A Georgia company known for its beachwear brand Salt Life and activewear label Soffe could permanently close four North Carolina operations in three counties after filing bankruptcy, resulting in the loss of 448 jobs, according to paperwork filed with the state.
Delta Apparel, based in Duluth, Georgia, filed for Chapter 11 bankruptcy protection in Delaware on June 30. It is seeking a new owner.
“If the company is unable to conclude a suitable transaction, the planned closing will be permanent,” according to a notice filed with the Department of Commerce.
“The Company was not able to provide earlier notice as it was actively seeking a transaction to enable the continuation of operations, and believed in good faith that the potential for business disruption accompanying notice would have impaired its ability to obtain such a transaction,” the notice stated.
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The company filed paperwork with North Carolina that same day announcing it would permanently close operations in Cabarrus, Cumberland and Robeson counties. Job losses total 22 in Cabarrus County, a manufacturing and distribution site in Cumberland County totaling 380 jobs and 46 jobs in Robeson County at a manufacturing site in Rowland.
The effective date for layoffs at all four sites is Aug. 29, according to paperwork filed with the N.C. Department of Commerce.
Details of the layoffs were not immediately available.
Prior to its Chapter 11 filing, Delta Apparel entered into an asset purchase agreement with FCM Saltwater Holdings (Birmingham, Alabama-based Forager Capital Management) to acquire the marketing, sourcing, licensing, and selling of its Salt Life branded products for a total purchase price of approximately $28.03 million in cash, according to Bloomberg.
The purchase price is subject to adjustment after closing of the Salt Life transaction based on final net accounts receivable and certain inventory calculations.
Upon bankruptcy court approval FCM Saltwater Holdings 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, according to Bloomberg, meaning it will set the floor price for the brand.
Delta Apparel listed roughly $337.8 million in assets and $244.5 million in total debt, according to the company’s bankruptcy petition, as reported by Bloomberg. An increase in cotton prices and other raw materials as well as diminished demand for its products contributed to its financial troubles, according to court papers. The company’s stock was lower by as much as 37% in premarket trading before being halted.
The company reported $415.3 million in sales in 2023, compared to $484.9 million the year before.
For more on this and other business stories from across North Carolina, visit Business North Carolina’s website: https://businessnc.com
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