Latest news with #IGDesignGroup
Daily Mail
5 days ago
- Business
- Daily Mail
Joann bankruptcy takes down another company with 1,400 jobs at risk
The collapse of beloved crafts store Joann has pushed one of its major suppliers into bankruptcy. The gift-wrap maker Design Group Americas (DGA) filed for bankruptcy on Sunday after tariff uncertainty and a pullback in consumer spending pushed it close to the edge. The bankruptcy of its major customer Joann then crippled the vulnerable business, the company said in filings made to the U.S. Bankruptcy Court in Houston. DGA said it had been worn down by a tough economic climate for years, as American consumers cut back spending on discretionary items such as ribbons and wrapping paper in response to the rising cost of essentials. The crafts supplier has around $106 million in unsecured debts, court documents show. The company said it plans to sell its assets, including its wrapping paper and sewing-related businesses, as a going concern but wind down its ribbon manufacturing. In January, Joann filed its second bankruptcy in less than a year and shut all of its stores. Orders from Joann made up around $27.4 million — or 5 percent — of DGA's revenue last year. The bankruptcy puts DGA's more than 1,400 employees across North America, India, Hong Kong, China, the UK, and Australia at risk of losing their jobs. DGA said the uncertainty of President Trump's whipsawing tariff policies made it difficult to predict import costs. This hit its profit margins, as the business relied on importing materials from a range of international markets. DGA's parent company, IG Design Group, which is based in the UK, sold its stake to financial services firm Hilco Global in May as part of restructuring efforts. Hilco has in turn agreed to finance the bankruptcy process with $53 million. Joann, which operated around 800 stores in almost every state, refused to close stores and consolidate after its first bankruptcy filing last March. The blunder plunged them further into the red, ending in more than $600 million of debt by January. 'You must reject leases from unprofitable locations and downsize. They didn't, and now they are going to liquidate,' John Bringardner, Head of Debtwire, told at the time. Joann is among a host of retailers to face headwinds after experiencing a pandemic-era sales boom. Stuck-at-home Americans bought craft supplies to indulge new or old hobbies in their increased free time. However, in the years that followed, the surge in home crafting declined and Joann bled revenue. Home organization specialist The Container Store suffered the same fate, filing for bankruptcy in December.
Daily Mail
6 days ago
- Business
- Daily Mail
Joann bankruptcy claims next victim as another company out of business and 1,400 jobs at risk
The collapse of beloved crafts store Joann has pushed one of its major suppliers into bankruptcy. The gift-wrap maker Design Group Americas (DGA) filed for bankruptcy on Sunday after tariff uncertainty and a pullback in consumer spending pushed it close to the edge. The bankruptcy of its major customer Joann then crippled the vulnerable business, the company said in filings made to the US Bankruptcy Court in Houston. DGA said it had been worn down by a tough economic climate for years, as American consumers have cut back spending on discretionary items such as ribbons and wrapping paper in response to the rising cost of essentials. The crafts supplier has around $106 million in unsecured debts, court documents show. The company said it plans to sell its assets, including its wrapping paper and sewing-related businesses, as a going concern but wind down its ribbon manufacturing. In January Joann filed its second bankruptcy in less than a year and shut all of its stores. Orders from Joann made up around $27.4 million, or 5 percent, of DGA's revenue last year. The bankruptcy puts DGA's more than 1,400 employees across North America, India, Honk Kong, China, the UK and Australia at risk of losing their jobs. DGA said the uncertainty of President Trump's whipsawing tariff policies made it hard to predict import costs. This hit its profit margins as the business relied on importing materials from a range of international markets. DGA's parent company, IG Design Group, which is based in the UK, sold its stake to financial services firm Hilco Global in May as part of restructuring efforts. Hilco has in turn agreed to finance the bankruptcy process with $53 million. Joann, which operated around 800 stores in almost every state, refused to close stores and consolidate after its first bankruptcy filing last March. The blunder plunged them further in to the red, ending in more than $600 million of debt by January. 'You must reject leases from unprofitable locations and downsize. They didn't, and now they are going to liquidate,' John Bringardner, Head of Debtwire, told at the time. Joann has closed its more than 800 stores following bankruptcy Joann's shoppers mourned the loss of the 'happy place' following its bankruptcy Joann is among a host of retailers to face headwinds after experiencing a pandemic-era sales boom. Stuck at home Americans bought craft supplies to indulge new or old hobbies in their increased free time. However, in the years that followed, the surge in home crafting declined and Joann bled revenue. Home organization specialist The Container Store suffered the same fate, filing for bankruptcy in December.
