Delta Apparel Inc., parent company to the Salt Life lifestyle apparel brand and Soffe activewear brand, has filed for Chapter 11 bankruptcy protection in a Delaware district court. The apparel company has close to $337.8 million in assets and $244.5 million in total debt, according to the bankruptcy filing.
According to Bloomberg, an increase in cotton prices and other raw materials as well as diminished demand for products contributed to Delta Apparel’s financial troubles.
Just before the Chapter 11 filing, Delta Apparel entered into an asset purchase agreement for its Salt Life branded products. According to Bloomberg, the company has entered into a purchase agreement with Forager Capital Management (FCM) Saltwater Holdings Inc. to acquire the marketing, sourcing, licensing and selling of its Salt Life branded products for a total purchase price of about $28.03 million. Upon bankruptcy court approval, FCM Saltwater Holdings Inc. is expected to be designated as the stalking horse bidder in connection with a sale of the Salt Life assets under section 363 of the bankruptcy code.
Additionally, Robert W. Humphreys has resigned as Delta Apparel’s chairman of the board and CEO, effective June 29, according to a filing the company made with the U.S. Securities and Exchange Commission. Delta Apparel has appointed Tim Pruban with Focus Management Group as its chief restructuring officer, who will advise the board on succession planning with regards to Humphreys’ departure.
In light of the apparel company’s bankruptcy filing, the New York Stock Exchange (NYSE) has removed Delta Apparel’s common stock information and suspended trading of the company’s stock as of July 1. Delta Apparel plans to continue to operate normally while it’s under court protection and has lined up Chapter 11 financing with Wells Fargo Bank and its other existing lenders.
