Hawaii-based Crazy Shirts Inc., which has about 100 people in Tustin, has been sniffing around for a life preserver,and found one.
As part of an agreement, heavily indebted Crazy Shirts plans to file for bankruptcy and Santa Barbara-based Big Dog Holdings Inc. is expected to buy the company for $10 million through a court proceeding, according to a Big Dog company statement.
The deal is expected to close in early November and is subject to court approval.
Big Dog makes active wear, sportswear, accessories and gifts under the Big Dogs brand, and operates about 200 stores. Its second-quarter sales were $25.2 million.
Crazy Shirts makes dyed T-shirts, tops and accessories and has 44 stores in tourist areas.
In the year ended Feb. 25, Crazy Shirts had sales of $47.7 million, which is down from $90 million in 1997.
The impending acquisition bodes well for Crazy Shirts, according to Randy Yeager, its president and co-chairman.
Crazy Shirts had been looking for an investor or buyer for eight months, he said.
The company had a “large overhanging debt” from its purchase of a sugar mill in Honolulu in the mid-’90s that was going to be Crazy Shirts’ new headquarters, he said.
Plus, Crazy Shirts’ sales had been on the decline, mainly because of a dramatic fall-off in Japanese tourism to Hawaii, he said.
The future of Crazy Shirts’ facility in Tustin remains uncertain. It employs about 100 people, down from 175 last year.
As for Crazy Shirts’ 44 stores, Yeager anticipates that the majority will remain with the new owner. He said he thinks at most three or four will close, if any do.
