Robert W. Humphreys has resigned as CEO and chairman of Delta Apparel (PPAI 188431, Gold) – ranked the No. 69 supplier in the 2024 PPAI 100 – at the request of the board of directors, according to a filing with the Securities & Exchange Commission.

Humphreys, who joined the Duluth, Georgia-based company in 1998 as CEO and became chairman in 2009, submitted his resignation on May 16.

• His final day with the firm will be June 29.

Delta Apparel has appointed Tim Pruban as its chief restructuring officer, according to the filing.

• Pruban is the founder of Focus Management Group, a national financial advisory and management consulting group.

• His role at Delta Apparel will be to advise the board on succession planning.

Financial Struggles

• Net sales from its retail stores segment – Salt Life Group – were $15.5 million in Q2, down about 22% from Q2 2023.

• In the 2023 fiscal year, which ended September 30, 2023, Delta Apparel reported a loss of $33.2 million.

“Fiscal 2023 was undoubtedly a challenging year for our company and the industry given the reduced demand environment following last year’s post-pandemic seller’s market,” Humphreys said at the time. “However, it was also a transformative year for our company where we implemented a number of needle-moving initiatives across our business that set the stage for significant operational improvement.”

• According to the company, its lenders have elected not to declare the principal and all other amounts owed to be immediately due and payable.

However, if the lenders do call such debt during the next 12 months, Delta Apparel says it won’t have readily available funds to repay the debt, raising “substantial doubt about the company’s ability to continue as a going concern.” If the firm can’t address such concerns, it may seek relief under applicable bankruptcy laws, according to the quarterly report.

• Additionally, the company says it was notified by certain suppliers in January that they would no longer extend credit in amounts or terms to the extent previously allowed, limiting Delta Apparel’s ability to obtain raw materials.

Furthermore, its DTG2Go digital-print business recently received notice that its largest customer no longer intends to source production from the platform. As a result, the company expects to receive an impairment charge in the third quarter of fiscal 2024.

Two weeks ago, the apparel maker reported that its net sales for the fiscal second quarter were $78.9 million, down nearly 40% from the same period last year.

Delta Apparel also reported it’s been non-compliant with a financial covenant contained in its U.S. revolving credit facility that required its financial results to “improve at a rate faster than we experienced during the second quarter and at a faster rate than we expect to experience over the next 12 months.”

Written by: John Corrigan

Published with Permission from PPAI

SAGE, the leading provider of software and solutions to the promotional products industry, is proud to announce the industry’s first real-time custom image generation tool as part of its popular website platform. The new image generation tool utilizes cutting edge artificial intelligence, further enhancing SAGE’s groundbreaking AI features aimed at transforming content creation and optimization.

Distributors and suppliers using SAGE to power their websites and company stores can now easily create completely custom and unique images on their website. All areas of the website that allow for custom rich text support the new feature. Creating an image is as easy as typing in a description and hitting the Generate Image button. In just a few seconds, the powerful AI engine will create an image that fits the exact description.

Additionally, SAGE provides a full detailed description of the created image. Users can use this description to further hone the image by adjusting the prompt text and resubmitting it to the AI engine to create a new image.

The new image creation tool not only allows users to visually enhance their website, but it also eliminates potential copyright concerns that can arise with using images found online.

One popular area for using this new image creation tool is the blogs area of the website platform. Earlier this year, SAGE introduced technology that will instantly create an entire blog article based on a given prompt. Now, with the image creation tool, users can easily add images to their blog articles as well.

"It used to take hours or days to create a blog article and find or create images for it that you had the proper rights to use. Now, with these new tools we’ve reduced that time to mere seconds, drastically improving the ability to easily create quality content on our customers’ websites” said Brian Pritchard, Vice President of Information Technology. “As the technology leader in the industry, our goal is to utilize all of these amazing new technologies to create tools that are actually useful to our customers. By doing so, we’re allowing our customers to not just stay competitive but also to be more efficient. It’s a complete win-win.”

4imprint (PPAI 107200, Platinum) – ranked the No. 1 distributor in the 2024 PPAI 100 – has announced that David Seekings, chief financial officer at the Oshkosh, Wisconsin-based firm, is retiring.

Seekings, who joined the 4imprint Group in 1996 and was appointed CFO in 2015, plans to retire from his role and from the board of directors before the end of 2025, the company announced during its annual general meeting on Wednesday.

