Delta Apparel has filed for Chapter 11 bankruptcy and is planning to sell its beach clothing brand Salt Life for approximately $28 million.
As part of the filing, the company will continue business operations as it pursues a sale of its assets, according to the Wall Street Journal. The retailer said it had faced significant market, operational and liquidity challenges.
Delta Apparel plans to sell certain assets related to its Salt Life branded products to FCM Saltwater Holdings, which has agreed to act as the ‘stalking horse bidder’ in a court-supervised auction.
The company expects its shares to be delisted from the NYSE American as a result of the bankruptcy filing. Its share price plunged 33 per cent to 39 cents on Monday.
The Duluth, Georgia-based firm, which also owns the Delta and Soffe brands, posted net sales of $78.9 million for the quarter ended March 30, down from $110.3 million in the prior year. Both its Delta Group segment and Salt Life Group segment recorded declines.
Net loss for the period increased to $36.3 million, while total net debt, including capital lease financing and cash on hand, was $126.2 million.