Yahoo
7 days ago
- Business
- Yahoo
Joann supplier going out of business
This story was originally published on Retail Dive. To receive daily news and insights, subscribe to our free daily Retail Dive newsletter. Citing Joann's downfall and U.S. tariffs, Design Group Americas filed for Chapter 11 protection Thursday and will wind down. Parent IG Design Group sold the business in May to Hilco Capital Group for $1, and IG's non-U.S. affiliates are not part of the bankruptcy. The company, whose portfolio includes sewing pattern names like McCall's, Simplicity, Vogue and Butterick, as well as party supply, crafting and home decor brands, said it has an agreement for about $53 million in debtor-in-possession financing from a Hilco affiliate. Design Group Americas will put many of its brands up for sale while 'winding down its domestically manufactured woven ribbon products business and supporting assets,' per the company's press release. For a lot of people who picked up sewing or crafting during the pandemic, their project is barely noticeable in the rear-view mirror — a major reason that Joann itself failed to revive its fortunes following its March 2024 bankruptcy. In January, Joann filed under Chapter 11 for the second time in less than a year, this time in order to go out of business. Last month rival craft store Michaels snapped up Joann's IP and has boosted its fabric arts assortment. But Joann's disappearance is nevertheless having consequences downstream: in court documents, DGA cites 'macroeconomic challenges, coupled with specific setbacks such as the bankruptcy and liquidation of one of the Debtors' major customers, Jo-Ann Stores, LLC,' as having 'severely impacted [its] sales performance and revenue.' Trade tariffs imposed this year also 'increased operational costs, affected pricing strategies, and contributed to reduced customer orders,' the company said. Before its sale to Hilco, DGA was the IG Design Group's U.S. operation, with some supporting operations also based in India, Hong Kong, China, the U.K., Mexico and Australia. For the financial year ended March 31, 2024, DGA reported audited revenue of $500.3 million and an operating profit before tax of $4.9 million. As of Sept. 30, 2024, DGA had un-audited net assets of $245.4 million, including intangibles and deferred tax assets of $94 million. At the time of the sale, IG Design Group Chair Stewart Gilliland said the company had 'worked tirelessly over a number of years to rebuild DG Americas into a more profitable and sustainable part of the Group' but that 'numerous external factors,' including shrinking demand for the category, impeded its progress. 'Compounding this, in light of recent events in North America and the evolving tariff situation, it has become clear that the headwinds facing the division are untenable,' he also said, adding that offloading the U.S. business was necessary to protect the overall company. Last week, DGA said it had $8.2 million or so of accessible cash-on-hand, which wasn't enough by itself to support its sale and wind-down. The company's portfolio boasts more than 50 product categories and brands, including some over a century old. Recommended Reading KidKraft files for Chapter 11 bankruptcy
Associated Press
04-07-2025
- Business
- Associated Press
Design Group Americas Voluntarily Files for Chapter 11 Protection, Initiates Sale Process Aimed at Maximizing Value Through Going Concern Transactions
BERWICK, Pa.--(BUSINESS WIRE)--Jul 3, 2025-- IG Design Group Americas, Inc. and its domestic subsidiaries (collectively, 'DGA' or the 'Company'), a design, manufacturing, sourcing, and distribution company of branded and private label consumer products, announced today that it has voluntarily filed for chapter 11 relief in the United States Bankruptcy Court for the Southern District of Texas (the 'Court') to facilitate a court-supervised marketing and sale process pursuant to section 363 of the Bankruptcy Code. The Company intends to pursue a value maximization strategy by engaging with buyers who are interested in purchasing certain of the Company's business segments as a going concern, while concurrently winding down its domestically manufactured woven ribbon products business and supporting assets. DGA includes over 50 product categories and brands, some of which were established over a century ago. Like many companies in the consumer products sector, DGA has been navigating a challenging operating landscape for several years, compounded by the loss of a major customer, who entered liquidation and significantly impacted DGA's revenue as well as new trade tariffs imposed in 2025 that increased operational costs, affected pricing strategies, and contributed to reduced customer orders. The Company's decision to pursue an in-court process was driven by liquidity constraints, substantial working capital requirements, and the seasonal nature of significant portions of its business. 'Following DGA's sale to an affiliate of Hilco Capital Group, we have worked diligently with our advisors to evaluate the optimal path forward for the business,' said Sue Buchta, Chief Executive Officer of DGA. 'We enter the court-supervised sale process in dialogue with multiple interested parties for certain of our business segments as a going concern and intend to leverage chapter 11 to maximize the value of our assets. We thank our employees, customers, and partners for their support and will work diligently to minimize any potential impact during the process.' Additional Information about the Court-Supervised Process DGA has secured an agreement for approximately $53 million in committed debtor-in-possession ('DIP') financing from an affiliate of Hilco to support its value maximizing strategy throughout its Chapter 11 cases, subject to Court approval. Additionally, to uphold its commitments to its stakeholders, DGA has filed several customary 'first day' motions. These motions, upon approval by the Court, will provide authorization for the continued payment of employee wages and benefits arising under programs that were in effect as of the petition date, the maintenance of certain customer programs, payments to certain critical vendors