“David has served 4imprint Group plc loyally since joining in 1996,” says 4imprint CEO Kevin Lyons-Tarr. “Over the years he has played an important role in shaping many different aspects of the development of the company, in particular driving the growth of the direct marketing business. I see every day how much he cares about the company and all of its stakeholders, so it comes as no surprise to me that he is allowing ample time and making a full commitment to a successful transition.”

Seekings will “actively participate” in a recruitment process to determine his successor, the company added.

“In due course, I will have plenty of time to reflect on my 27-year career with the company and the amazing people that I have had the privilege to work with along the way,” Seekings says. “Right now, however, I remain completely focused on the business and doing all I can to ensure a smooth succession and to help 4imprint to continue its success for many years to come.”

Revenue Growth

In addition to Seekings’ retirement announcement, 4imprint also reported during the meeting that it achieved 6% revenue growth in the first four months of 2024 compared to the same period in 2023.

Paul Moody, chairman of 4imprint, says the increase was driven by a 4% rise in order intake and a 2% increase in average order values.

RELATED: 4imprint Repeats As Top Distributor In PPAI 100 Rankings

“Gross margins have remained strong, and the reshaped marketing mix has demonstrated the efficiency and flexibility that we expected,” Moody says. “As a result of these factors, the board expects a financial performance for the year within the current range of analysts' forecasts. The board remains confident in the group's ability to blend good near-term financial results with attractive prospects for significant further organic growth over the medium term.”

• In 2023, 4imprint extended its lead over all other promo distributors after posting earnings just north of $1.3 billion – both a company and industry record.
• The e-commerce giant’s digital-first approach and unprecedented advertising campaign has paid dividends: 4imprint received more than two million total orders in 2023, up 12% from 2022, and acquired 311,000 new customers, up 1.3% from 2022.

4imprint says it will announce its half-year results for the 26 weeks ending June 29 on August 7.

Written by: John Corrigan

Published with Permission from PPAI

Industry leaders anticipating relief from Trump-era tariffs had their hopes dashed on Tuesday, as the Biden administration announced tariff increases on $18 billion worth of imports from China, which is where most promotional products in the United States and Canada come from.

Additionally, Biden is maintaining the levies enacted by his predecessor on more than $300 billion worth of imports.

• China’s commerce ministry responded by saying that Beijing opposed the tariff hikes and would take measures to defend its interests, Reuters reported.

Although the Biden administration claims that the tariff increases will ensure that American job creation isn’t “undercut by a flood of unfairly underpriced exports from China,” Ben Zhang, president and CEO of Greater Pacific – ranked the No. 68 supplier in the 2024 PPAI 100 – argues that “tariffs just increase prices, create inflation and harm the U.S. consumer.”

“Who’s really punished by tariffs? American companies, not Chinese manufacturers,” Zhang says.

• In 2023, the U.S. imported more than $427 billion in goods from China and exported nearly $148 billion to the world's second largest economy, according to the U.S. Census Bureau.

“This industry relies on significant manufacturing in China,” adds Thomas Goos, MAS, president of Image Source – ranked the No. 48 distributor in the inaugural PPAI 100. “There will be increased costs from these new tariffs, and we could lose sales. It’s not good for our industry.”

What Items Are Impacted By The Tariffs?

The Biden administration said that the increased tariff rates will apply to:

• steel and aluminum products (rising from 7.5% to 25% this year)
• battery parts (from 7.5% to 25% this year)
• electric vehicles (from 25% to 100% this year)
• solar cells (from 25% to 50% this year)
• ship-to-shore cranes (from 0% to 25% this year)
• semiconductors (from 25% to 50% by 2025)
• natural graphite (from zero to 25% in 2026)
• other critical minerals (from 0% to 25% this year)
• permanent magnets (from zero to 25% in 2026)
• syringes and needles (from 0% to 50% this year)
• personal protective equipment (PPE) like respirators and face masks (from 7.5% to 25% this year)
• rubber medical and surgical gloves (from 7.5% to 25% in 2026)

For the promo industry, the most notable tariff increase is for steel and aluminum products, which will climb from 7.5% to 25% this year. Those items are often used in industry staples, such as reusable drinkware and pens.

Cheron Coleman, vice president of private brand product development and global supply chain at alphabroder – ranked the No. 2 supplier in the 2024 PPAI 100 – says the tariffs’ impact on promotional products will vary depending on specific product categories.

“Suppliers and distributors of multi-tools, drinkware (such as tumblers and travel mugs) and tech gadgets (such as USB drives and phone stands) made of Chinese aluminum or steel should closely monitor developments and make necessary adjustments, if needed,” Coleman says.

Although Trump-era tariffs had already played a significant role in several promo firms moving their production out of China, Zhang estimates that 90% of the industry’s drinkware still comes from the country. As an importer, Zhang says that tariff increases ultimately get passed onto the consumer.

“We have to build the tariff cost into our price and pass it onto our customers,” he says. “Suppliers pass it onto distributors, who then pass it onto end users.”

• As of March 2024, $230 billion has been paid – half by American consumers and half by American businesses – in Section 301 tariffs since they have been implemented by the Trump administration, according to U.S. Customs and Border Protection (CBP)
• The “Section 301” tariff exclusions on 352 Chinese import and 77 COVID-19-related categories are set to expire on May 31, 2024.

Matt Wagner, vice president of sales at Fields Manufacturing – ranked the No. 80 supplier in the 2024 PPAI 100 – anticipates periodic price increases over the next 12 to 18 months.

“The bigger impact I see this having – and it’s nothing new – is that it forces suppliers to look at other areas to import from,” Wagner says. “Suppliers will continue to keep looking at other parts of the world to produce goods and at different types of materials to produce the same product. My guess is that all these changes will have some sort of increase on price, and it’s just how well certain suppliers are able to mitigate that.”

Despite the potential challenges brought on by the tariffs, Mark Gardyn, executive vice president at New York-based supplier Gordon Sinclair, considers it an opportunity to innovate and adapt.

“In the promotional products industry, particularly with drinkware, we'll continue to focus on delivering high-quality products while exploring alternative sourcing and materials to mitigate cost impacts,” Gardyn says. “This shift encourages us to be more resilient and creative in our solutions.”

Conflicting Views

Members of the Product Responsibility Action Group (PRAG) – a PPAI volunteer group – have different perspectives on the new tariffs.

“While both the Trump and Biden administrations have supported these tariffs, their political messaging is anathema to the economic reality that these tariffs are not only counterproductive, but worse, one of the primary factors in our ever-increasing inflation and a motivator of job loss,” says Angie Morelli, owner of Las Vegas-based distributor Customistic and a member of PPAI’s Government Relations Advisory Council.

“When domestic availability of ‘like’ products exists in the quantities needed, subverting cheaper Chinese competition, in theory, makes sense,” Morelli says. “The issue with the sweeping Section 301 tariffs is that much of what this is applying costs to can't be purchased U.S. made at all, or certainly not in the quantities that we’ve been importing them from China for decades.”

Rick Brenner, MAS+, president of business services provider Product Safety Advisors, notes that The White House claims that the Chinese government is undermining low carbon emission U.S. steel and aluminum efforts by subsidizing high carbon emission Chinese steel and aluminum at unrealistically low prices. 

“If this is true, and it appears to be backed up by a four-year review by U.S. Trade Representative Katherine Tail,” Brenner says, “I would hate to see our industry complaining that we should be able to continue to buy cheap aluminum and steel that generates high carbon and is subsidized by the Chinese government to the detriment of American industries, just because we want to keep our costs low. It would also undercut our sustainability message – that we care about carbon emissions.”

Meanwhile, Brian Deissroth, director of national accounts at Edwards Garment – ranked the No. 19 supplier in the 2024 PPAI 100 – argues that tariffs are “simply a tax on American companies and the American people.”

“We can pretty much guarantee that tariffs are here to stay,” says Deissroth, adding that the best business leaders can hope for is a “retroactive renewal” of the Generalized System of Preferences (GSP).

• GSP is the largest U.S. trade preference program that provides nonreciprocal, duty-free treatment enabling many of the world’s developing countries to spur diversity and economic growth through trade, according to CBP.

GSP expired on December 31, 2020, and is pending Congressional renewal under H.R. 7986.

“When Congress reasserts themselves and renews H.R. 7986, it will provide relief for small businesses by creating competition within the supply chain,” Deissroth says. “Reach out to your representative and ask them to support H.R. 7986.”

Written by: John Corrigan

Published with Permission from PPAI

iClick (PPAI 254537, Platinum) has announced the retirement of Jeff Hall, who joined the supplier in 2010 as its president and took on the role of CEO in 2019. In the wake of his departure, Jeff Roberts, who had been serving as CFO, has been appointed CEO.

• Last week, iClick was named the No.41 supplier in the 2024 PPAI 100.
• Hall had served in leadership roles with iClick, which launched in 2001, for more than half of its existence.
  
  

“It has been a privilege to be a part of this industry with so many great individuals and especially to work with the great team of people at iClick,” Hall says. “The last 14 years have been the most fun of my career, and I am grateful to all those who have helped to make it so.”

As noted in the Seattle-based company’s PPAI 100 ranking, the iClick recently strengthened its employee relations with monthly offsite, in-person company events paired with Friday morning meetings to recognize employee accomplishments.

• Last year, under Hall’s leadership, iClick partnered with retail tech accessories brand Casely to bring an on-phone battery backpack to the promotional products industry.
  

Moving Forward

Roberts will step into the CEO role 11 years after joining iClick as VP of finance, eventually being promoted to chief financial officer in 2019. Having spent five years at Microsoft before transitioning to the promo world, his expertise is in sales operations and mobile technology products.

• Roberts will lead the company as it prepares to launch a new suite of MagSafe-enabled products for smartphones.
  
  

“As I step into the role of CEO, I am deeply honored to build upon the incredible foundation laid by Jeff Hall,” Roberts says. “His leadership has propelled iClick to the forefront of innovation and set a high bar for service excellence. I am excited to lead our talented team as we continue to push the boundaries of mobile technology and create products that empower our customers and redefine the industry.

“Together, we will write the next chapter in iClick's story, one that is driven by passion, innovation, and an unwavering commitment to our customers.”

With much of their iClick careers having overlapped in positions of leadership, Hall is confident that the supplier will be in good hands.

“I am excited for Jeff Roberts to have the opportunity to lead iClick,” Hall says. “In our many years working together, he has proven himself to be exceptional and I have great confidence in his ability to continue to foster the care and support that iClick has for our distributors and our team.”

Eager to further prove the intention behind its new purpose statement, “We Promote Community,” Gemline (PPAI 113948, Platinum), has officially reincorporated as a public benefit corporation.

• In the just unveiled 2024 PPAI 100, Gemline is ranked the No. 11 supplier, receiving a high mark for Responsibility.
  
  

One requirement of becoming a public benefit corporation is that the Massachusetts-based supplier will need to provide a bi-yearly report on the progress of its stated social goals. Last month, Gemline released its 2023 CSR report. To read the report in its entirety, click here.

• Additionally, Gemline's board of directors is required to include considerations of those social and environmental goals into its fiduciary responsibilities.
   

“Gemline’s commitment to social responsibility has been a consistent priority of our company and me,” says Jonathan Isaacson, executive chair at Gemline. “Formalizing this commitment as a public benefit corporation aligns with the ethos that has guided both myself and the board for many years.”

 

What Is a Public Benefit Corporation?

By granting Gemline public benefit corporation status, the government is essentially recognizing the supplier as a business that is in the public interest. The designation intends to encourage for-profit organizations to be driven by more than just profit, and PBCs are legally required to pursue one or more environmental or social purposes.

Additionally, it is expected to operate within the best interests of stakeholders rather than just shareholders. Within this context, stakeholders include:

• Employees
• Customers
• Suppliers
• Communities in which the business operates.
  
  

Public benefit corporations are protected from liability if the business does not maximize shareholder value as long as it is in pursuit of the company’s social or environmental goals.

Gemline’s board of directors notes that the legal requirements of PBC status mirrors the company’s stance that profitability and positive social and environmental impact can be reached in tandem.

“We are proud to join the growing community of public benefit corporations that are driving positive change in the business world,” says Frank Carpenito, president and CEO of Gemline. “By embracing this new legal structure, Gemline reaffirms its commitment to being a force for good and setting a higher standard for corporate responsibility.”

Gemline’s Betterway program is a corporate social responsibility initiative that focuses on “People, Planet and Product.”

• In 2023, Gemline diverted 100% of waste from landfills.
• It also donated nearly $1 million to charitable causes.

Written by: Jonny Auping

Published with Permission from PPAI

Cap America (PPAI 111597, Gold) – the No. 11 supplier in the inaugural PPAI 100 – has brought on Carter Newman as national sales manager for sporting goods.

• He will oversee the external sales team and work closely with internal sporting goods personnel to ensure seamless operations and customer service. He will also collaborate with Tim Nixon to spearhead growth initiatives within the division to further enhance Cap America’s market presence.
• Newman brings more than a decade of experience in the sporting goods sector managing large-scale headwear operations and maintaining pivotal accounts and partnerships.
  
  

“Carter joins us during a time of remarkable growth in our sporting goods division,” says CEO Mark Gammon. “His profound industry knowledge and extensive relationships are tremendous assets that will undoubtedly contribute to our ongoing success and solidify our position as a market leader in decorated team headwear.”

Newman is equally excited about his new role. “Cap America has long been known as the industry leader in service and speed,” he says. “Their customer-focused approach and commitment to providing the best service in the industry are what sets them apart as a leader in the headwear space and I’m extremely excited to have the opportunity to join such a dynamic and fast-growing organization.”

SnugZ USA (PPAI 112982, Platinum) has announced an exclusive partnership with The HYPE Company, a customizable, on-demand sandal provider, bringing the signature slides into the promotional products marketplace.

The HYPE Company was recently featured on an episode of Shark Tank.

Barbara Corcoran, one of the show’s “sharks” was impressed enough with the presentation to invest in the company.

“Co-founder Cheng Kue and I are incredibly excited to be launching our on-demand slides into the promotional products industry together with SnugZ,” says Marc Herzberger, CEO and co-founder of The Hype Company. “This strategic partnership leverages our extensive background in footwear development with brands like Adidas, Fila and most recently Crocs and together allows us to bring a product that the industry has been craving.”

‘Master Class Creative Innovators’

Herzberger says that The HYPE Company redefines what could be possible for the footwear market when it comes to brand promotion. The customizable option of the company’s signature slides creates a blank canvas that SnugZ can apply its promotional products experience.

“The team at HYPE has been an absolute dream to work with,” says Brittany David, MAS, SnugZ’s chief revenue officer. “They are master class creative innovators, and we are excited to expand their reach into our industry.

“We are always looking to add cool, high-quality products and brands to the promo world that people want to keep and work with people we like.”

The partnership will produce one-piece minimums, offering a true on-demand offering.

Written by: Jonny Auping

Published with Permission from PPAI

SanMar (PPAI 110788, Platinum) – the No. 1 supplier in the inaugural PPAI 100 – has been recognized as a 2024 U.S. Best Managed Company, an award sponsored by Deloitte Private and The Wall Street Journal.

• The award recognizes the achievements of U.S. private companies and the successes of their management teams. SanMar has been a family-owned business since its founding in 1971 and is currently managed by the third generation of the Lott family.

• The company’s longstanding investments in its employees, operations and sustainability efforts are key drivers for its selection this year.

• Honorees are selected by an external panel of judges who evaluate applicants based on strategy, ability to execute, culture, and governance and financial performance.

“We are humbled to receive this recognition,” says Jeremy Lott, CEO of SanMar. “I'm motivated by our team’s unwavering dedication to doing right by each other, our customers and our values.”

The Texas Spring Swing, a collaborative effort between the Houston Promotional Products Association (HPPA) and the Promotional Products Association Southwest (PPAS), concluded its third annual event last week with resounding success. The week-long extravaganza, spanning across Houston, San Antonio, Austin, and Dallas, brought together approximately 75 exhibitors representing 150 different factory lines and attracted about 800 attendees.

Reflecting on the event's success, Malik Hemani, CAS, President of HPPA, stated, "The Texas Spring Swing surpassed expectations. It brought together Suppliers, MLRs, and Distributors in a dynamic environment where connections were made and ideas flourished. What set this event apart was its inclusivity, allowing end buyers to participate alongside distributors fostering partnership and creativity. Walking the show floor, I couldn't help but be inspired by the plethora of products and creative displays. It was a testament to the power of face-to-face interaction in our digital age. Kudos to the trade show committee and all industry members for upholding a culture of respect and integrity, ensuring a productive and enjoyable experience for all."

Chad Rizzo, President of PPAS, remarked, "This was a fantastic week for PPAS and our Texas Spring Show. By all measures, participation from suppliers, distributors, and end buyers was at an all-time high. This is further evidence that the changes the previous PPAS boards have instituted are working. Regional engagement has become an integral part of the promotional product industry, and we are excited for what the future will bring."

The success of the Texas Spring Swing underscores the importance of regional engagement in the promotional product industry and highlights the value of collaborative efforts among industry associations. As the event continues to grow year after year, it serves as a beacon of innovation and camaraderie within the industry.

For more information about the Texas Spring Swing and future events, visit https://www.houstonppa.org/ and https://ppas.wildapricot.org/.