Baton Rouge-based Woolly Threads, the sweater startup that began in 2015 and now sells its vintage comfy-wear nationwide, is suing the Pennsylvania company that manufactures and distributes several of its licensed products for breach of contract.
In a suit filed in mid-September in U.S. District Court for the Middle District, Woolly alleges that Neu Retail, which has had an agreement to manufacture and distribute Woolly products since March 2017, has not paid the company nearly $31,000 it says it’s owed.
The suit also claims Neu has breached an agreement not to sell certain Woolly products for less than $24, as well as an obligation to refrain from selling certain products the two companies developed jointly.
Woolly Threads owners declined to comment on the suit, and Neu officials did not return a call seeking a response.
Neu’s attorneys have not yet filed their answer to the allegations in court.
But the suit indicates Neu has its own grievances with Woolly Threads. In the suit, its attorneys make reference to a threatened counterclaim Neu sent Woolly Threads “alleging that Woolly is liable to Neu for amounts in excess of $2.9 million due to Woolly’s breach of the alleged implied covenant of good faith and fair dealing.”
The court documents do not explain why Woolly Threads would owe Neu more than $2.9 million or what it did to allegedly breach its covenant of good faith and fair dealing.
No hearing date has been set in the case. But Woolly Threads is seeking nearly $31,000 in minimum royalty payments plus interest in the amount of 1.5% per month, unspecified damages and other royalties.
Woolly Threads was founded in 2015 by Natalie John and Mason Dupre. In the years since, the company has expanded and moved twice, most recently to Government Street in Mid City. Its 2016 revenues, the last year for which figures were reported, were projected to top $6 million.
