100 Florida retail jobs in jeopardy as Salt Life stores hit auction block

The parent company of lifestyle clothing brand Salt Life, in a letter posted to a Florida job-cuts database, says if a proposed sale does not go through, it could shutter the brand's 16 Florida locations, including Sarasota, Estero and Lutz.

Delta Apparel, based in Duluth, Georgia, filed Chapter 11 bankruptcy June 30 in the U.S. Bankruptcy Court for the District of Delaware. The company that owns Salt Life and a handful of other subsidiaries is declaring bankruptcy after a "combination of reduced demand and difficulties obtaining raw materials have resulted in declining liquidity that Delta’s Board has been unable to counteract,” according to court filings. 

In particular, the company notes the surging prices of cotton in 2022 as a challenge that resulted in increased costs and declining liquidity. 

In addition, there were "significant reductions in demand during fiscal year 2023 and the first six months of 2024, with net sales of $78.9 million in the second quarter of fiscal year 2024 compared to $110.3 million in 2023," according to court filings. "Additionally, Delta’s gross profit margins for the second quarter of fiscal year 2024 were only 4.3% compared to 14.7% in 2023."

Days before the bankruptcy filing, on June 28, Delta Apparel entered into an asset purchase agreement with FCM Saltwater Holdings Inc. of Delaware to acquire the Salt Life assets for a total purchase price of approximately $28.03 million in cash, according to a filing with the SEC. Upon approval by the bankruptcy court, FCM Saltwater Holdings is expected to be designated as the “stalking horse” bidder. (FCM, according to SEC records, is run by Johnny N. Wilhelm, who is also a partner at Birmingham, Alabama-based Forager Capital Management. Wilhelm signed the SEC agreement, which lists him as president of FCM.) 

Delta Apparel is to conduct an auction for Salt Life on or before Aug. 20, according to the SEC filing.

“If the company is unable to conclude a transaction," Delta Apparel notified the state of Florida June 30, then it plans to lay off workers and close its locations on Aug. 29  “due to financial and business difficulties," according to a letter from Delta Apparel Chief Restructuring Officer J. Tim Pruban. The letter was posted to the Florida Commerce website late this week in accordance with the Federal Worker Adjustment and Retraining Notification Act. (Companies have to provide states with WARN notices within 60 days of making mass layoffs, according to federal law.) 

Layoffs would impact eight employees at the Estero store, seven at the Lutz shop and nine at the Sarasota location. The workers include managers, keyholders and sales associates at the retail stores. A total of 96 Delta Apparel employees statewide would lose their jobs if the sale of Salt Life does not go through, according to the filings with the state.

Salt Life started in 2003 as a decal in Jacksonville Beach and has grown into a brand selling clothing, accessories and other gear to take users from the “boat to the beach.” It has stores in multiple states, including Alabama, California, Delaware, Florida, Georgia, New Jersey, New York, South Carolina and Texas, according to its website. Several other states, including Alabama, California and South Carolina, have also posted WARN notices from Delta Apparel announcing the potential for store closures and layoffs should the sale of Salt Life not work out.