How Lever Style chairman Stanley Szeto has learned from past mistakes and bases his success on listening to the right people
First published by the South China Morning Post on 15 July 2021. Click here to view.
As a frequent guest on business news shows, Stanley Szeto, executive chairman of apparel supply chain manager Lever Style, always seems to have the right answer. He looks at ease in front of the camera and smiles confidently before the interviewer has finished asking a question, as if he already has the response down pat.
His confidence is not without justification. Since taking over the family business in 2000 at only 25 years old, Szeto has transformed it from a struggling shirt maker into an agile “apparel engine for digital retail”, as the company’s website reads today. Lever Style has also been listed on the Hong Kong stock exchange since 2019.
Learning that the company was not in good shape marked a turning point in Szeto’s life 21 years ago.
“I do remember one evening, my dad sat me down in our apartment and he said, ‘Son, our family business is going to go bankrupt pretty soon – maybe three, six months – just be mentally prepared for it’,” Szeto says.
“Maybe it was out of a little bit of youthful arrogance [that] I told my father, ‘Why don’t you let me give it a shot, but then please retire’.”
The origins of Lever Style date back to 1956, when Stanley Szeto’s grandfather, Richard Szeto, founded a shirt-making business at a time when Hong Kong was at the top of its game as a manufacturing centre for consumer goods.
But over the decades that followed, the city’s economy and the fashion industry would both witness sea changes. By the turn of the millennium, Lever Style was struggling to adapt. Although Stanley Szeto has always looked up to his father, Bernard Szeto, he had different ideas as to how the business should go forward.
“I didn't tell him the reason [for asking him to retire], but I knew he and I wouldn't be able to work together because he and I do things very differently,” he says. “To his credit, he retired right away, and we somehow got lucky and we survived.”
More than just luck, it is Stanley Szeto’s drive and competitiveness that have helped him attain success. He has been a natural achiever since childhood, when he became a Hong Kong record holder in elementary school swimming. He grew up to graduate with magna cum laude honours from the Wharton School of the University of Pennsylvania, an Ivy League university in the US, with a triple major in finance, entrepreneurial management and legal studies.
After finishing his studies, he took on roles at notable financial outfits such as Prudential Asset Management and JP Morgan before his fateful decision in 2000.
However, the sportsman and businessman has since worked to overcome a few bumps along his career path.
In 2010, Szeto wanted to steer Lever Style towards what he calls an “asset-light” strategy, with a platform business model where the company would take orders from buyers and then outsource the manufacturing to factory partners in the region. His idea was to leverage the capabilities of various external facilities to spread the risks while making the overall operation more agile.
Early attempts at implementing the strategy proved to be a painful experience. “We didn’t know what we were doing. Managing external factories is very different from managing our own,” Szeto says.
“We outsourced the production of an order from our largest client at the time to a factory in Vietnam, and it was basically two months late in delivering. We lost the client.”
The company even had to resolve a news-making worker strike as it moved to close and downsize its own factories as part of the strategy.
“The workers also picketed our clients’ stores. It was a stressful two months when I couldn’t sleep, or would wake up from a bad dream,” Szeto recalls. “But throughout the years, we have learned that somehow, things will work out. [The team] would definitely feel the stress and pressure, but we would not panic.”
“And actually, the more stress I am under, the clearer I think. It’s a bit like Michael Jordan’s buzzer-beating shots, when everything is in slow motion.”
Not one to give up easily, Szeto decided the problem wasn’t in the strategy itself, but rather in its execution, and continued to charge ahead with the asset-light approach.
“Eventually, we did well enough to expand the outsourcing part. We figured it out and learned how to do it, and we stopped suffering from any more quality or delivery problems after that,” he says.
The solution was simple: make Lever Style an important client that manufacturers could not afford to lose. Today, the company manages the supply chains of premium brands such as Hugo Boss, Paul Smith and Theory.
“We work with about 50 factories today. [Considering] the quality of the delivery matrix, all those KPIs [key performance indicators], we’re doing just as well as when we were running our own factories,” Szeto explains.
And while many businesses were thrown into disarray by the Covid-19 pandemic, Szeto turned crisis into opportunity. Over the past year, Lever Style has acquired four apparel companies with specialities ranging from denim to knitwear, in order to expand its capacity to cope with the market’s changing demands.
“These opportunities wouldn’t be so readily available if there wasn’t Covid. We’re quite good at synthesising what’s happening in the outside world and outside the industry,” he says.
“Nobody has a crystal ball, and you never know when the decisions you make are the correct ones. But you just have faith and you analyse things calmly, and you give yourself the highest chance of success.”
As the father of 16-year-old twin boys, Sean and Darren, Szeto hopes to instil in his children a principle he has learned through his experiences: “What you put in is what you get out of life. Whatever the situation, just try to optimise it and make the best out of it, and know you have no regrets.”