Montréal-based SRTX, the maker of Sheertex “unbreakable” tights, struck a deal to sell to fellow Quebec textile manufacturing startup AYK International on Tuesday, following a tough year for the company.
As part of the sale, SRTX is filing a notice of intention (NOI) to make a proposal under the Bankruptcy and Insolvency Act, which allows companies to restructure without filing for bankruptcy. SRTX said the NOI will “provide an orderly process” to seek court approval of the transaction in the coming weeks.
AYK is expected to continue the Sheertex brand and to continue using SRTX’s proprietary technology, according to SRTX. However, certain assets are not part of the deal, including the lease for SRTX’s Pointe-Claire, Que., facility, as well as certain machinery and equipment. An SRTX spokesperson told BetaKit in an email on Wednesday that the transaction details will be spelled out in the NOI, which is not yet available.
Founded in 2017, SRTX makes rip-resistant tights, which consist of a uniquely durable polymer several times stronger than steel wire. By December 2024, the company had raised over $250 million USD in debt and equity. That month, founder and CEO Katherine Homuth wrote in a Substack post that SRTX was losing over $30 million per year and was “not even close” to being profitable. She said SRTX’s strategy was to prove market viability at a loss as it took on $25 million USD ($35 million CAD) in convertible debt to grow its headcount and become profitable by the end of 2025.
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Going into February 2025, SRTX had roughly 350 employees as the United States instituted new trade policies, including tariffs and abolishing the de minimis exemption on low-value goods. Homuth said those policies “led to tremendous financial uncertainty” and, before they became official, the company temporarily (later permanently) laid off 40 percent of its staff.
SRTX went on to experience two leadership changes in 2025, including the departure of Homuth as part of a $40-million USD fundraising deal from the company’s existing investors. Homuth submitted a bid to return to the business this past October when her short-lived replacement, BonLook co-founder Sophie Boulanger, left SRTX as it laid off more staff and initiated a strategic review to potentially find a buyer.
The SRTX spokesperson told BetaKit that “only a small number of employees remain at SRTX now for transition purposes,” and that fewer than 10 employees will be retained by AYK post-acquisition.
AYK CEO Dan Abitan said in a statement that the company has “long admired” Sheertex, and that AYK will “invest in its long-term stability and growth.”
With files from Madison McLauchlan
Feature image courtesy H&M Group Ventures.