales. Jake is mysteriously hanging on for now and the reason why may be due to its negligence in coughing up the appropriate funds for its suppliers.
To make matters worse, instead of owning up to the severity of their financial troubles and attempting to find a resolution, Wetzel and Lawson have apparently been skirting the issue entirely, claiming the lack of payment was due to "credit issues" with their bank. It was later learned that the bank had begun a foreclosure on the business and that its assets had been acquired by a third-party investment company. When Chung and Fletcher confronted Lawson and Wetzel about that, they claimed former owner of the company, Price Allen Inc., had gone out of business and that they were currently operating under a new owner, Jake Retail Group. They also stated that, as a result of the turnover, they were not responsible for any other old Price Allen Inc. debts. Lawson said he was "powerless to direct payments or make decisions about inventory."

Lawson, left, and Wetzel inside Jake

The designers affected by this corrupt and unprofessional ploy are understandably frustrated by the lack of payment and the lack of professionalism. Fletcher fell behind on her bills due to the shipping and production costs of the unpaid Jake shipment. Tim Hamilton is still waiting to be paid for three seasons of deliveries, and designers behind labels like Lutz & Patmos and Costello Tagliapietra are sharing grievances as well. But beyond that, they are even more upset by the manner in which the owners have been behaving. It's as if Wetzel and Lawson feel their glorified stealing from designers is justified by the fact that they assisted them in becoming successful. They are convinced they are helping the vulnerable unknown names in fashion by giving them a platform to stand on. What the reality of the situation translates to is that they are taking advantage of the status of both young and naive designers who are being obviously manipulated out of their shares, and the established, well known designers with whom they had previously built a relationship of trust. Chung admitted, “I feel awful, because I vouched for these people to other
designers. We had no idea how many people were affected by this one
tiny store.”

Fletcher's store Lyell was forced to take a summer break due to her lack of funds

Actually we at Second City Style think this behavior has been going on a lot longer. We were clued in to the shifty tactics of Jim and Lance roughly three years ago. We had also heard about their refusal to pay for inventory and treating some designers rudely. More recent clues of trouble has been the quick closing of their Southport store last year and the watered down and cheaper inventory they now carry. When we were sent notice from their affiliate company that they were kicked out of the program for non-payment about 6 months ago, we knew things were really bad. So does this come as a surprise? No. But we are shocked this all came to a head in the New York Times!

Since their old business has failed, both Wetzel and Lawson are personally liable for
$1 million in debts and a separate federal tax lien of over $260,000
was already filed in March. The two men claim that under the new
ownership they will attempt to make the new Jake a much more profitable
business, reminiscent of their earlier times. But between a watered down
current selection of lower priced products, and a probable permanent
status of hostility with most of their best-selling designers, we're
not holding our breath that the boutique will survive. Nor do we expect to see them in the front row at Fashion Week any longer.

Article and Photo Source: The New York Times

-Alia Rajput

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