Careismatic, a medical scrubs maker and distributor in California, filed for bankruptcy Jan. 23 as it logs $833 million in debt, according to The Wall Street Journal.
The Santa Monica, Calif.-based, private equity-owned company reported record sales in 2021 with $687 million in revenue, but demand for medical supplies has since dwindled alongside a decrease in COVID-19 cases.
"While Careismatic expanded capacity to meet market demand, demand has normalized in 2022 and 2023," Kent Percy, the company's chief restructuring officer, said in court documents.
The business, which employs about 800 employees in the U.S., listed its assets and liabilities exceeding $1 billion, according to the Journal.
Besides falling demand, other reasons cited for the bankruptcy include inflation, constant supply chain disruptions and a challenging labor market, Mr. Percy said.