DALLAS — Read this story and more North Texas business news from our partners at the Dallas Business Journal
A California-headquartered medical scrubs company is closing its Dallas facilities and cutting 404 jobs effective May 31.
Careismatic Brands Inc. informed the state of plans to close its distribution centers at 35500 Lyndon B. Johnson Freeway and 4715 Mountain Creek Pkwy. in a May 2 Worker Adjustment and Retraining Notification letter.
In a statement to Dallas Business Journal, Careismatic Brands said it made "the difficult decision to wind down operations at our distribution centers facilities" as it works to "enhance our distribution model to better meet our business' needs." The company said it was grateful for its distribution center teams and was "taking steps to support them through this transition" while working "to ensure a seamless transition with minimal disruption to our customers." The company did not provide more details on what it was offering to impacted workers.
Workers will not have bumping rights, which is when more senior workers can replace junior workers instead of losing their jobs.
The medical apparel and school uniforms company filed for Chapter 11 bankruptcy protection in January and agreed to turn over control to its lenders in order to eliminate $833 million in debt, according to a Reuters report. Founded in 1995 as Strategic Partners Inc., Careismatic Brands makes up 50% of the U.S. medical apparel wholesale market, according to Reuters, and has several brands in its portfolio including Dickies, Cherokee and Healing Hands.
The company overextended itself to meet growing demand for scrubs during the Covid-19 pandemic and took on additional debt to boost sales to retail partners, according to court filings. The high debt became unmanageable as demand returned to normal, interest rates rose and emerging competitors ate into the organization’s market share by selling apparel to customers online. The company’s revenue fell from $687 million in 2021 to $559 million in 2023.
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