Canadian Pantyhose Maker Furloughs 40% of Staff on Trade-War Woes

The threat of US tariffs has caused a Montreal-based women’s clothing maker to place more than a third of its workers on leave.

SRTX is putting 40 percent of its 350 employees and contractors on temporary layoff, Chief executive officer Katherine Homuth said in a statement. The company has 85 percent of its sales in the US and has invested “tens of millions” in Canadian factories, she said.

The company’s products already face a 16 percent duty to ship to the US under North American trade rules because some of its raw materials are sourced outside the continent, she said in a social media post. Adding 25 percent US tariffs, as President Donald Trump has threatened to do, would bring that to 41 percent.

The Trump administration would deal the company a further blow if it follows through with removing an exemption that had allowed low-value packages to be shipped duty-free to US consumers.

“We are in a worst-case scenario,” Homuth said, adding that the company has suffered delays in closing a fundraising round.

“This puts immense pressure on our business model, especially as a company that has invested heavily in integrated manufacturing in Canada.”

SRTX, founded in 2017 with the backing of Y Combinator, is known for making resilient pantyhose called Sheertex. It has raised over $200 million in capital from investors including Sweden’s Hennes & Mauritz AB, Investissement Quebec and the Canadian government’s export development agency, according to a company presentation.

Homuth lamented the “fragile state of domestic manufacturing in Canada” in her statement.

“Canadian brands that rely on overseas production can pivot quickly, shifting suppliers or logistics providers to work around the tariff structure with relative ease. But for companies like ours, who are building from the ground up here at home, the stakes are much higher,” she said.

The makers of the “Canada is Not for Sale” hat popularised by Ontario Premier Doug Ford learned this as well, as they struggled to find companies that would manufacture the hats in the country, the Canadian Press reported in January.

The Canadian Chamber of Commerce called for the government to reconvene the House of Commons to respond to trade tensions. Parliament has been suspended since early January, when Prime Minister Justin Trudeau announced his resignation, triggering a race to replace him.

“We need to send a strong message to President Trump and the world that we will rise to this occasion, as a unified Canada. Tariffs tomorrow instead of tariffs today still leave businesses, workers and families in the lurch,” Candace Laing, CEO of the chamber, said in a statement.

By Melissa Shin

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