for prepetition amounts owed, payment to vendors for amounts owed on post-petition goods and services delivered to the Company, and other relief measures standard in these circumstances. DGA's non-U.S. affiliates are not part of the chapter 11 cases and will continue to operate while the Company considers the impact of asset sales and the optimal plan to maximize the value of the interests it holds in those subsidiaries. Additional information is available at Stakeholders with questions may call the Company's claims agent Kroll, toll-free at (877) 307-2977 (U.S. and Canada) or (646) 290-6127 (International), or email at [email protected]. Advisors Latham & Watkins LLP is serving as legal counsel, Huron Consulting Group LLC is serving as financial advisor and investment banker, and C Street Advisory Group is serving as strategic communications advisor to DGA. About DGA Design Group Americas (DGA) is a diverse group of companies operating across multiple regions, categories, seasons, and brands. The company employs over 1,400 people and works with customers in the US and around the world, with offices and operations in the United States, UK, Australia and Asia. DGA products are found in over 100,000 retail outlets internationally, with products reaching millions of consumers of all ages. Design Group Americas creates, designs, and manufactures products that help the world celebrate life's special occasions. They are proud to serve the best retailers around the globe with a complete end-to-end service from design to distribution. Design Group America's products are found within six core categories: Gift packaging: DGA is one of the world's largest producer of celebrations products, including gift wrap, gift bags, ribbons & bows Party: Party-ware, balloons and accessories Ribbon: Craft, décor, ribbon for branded or floral business Craft: Craft and creative play products that empower consumers of all ages to express themselves, learn new skills, as well as create individual looks, unique gifts and keepsake items Stationery: Wide range of stationery products for consumers of all ages, for use in education, commercial, and home settings including both standard and fashion ranges Homeware/Décor: Seasonal and everyday décor such as florals, holiday signs, tabletop décor and ornaments View source version on CONTACT: Media [email protected] KEYWORD: UNITED STATES NORTH AMERICA PENNSYLVANIA INDUSTRY KEYWORD: RETAIL OTHER RETAIL HOME GOODS MANUFACTURING SPECIALTY OTHER MANUFACTURING OFFICE PRODUCTS SOURCE: IG Design Group Americas, Inc. Copyright Business Wire 2025. PUB: 07/03/2025 07:26 PM/DISC: 07/03/2025 07:26 PM
Yahoo
21-06-2025
- Business
- Yahoo
Is this penny stock on track for an explosive recovery in 2025?
Penny stocks have a well-earned reputation for being volatile. But these tiny businesses are also capable of potentially delivering explosive gains. And investors who snapped up shares in IG Design Group (LSE:IGR) a month ago are already experiencing some of this first-hand. The gift and celebration packaging company has just kicked off a turnaround strategy that's started yielding some positive results. This has helped repark some fresh investor sentiment, sending the share price up more than 40% in the last month alone, with a 34% gain in a single day at the end of May. Despite this surge, the IG Design share price is still trading significantly lower compared to a year ago. That means there's still a long way to go for the business to complete its recovery. Yet, if analyst forecasts are correct, that could soon change. A big part of renewed investor sentiment is management's decision to exit DG America's business. Despite generating close to $500m in revenue, the segment has struggled to deliver a profit. And with US tariffs only adding more pressure, leadership concluded that the 'headwinds facing the division are untenable'. The decision to dispose of problematic DG America was met with praise from investors. Why? Because the company's now significantly reduced its exposure to the weaker US retail market environment that it's struggled to navigate. At the same time, IG Design has just freed up a lot more capital to reinvest in stronger areas, refocusing the business into more profitable ventures. Subsequently, profit margins and free cash flow generation are expected to rise. And institutional analysts have revised their earnings per share forecasts for 2026 to reach $0.43 versus the $0.16 achieved in 2024 – a 170% improvement. Obviously, there's no guarantee that this target will be hit since we're still in the early stages of its turnaround plan. But if it does get things back on track, the team at Research Tree think the penny stock could skyrocket by 120% to 198p by this time next year! No investment's ever risk-free, and that's especially true for IG Design Group. Despite being the source of many of its problems, DG America was also responsible for around half of its revenue stream. The company's now dependent predominantly on the UK, European, and Australian markets, which have their own fair share of challenges. A big source of renewed investor sentiment is IG Design's ability to rebuild its scale at a higher margin in these markets. But a failure of execution could douse the flames of optimism and send the penny stock tumbling back down in the wrong direction. Even if management makes all the right moves, there's still the consumer spending cycle that can throw a spanner in the works. IG Design's product portfolio consists entirely of discretionary items which aren't likely to be in high demand if economic conditions take a turn for the worse – something that's completely out of management's control. All things considered, I'm cautiously optimistic and think investors comfortable with high-risk, high-reward ventures may want to consider taking a closer look. The post Is this penny stock on track for an explosive recovery in 2025? appeared first on The Motley Fool UK. More reading 5 Stocks For Trying To Build Wealth After 50 One Top Growth Stock from the Motley Fool Zaven Boyrazian has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors. Motley Fool UK 2025 Sign in to access your portfolio
