Digital Brands Group just ditched California and hauled its entire headquarters to Texas.
CEO Hil Davis didn't mince words about why his apparel company fled the Golden State. "Doing business in the state of California sucks," he told Fox News Digital, as reported here. The man said it plain and simple. And honestly? The numbers back him up.
The company locked down approximately 70,000 square feet of warehouse and office space in Round Rock, Texas, situated just north of Austin. Here's the kicker. That massive Texas facility costs roughly the same amount as their old spot in Vernon, California, but gives them way more room to grow their collegiate sports apparel business. Same price tag, better deal. California is literally charging premium rates for less.
But Davis says the rent situation was only one piece of the nightmare. Sky-high living costs meant brutal commutes for employees. Legal bills kept climbing. The overall expense of simply existing as a business in California kept stacking up. "You start to add all those things up," Davis explained. "It doesn't work. It doesn't make sense. It's too hard."
And this isn't some isolated tantrum from one fed-up CEO. The latest IRS data paints a devastating picture for California. Los Angeles County alone saw 17,496 more tax filers pack their bags for other states than it attracted. Those departing taxpayers carried nearly $1.9 billion in income out the door with them. Orange County hemorrhaged 11,618 net filers. San Diego lost 9,401. Riverside dropped 8,968. San Bernardino watched 8,462 walk away.
Meanwhile, California legislators are cooking up a proposal that could slap residents worth over $1 billion with a one-time tax reaching 5%. Supporters claim it would generate billions for healthcare and public programs. Critics say it's basically rolling out a red carpet toward the state line. Even Governor Gavin Newsom, a Democrat, has pushed back against the idea, cautioning it could chase wealthy residents and their investments right out of California.
Davis doesn't predict some massive overnight stampede. "I don't know if there'll be, like, an explosion," he said. "I just think it'll be a constant leak." Company by company, slowly bleeding out.
The CEO acknowledged California still holds certain advantages. Silicon Valley remains the undisputed king of tech and venture capital. Los Angeles offers creative talent that's tough to replicate anywhere else. Davis called them "centers of gravity" that still carry weight.
Digital Brands Group will actually maintain some production operations in Los Angeles even after the headquarters relocation. But Round Rock delivered what Davis considered the superior package overall, featuring lower costs, quicker permits, a geographically central shipping hub, and access to Austin's growing labor pool.
Some employees are reportedly excited about relocating to Texas. Others who have deep roots in California might opt to stay behind. The company itself, however, has already made its choice. And if Davis is right about that "constant leak," California's tax base could be in for a slow, painful decline that no billionaire tax will fix.
Read more breaking news stories at: Trending Politics News
Last edited by a moderator:
