BizSC

Apparel Firm Founded In South Carolina Files For Bankruptcy

Salt Life’s parent company seeks Chapter 11 protection …

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Delta Apparel Inc. – the owner and parent company of the popular Salt Life clothing brand – has filed for Chapter 11 bankruptcy after facing a downward spiral in sales and decreasing financial options.

Previously headquartered in Greenville, S.C., Delta Apparel along with its U.S. subsidiaries sought bankruptcy protection last week – with the petition listing $337.8 million in assets and $244.5 million in debt to 30 different creditors.

As for the Salt Life business, Delta Apparel is working on a deal to sell the well-known clothing and accessories brand – which has six stores in South Carolina and Florida. According to layoff notices filed last week with the S.C. Department of Employment and Workforce (SCDEW), if the company can’t find a suitable transaction, the stores will be closed – including those in Charleston, Bluffton and Myrtle Beach.

The company already has struck a deal to sell part of Salt Life to a buyer from Alabama – who has set the floor price at $28 million – but hopes other bidders will produce a higher offer.

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Delta Apparel – now headquartered in Duluth, Georgia — was once a part of Delta Woodside Industries Inc., which was formed by Greenville-based Alchem Capital Corp. in the mid-1980s.

With more than a dozen textile mills across the Carolinas, Delta Woodside has also filed for bankruptcy and liquidated its mills and other assets after closing plants and cutting jobs.

Similarly to Delta Woodside, Delta Apparel shut down its Mexico sewing business earlier this year and halted all production in Honduras – owing $15 million in severance pay to more than 2,400 displaced workers.

In a sworn statement to the U.S. Bankruptcy Court last week, Delta Apparel chief restructuring officer and Focus Management Group president, J. Tim Pruban said that Delta experienced significant reductions in demand during fiscal year 2023 and the first six months of 2024.

“Delta’s gross profit margins for the second quarter of fiscal year 2024 were only 4.3 percent compared to 14.7 percent in 2023,” said Pruban. “A significant portion of that reduction was caused by unabsorbed Production Curtailment Costs,” which is the result of reducing the output of a renewable resource below its potential.

Currently (despite filing for bankruptcy), Delta Apparel plans to continue to operate normally as it seeks buyers for its business assets.

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ABOUT THE AUTHOR …

Erin Parrott (Provided)

Erin Parrott is a Greenville, S.C. native who graduated from J. L. Mann High School in 2021. She is currently a rising senior at the University of South Carolina majoring in broadcast journalism. Got feedback or a tip for Erin? Email her here.

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2 comments

CongareeCatfish Top fan July 10, 2024 at 9:34 am

The signs have been coming for about 9 months…trickling in….the average person is closing their wallet to non-essentials like extra impulse-buy clothing, restaurant meals, movies, ticketed entertainment events….because since 2021, month after month, they have been paying on average about 750-900 bucks per month more for the exact same basket of goods and services needed to run their households. And earnings and wages have not kept pace. So they draw on their savings and use their credit cards, but only a few actually making cutbacks in their budget, Then people hit the wall…the credit card is maxxed out and all their savings depleted. The hard cuts in spending become essentially involuntary. The only thing that might take the sting out of it is Fed rate cuts, which will only help those who have decent equity in their homes to draw upon to refinance those credit cards. But there is probably alot worse to come, given our nation’s crazy Debt to GDP ratio of over 125% and the BRICKS and OPEC nations ditching the petro dollar.

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Well? July 13, 2024 at 11:42 am

Maybe Trump should have given them the MAGA hat business instead of the Chinese?

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