Delta Apparel filed Chapter 11 with $2M cash — its Salt Life brand sold for $39M

Delta Apparel began as a traditional textile mill in the 1960s and transformed into a vertically integrated apparel manufacturer. By the 2010s it owned a portfolio of brands including Salt Life — a beach lifestyle brand started in 2003 by two Jacksonville surfers — as well as Soffe athletic wear and Art Gun. Salt Life expanded into performance apparel, swimwear, sunglasses, bags, restaurants, and beer, operating 28 retail stores in 10 states. It employed just under 600 people before its collapse. Salt Life was organized around wholesale, e-commerce, and company-owned retail stores.

In 2022, cotton prices surged, crushing Delta Apparel's manufacturing margins. The company slashed production and sourced cheaper cotton, triggering about $15 million in severance costs. It hoped to absorb those costs in 2023 but demand collapsed instead. Net sales fell from $110.3 million to $78.9 million in a single quarter. Gross margin dropped from 14.7% to 4.3%. For fiscal year 2023, the company posted a net loss of $33.2 million.

By June 2024, Delta Apparel had over $80 million outstanding on its credit line but just over $2 million in cash. It defaulted on its loan terms and lenders cut funding. CEO Robert Humphreys resigned on June 29, 2024, and the company filed for Chapter 11 in Delaware the next day, reporting $337.8 million in assets against $244.6 million in debt. A court approved the sale of Salt Life to Iconix International and Hilco for $38.74 million in September 2024, and all 28 Salt Life retail stores in 10 states began liquidation sales. Iconix planned to pivot the brand to e-commerce and wholesale only.