Marine apparel brand Salt Life, formerly a top-performing asset of Delta Apparel (PPAI 188431, Gold) – the No. 69 supplier in the PPAI 100 – belongs to new owners after a recent bankruptcy auction.

Brand licensor Iconix International and retail liquidator Hilco Merchant Resources submitted a joint bid of $38.74 million to win the business, SGB Media reported. On September 16, U.S. Bankruptcy Judge Laurie Selber Silverstein approved the bid, the Jacksonville Daily Record reported.

• FCM Saltwater Holdings had reportedly offered $28 million to buy the Salt Life brand from Delta Apparel, which hoped it would serve as a stalking horse bid – a term for the initial bid on the assets of a bankrupt company, which sets a minimum price for other potential bidders.
• However, FCM’s final bid of $37 million was bested.

Salt Life, which operates more than 20 retail stores across the United States, produced a revenue of $59 million for the fiscal year that ended September 30, 2023.

Delta Apparel’s Downward Spiral

In July, Delta Apparel filed for Chapter 11 bankruptcy, reporting more than 200 creditors.

• At the beginning of June, the Duluth, Georgia-based supplier had $337.8 million in total assets and $244.5 million in liabilities according to the filing.
• Its largest creditor is Park Mills, which is owed more than $22 million from Delta Apparel.

Tim Pubian, president of Focus Management Group, was named chief restructuring officer in May, after Delta’s board of directors pushed out CEO Robert W. Humphreys amid ongoing financial struggles.

In June, the company suspended its manufacturing operations in Honduras as it attempted to work through its liquidity challenges.

“The company’s deteriorating liquidity position and lack of funding has continued to prevent it from purchasing raw materials necessary to operate its offshore manufacturing facilities and to pay compensation and benefits due to offshore employees,” Delta Apparel said in the SEC filing at the time.

In May, 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.

• Net sales from its Salt Life Group retail stores segment 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.

Written by: John Corrigan

Published with Permission from PPAI