Politics
Prominent Company Ditches California For Red State: ‘It’s Too Hard’
A California apparel company has packed up its headquarters and moved to Texas, with its CEO delivering a blunt verdict on the Golden State’s business climate.
“Doing business in the state of California sucks,” Hil Davis, CEO of Digital Brands Group, told Fox News Digital.
The company relocated its headquarters more than 1,300 miles to Round Rock, Texas, just north of Austin, where it leased roughly 70,000 square feet of warehouse and office space.
Davis said the Texas facility costs about the same as the company’s former location in Vernon, California, despite giving the business more room to expand its collegiate sports apparel operation.
For Davis, though, rent was only part of the problem.
He pointed to California’s high cost of living, long employee commutes, rising legal expenses and the broader cost of operating in the state.
“You start to add all those things up,” he said. “It doesn’t work. It doesn’t make sense. It’s too hard.”
The move adds to an ongoing debate over whether California’s taxes, regulations and cost structure are driving businesses and high-income residents toward lower-cost states such as Texas.
That fight has grown even sharper as California considers a proposed one-time tax of up to 5% on residents worth more than $1 billion.
Supporters argue the measure could raise billions of dollars for health care and other public programs.
California companies continue to head for the exits.
Digital Brand Group CEO Hil Davis is relocating the apparel and e-commerce company’s headquarters from California to Round Rock, Texas, citing the state’s high costs, employee commutes and increasingly difficult business… pic.twitter.com/1B3fb64eYC
— Just the News (@JustTheNews) August 17, 2026
Critics warn it could do the opposite by encouraging some of the state’s biggest taxpayers to leave, taking future tax revenue with them.
Even Democratic Gov. Gavin Newsom has opposed the proposal, warning it could push wealthy residents and investment out of California.
Recent IRS data already shows a steady flow of taxpayers leaving the state.
Los Angeles County posted the largest net taxpayer loss in the country in the latest figures, with 17,496 more tax filers leaving for other states than moving in.
Those departing taxpayers took nearly $1.9 billion in income with them.
Other major California counties also posted sizable losses.
Orange County recorded a net loss of 11,618 tax filers, while San Diego County lost 9,401. Riverside County lost 8,968 and San Bernardino County lost 8,462.
Those departures matter because when taxpayers leave, the income tax base that helps support schools, public safety and infrastructure can leave with them.
Davis said he does not expect one dramatic rush for the exits.
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“I don’t know if there’ll be, like, an explosion,” he said. “I just think it’ll be a constant leak.”
California still has major advantages that are difficult to recreate elsewhere.
Silicon Valley remains a global center for technology and venture capital, while Los Angeles continues to offer a deep pool of creative talent.
Davis acknowledged those industry “centers of gravity” still matter.
Digital Brands Group will also keep some production operations in Los Angeles after moving its headquarters to Texas.
But Round Rock offered what Davis viewed as a better overall deal, including lower operating costs, faster permitting, a central shipping location and access to Austin’s workforce.
Employees are now deciding whether to make the move with the company.
Davis said some workers are eager to relocate to Texas, while others with deep ties to California may choose to stay behind.
Digital Brands Group has already made its decision.
As California lawmakers debate whether to squeeze even more revenue from the state’s wealthiest residents, Davis says the bigger business exodus may not come all at once.
It may happen company by company.
