Apparel Company Digital Brands Seeks Options - What's On The Cards?

Digital Brands Group Inc DBGI said its Board of Directors has unanimously decided to initiate a formal review to explore strategic alternatives.

The review, slated to begin immediately, will evaluate a broad range of options to maximize shareholder value.

"Given the continued dislocation between Digital Brand Group's public market value and the intrinsic value of Digital Brands Group's underlying assets, we believe an evaluation of strategic alternatives is a prudent approach to ensure we are maximizing value for our shareholders," said CEO Hil Davis.

Digital Brands has not set a deadline or definitive timetable for the completion of the process, and there can be no assurance that the process will result in any particular outcome.

In September, Digital Brands raised $5 million through equity offering. The proceeds are to be used for working capital purposes. 

In August, the company effected a 1-for-25 reverse stock split of its common stock. The company reported a 69.6% increase in Q2 FY23 revenue to $4.5 million, which excludes the revenue from the Harper & Jones spin-out and net earnings of $5.0 million or $0.38 per share.

Digital Brands offers apparel through numerous brands on both direct-to-consumer and wholesale basis.

Price Action: DBGI shares are trading higher by 18.31% at $5.17 on the last check Monday.