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Delta Apparel files for bankruptcy; to sell 28-store Salt Life brand

Salt Life store
Salt Life operates 28 locations, including 15 full-price stores and 13 outlet stores across the country.

Delta Apparel, a wholesale clothing manufacturer based outside of Atlanta, has filed for bankruptcy amid higher costs and declining demand.

Prior to filing, Delta entered into an asset purchase agreement to sell its ocean-inspired lifestyle apparel and accessories retail brand Salt Life to FCM Saltwater Holdings Inc. for $28 million in cash. Upon bankruptcy court approval FCM is expected to be designated as the “stalking horse” bidder in connection with the sale of the Saltwater brand.

Founded in 2003 by “four avid watermen” in Jacksonville Beach, Fla., Salt Life was acquired by Delta Apparel in 2013. Under Delta’s ownership, the brand expanded its brick-and-mortar footprint as well as its wholesale distribution. It addition to its own 28 stores, Salt Life products are sold in in surf shops, specialty stores, department stores and sporting goods stores.

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“Continued expansion of our retail presence is an important piece of our omnichannel strategy and an exhilarating step forward for Salt Life, allowing us to bring the Salt Life experience to ocean enthusiasts in markets across the country,” Jeff Stillwell, group president, Salt Life, said in a release last November. “Our new stores are more than just retail storefronts. They are vibrant spaces where customers can immerse themselves in the salty lifestyle and experience our passion for all things on the water.”

Prior to filing for bankruptcy, Delta Apparel listed debts and assets each in the $100 million to $500 million range. In May, the company reported second-quarter net sales of $78.9 million, down nearly 40% from the year-ago period. Its loss increased to $36.3 million from $7.0 million.

Also in May, Delta Apparel said in a filing that Robert Humphreys, chairman and CEO since 2009, would resign “at the request of the independent directors,” effective June 29. The company named Tim Pruban, the founder of Focus Management Group, as chief restructuring officer.

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