Employees complete finishing on pantyhose inside Sheertex, a textile company that makes unbreakable by human hands pantyhose in Montreal, Quebec, December 20, 2019. (Christinne Muschi /The Globe and Mail)Christinne Muschi/Christinne Muschi/The Globe and
A.Y.K. International Inc., the maker of Secret and Silk pantyhose, has struck a deal to purchase insolvent Sheertex parent SRTX Inc.
SRTX and three affiliates last week filed a notice of intention to make a proposal under the federal Bankruptcy and Insolvency Act, with PricewaterhouseCoopers Inc. acting as trustee.
The deal, which requires court approval, would be structured as a “reverse vesting” deal, meaning that assets and liabilities that Montreal-based A.Y.K. doesn’t want would be transferred to a separate entity. A.Y.K. is not taking SRTX’s lease agreements on its two manufacturing properties, accounts receivables, raw materials inventory or certain software, machinery and equipment.
The deal price is confidential until closing.
Montreal-based SRTX raised US$37.5-million last year from existing investors including H&M Group, BDC Capital, Export Development Canada and Investissement Québec and hired a new chief executive officer in September to replace founder Katherine Homuth. The new funding was supposed to give SRTX enough cash to fund a planned production expansion.
But liquidity issues continued, and the replacement CEO, retail and fashion veteran Sophie Boulanger, departed after less than two months as the board put SRTX up for sale in October. The company received seven binding offers in the process.
In a filing with Quebec Superior Court, the company said that despite raising more than US$200-million since its founding in 2017, by last fall SRTX was struggling with limited financial resources after encountering multiple challenges, including high production costs, delays in scaling the company, the cyclical nature of the hosiery sector, exchange rate fluctuations “and shifting trade policies” that “collectively contributed to the applicants’ cash flow challenges.”
The company had recently taken a costly bet to onshore production of its raw material, a rip-resistant thread made from the same polymer used in bulletproof vests, and moved into a 300,000-square-foot vertically integrated leased facility on the western end of Montreal Island. The move was intended to drive its cost of production low enough to make the business profitable on an operating basis in 2025.
Revenues had dropped from US$44.5-million to US$27.9-million as SRTX shifted from selling its product directly to consumers to focus on getting its leggings into conventional retail channels. That would have required SRTX to charge less to retailers than selling the product online, in hopes of generating greater volumes and bringing unit costs down.
But in the face of multiple challenges, SRTX laid off staff and generated just US$7.6-million in sales in the first 10 months of 2025. It was projected to reach US$17-million in revenues for the year, according to the company’s court filing. SRTX generated an operating loss of US$19.5-million in the first 10 months of 2025, compared to a US$40-million operating loss in 2024
“Over all, in the circumstances, the proposed transaction represents the best possible transaction and restructuring option generally,” SRTX said in its court filing. “It also leaves the door open to a further transaction in respect of the remaining assets.”
Ms. Homuth embarked on an unlikely mission in 2017 to replace run-prone nylon tights with a sturdier alternative. She convinced skeptical industry observers and investors that she could build a viable product and business. By early last year, the company had sold more than $216-million worth of goods, which were stocked by H&M, Costco Wholesale Corp., Walmart Inc., Holt Renfrew & Co. Ltd., Macy’s Inc. and Kim Kardashian’s Skims banner.
But after opening the new plant , Ms. Homuth fell short of her goal in 2024 to raise $105-million in fresh funding that she said was needed to carry SRTX until millions of wholesale units were shipped to retailers and paid for last year. Ms. Homuth also took umbrage to a Wirecutter review in The New York Times in late 2024 that said a rival product was better than Sheertex.
That prompted her to write a series of candid social-media posts about SRTX’s fundraising challenges and related frustrations, which she later acknowledged was not well received by investors. Months after her exit, the serial entrepreneur said last October on LinkedIn that she’d submitted a proposal to the company; shortly afterward, she posted she was “deciding if this is worth the cost” and said the pursuit was “resurfacing a lot of trauma” for her.