Delta Apparel Inc., the Greenville-based apparel firm and parent company of renowned brand Salt Life, has officially filed for bankruptcy protection. The company’s current financial pressures are evident from its assets valued at $337.8 million and the substantial debts amounting to $244.5 million. Trading its shares on the New York Stock Exchange has also been put on pause.
As the company grapples with fiscal dilemmas prompted mainly by the COVID-19 pandemic, it hopes to negotiate a reasonable repayment plan with its creditors. Reduced consumer demands and retail limitations negatively affect the company’s performance and force it to consider divesting its Salt Life business.
This potential sale of Salt Life, which houses multiple retail locations in South Carolina, comes amid challenging times for Delta Apparel. If a feasible deal is not secure, these retail stores may entirely close—an unsettling reality reflected in the recent job loss notifications issued to the S.C. Department of Employment and Workforce.
Founded in the mid-1980s as part of Delta Woodside Industries Inc., Delta Apparel was once on the Forbes 500 list but was declared bankrupt in 2006 due to intense international competition.
Delta Apparel bankruptcy: navigating pandemic woes
However, with careful efforts and a strategic focus, the company, headquartered in Greenville, South Carolina, recovered and blossomed into a multinational entity that offers apparel ranging from activewear to lifestyle clothing.
Earlier in the year, Delta Apparel made the tough decision to cease operations in Mexico and Honduras, resulting in the loss of livelihood for over 2,400 employees. This event further augmented the firm’s financial complications. With no equivalent of bankruptcy protection where its overseas operations were conducted, the company struggled to fulfill its financial responsibilities, and a severance pay issue worth $15 million remained unaddressed.
The company’s plight was further hit by the change in leadership, with CEO Robert Humphreys resigning in June and J. Tim Pruban taking over as the chief restructuring officer. Pruban indicated that despite decreasing demands and pandemic-induced market shifts, the company is actively striving to bring its finances back on track, even as substantial uncertainties regarding its future persist.
