Digital Brands Group Inc. (NASDAQ:DBGI) is down 28% in a week after the company announced a definitive agreement to purchase ocean-inspired lifestyle women’s wear brand, Sundry. The company expects to complete the transaction in late 1H 2022upon meeting necessary closing terms and financing.
Trading Data
On Thursday, DBGI stock fell 1.50% to $1.31 with more than 7.97 million shares, compared to its average volume of 2.89 million shares. The stock has moved within a range of $1.2500 – 1.7400 after opening trade at $1.66.
DBGI Announces Definitive Agreement to Acquire Sundry
Notably, the acquisition will create a considerable scale for the company in revenue and cash flow because of leveraging shared marketing and operations expenses. Most importantly, the acquisition will drive more customer demand and brand awareness, fueling brand growth.
The omnichannel women’s wear brand established in 2011 offers an assortment of clothing for women, including sweaters, shirts, dresses, skirts, shirts, and athleisure bottoms, among others. For the entire fiscal 202o Sundry generated revenue of $19.9 million and net income of $3.7 million. Also, for the first nine months of last year, the company generated revenue of $18.2 million and net income of $2.7 million representing annualized growth of 37.9% and 11.7%, respectively. Therefore DBGI is worth watching.
Key Quote
“We believe the Sundry acquisition is a transformative acquisition for Digital Brands Group. In the short term, this acquisition is expected to immediately create significant scale in revenues and internal cash flow for marketing and talent growth. In the long term, we believe this acquisition should drive more brand awareness and customer demand, which in turn should fuel our future growth across our platform, brands and customers,” said Hil Davis, Chief Executive Officer of DBG.
Technical Data
DBGI stock is trading below the 50-Day and 200-Day Moving averages of $1.98 and $2.55 respectively. Moreover, the stock is trading below the 200-Day moving average of $3.33.
