Digital Brands Group Inc (NASDAQ: DBGI) posted revenues of $408,000 (down 84.07% YoY) in Q1 2021. The drop is on the backdrop of COVID-19 related delay in introducing Bailey 44 designer in fall 2020.
It reported a loss of $3 million in Q1 2021. Digital Brands’ CEO, Hil Davis, said the causes of decline in Q1 2021 revenues are limited inventory, limited cash, reduced market spending, and the impact of COVID-19 on its Bailey 44.
Davis further said the company would report better revenues in Q2 2021. It also expects to improved results in Q3 and Q4 2021.
The company commenced shipping its Bailey 44 product in mid-May 2021 to the wholesale stores. In addition, its inventory for DSTLD started arriving in late May 2021 at its warehouse.
Chalks out a sales strategy
Digital Brands chalked out advertising and marketing strategy such as Amazon’s marketing plan. The majority of its spending will start this fall.
Completes acquisition of Harper & Jones
Digital Brands completed the takeover of Harper & Jones besides raising $10 million through an IPO. Harper & Jones holds revenues of $903,000 at the end of Q1 2021.
The company issued 2.409 million common shares and warrants to acquire 2.771 million common shares at $4.15/share. Its underwriters also received a 45-day window to acquire additional 361,445 shares besides 361,445 warrants at IPO price after deducting commissions and underwriting discounts.
Its warrants and shares trade under the tickers – DBGIW and DBGI on NASDAQ. The exercise price of each warrant is $4.57/share within a window of five years.
Digital Brands appointed Kingswood Capital Markets as the sole book-running manager for this offering.
Signs a non-binding LOI
Digital Brands signed an LOI to clinch Stateside. The company would use the proceeds of the IPO to pay for this deal.
The company has adopted a digital-first policy.
It eliminates operational and administrative responsibilities for its brands. Instead, it creates innovation and creativity in its products for improved experience to its consumers.
This strategy helps to promote brand longevity and emotional connectivity with consumers.
Digital Brands plans to build a line of additional 5 to 10 lifestyle brands to generate annual revenues of $50 to $100 million from each brand.
Its stock trades at $5.62 in the pre-market hours on July 1, 2021.