Santa Monica, Calif.-based scrub and medical fashion maker Care-Ismatic Brands Inc. is closing the doors of its Dallas distribution center and shutting down the process, according to a layoff notice filed with the Texas Labor Commission. The company plans to lay off 404 employees.
The distribution centers located at 35500 Lyndon B. Johnson Freeway and 4715 Mountain Creek Parkway will close on May 31st.
Careismatic Brands did not respond to an interview request from. dallas morning news At the time of publication.
The California company opened a 1 million-square-foot building at 35550 LBJ Freeway in early 2023. The new facility was supposed to be a major step forward for the company, as it was an attempt to “rebuild.” [its] Culture and reset [its] ” Careismatic COO Sidharth Lakhani said in a February 2023 statement.
Care is Matic is still reeling from filing for Chapter 11 bankruptcy protection on January 22nd. According to Reuters, the company has agreed to hand over the keys to the company to its lenders to resolve an $833 million loan. According to court documents from the time, Care Ismatic took on new debt to increase sales and meet high demand for medical apparel during the COVID-19 pandemic. ”.
The company entered bankruptcy court with about $23 million in cash because interest rates made it unsustainable. Additionally, the company's focus on brick-and-mortar stores became less important as the pandemic subsided and demand for medical apparel leveled off as competitors focused on online sales rather than brick-and-mortar stores.
The company's top lenders had $690 million in debt when it filed for bankruptcy, and they now own Care Ismatic. However, another group of lenders still owed $110 million and received warrants to buy some of its shares.
Careismatic, owned by private equity firm Partners Group, accounts for about half of the U.S. medical apparel wholesale market despite a $128 million decline in revenue between 2021 and 2023. The company still owns well-known brands such as Cherokee, Dickies, and Scrubster.
