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Courtesy Photo Delta Galil
“Organic Basics is a digital brand with sustainability and ethical production at its core and these values align perfectly with Delta Galil’s focus on creating a more sustainable fashion industry through innovation,” Isaac Dabah, chief executive officer of Delta Galil Industries, said in a statement. “We see a significant opportunity to grow the Organic Basics brand globally, particularly in the U.S. and [in] Europe and to expand the product line to include items for the whole family. Our goal is to sell affordable, sustainable, organic product direct to the consumer.”
The benefits of the acquisition are meant to be twofold: the added funds will help Organic Basics — which was founded online in 2015 — grow internationally, while expanding the brand’s assortment to include apparel for children and babies. It’s also the latest in a string of acquisitions and licensing deals made by Delta Galil in recent years, helping strengthen the firm’s position in the global innerwear market, both on and offline.
In November, Delta Galil — which counts Seven For All Mankind, Splendid, Bare Necessities, Schiesser, Eminence, Delta, P.J. Salvage, Karen Neuburger, Nearly Nude and Fix in its portfolio of brands — signed a long-term global licensing agreement with Polo Ralph Lauren for women’s intimates and sleepwear. The partnership came on the back of two additional, separate. licensing agreements — one with Adidas, and the other with Italian innerwear brand Wolford — both of which were announced just days apart in June 2021.
In addition, Delta Galil purchased lingerie start-up Brayola in January 2020 for more than $1 million. That year in August, Delta Galil acquired lingerie and swimwear e-tailer Bare Necessities for an undisclosed amount.
“This transaction reflects our strategic growth objective to diversify our distribution channels,” Dabah said at the time.
Courtesy Photo Delta Galil
The manufacturer declined to comment on the financial terms of the Organic Basics deal. But the arrangement allows Delta Galil to play off the brand’s digital expertise as well as its sustainable ethos. The men’s and women’s innerwear business is a certified B Corp. It is also Global Organic Textile Standard-certified and uses more than 75 percent plant-based manufacturing materials.
“The brand has built a strong reputation and following for its use of responsibly, ethically sourced and certified materials, including organic cotton and natural dyes, and its commitment to minimizing its carbon footprint and impact on the planet,” according to Delta Galil.
So far the investments seem to be paying off. Both revenues and profits rose in the most recent quarter, despite continued supply chain issues and macro inflationary pressures. But investors seem unconvinced. Despite the acquisition news, shares of Delta Galil closed down 8.62 percent Tuesday.