Fourth Quarter Witnesses a Drop in Digital Brands Group's Revenue
Digital Brands Group Struggles with Financial Challenges Amidst Plans for Potential Restructuring
Digital Brands Group, a leading apparel company, has reported a decline in its financial performance for the fourth quarter of 2024. The company's quarterly revenue dropped by 15.8%, from $4 million to $3.4 million, and the net loss increased from $9.7 million to $15.8 million[1].
Operating expenses also rose significantly, increasing from $10.7 million to $13.8 million during the same period[1]. However, the company's gross margin for the year improved significantly, reaching 42.6%, compared to 24.6% the year before[1].
The decline in fourth-quarter sales was attributed to a decrease in advertising spend for the launch of the Bailey Shop and a lack of wholesale sales for the Bailey 44 brand[1]. Despite these challenges, Digital Brands Group expects to reach an internal free cash flow of $500,000 per month starting October[2].
The company, which owns the brands Stateside, Harper & Jones, DSTLD, Bailey 44, and Sundry, completed the acquisition of apparel brand Sundry in January[2]. This acquisition was considered a critical step in Digital Brands Group's path to achieving its initial goals[2].
Wholesale operations for Bailey 44 have now been restarted, and Digital Brands Group is currently evaluating the possibility of going private, following an approach by a private equity firm in March[1][2]. If the valuation doesn't change, the company plans to hire bankers to facilitate the process of going private[2].
In an effort to strengthen its financial position, Digital Brands Group recently completed a private investment in public equity (PIPE) financing, raising approximately $11.225 million by selling Series D Convertible Preferred Stock to select investors[3][4][5]. This transaction was finalized in early August 2025.
While there are no publicly disclosed intentions for Digital Brands Group to go private, the recent capital infusion could potentially enable strategic options for the company. The valuations for going private are currently low, according to Hil Davis, the company's CEO.
For the full year of 2024, Digital Brands Group's revenue increased by 84.2%, from $7.6 million to $14 million[1]. However, including impairment charges and interest expense, the net loss for the full year increased from $32.4 million to $38 million[1].
In its annual filing, Digital Brands Group showed that it is currently in technical default on at least two promissory notes with aggregate principal amounts worth millions of dollars[1].
[1] Digital Brands Group, Inc. Q4 2024 Earnings Release, 2025. [2] Digital Brands Group, Inc. Q1 2025 Earnings Release, 2025. [3] Digital Brands Group, Inc. Press Release: Digital Brands Group Completes PIPE Offering, August 2025. [4] Yahoo Finance, Digital Brands Group, Inc. Completes PIPE Offering, August 2025. [5] GlobeNewswire, Digital Brands Group, Inc. Completes PIPE Offering, August 2025.
- Digital Brands Group, aiming to bolster its financial position, recently completed a private investment in public equity (PIPE) financing, raising $11.225 million by selling Series D Convertible Preferred Stock to select investors.
- In an attempt to leverage artificial intelligence and improve its business strategies, Digital Brands Group is evaluating the possibility of integrating AI in its finance and investing divisions to optimize its business operations.
- To win the confidence of shareholders and secure a more sustainable financial future, Digital Brands Group's editorial team is working diligently to present a comprehensive business plan outlining strategies for profitability and growth, focusing on key areas like inventory management, advertising, and wholesale partnerships.
