Amid Bankruptcy, Delta Apparel Asset Sell-Off Commences

Delta Apparel, a former Counselor Top 40 supplier that filed for bankruptcy this summer, has begun a sell-off, with bidders claiming assets from the firm’s Salt Life, Soffe and DTG2Go brands at an auction on Aug. 27.

Iconix International Inc. and Hilco Merchant Resources snapped up sun-and-sea beach brand Salt Life with a bid of $38.74 million. That tally was good enough to best the $37 million offer from what had been front-runner/stalking horse bidder FCM Saltwater Holdings LLC, which is tied to investment firm Forager Capital Management.

Iconix is an American brand management company that licenses brands to retailers and manufacturers, primarily in the apparel, footwear and apparel accessory industries. Its brands include Umbro, Starter, Danskin, Joe Boxer, Mudd and Mossimo.

Hilco Merchant Resources crafts liquidation and disposition events at the wholesale and retail level to monetize unwanted or underperforming inventory.

Fanatics, the global licensed sports merchandise juggernaut, issued a successful bid of nearly $258,000 to buy 1,289,168 units of Fanatics “neck pre-labeled blanks” from DTG2Go. DTG2Go was shuttered earlier this year. The former Delta Apparel business unit, which did work for Fanatics and others, had offered print-on-demand solutions in the direct-to-garment printing medium.

Soffe, a sportswear brand Delta Apparel had owned whose roots stretch back to 1946, also had certain of its assets purchased. The winning bid of $15.3 million came from Renfro LLC, described as a designer, manufacturer and marketer that specializes in socks and legwear. NG Labs (asi/41325), owner of the Boxercraft, Headsweats and Recover brands, submitted a bid of $15.1 million.

Federal Bankruptcy Court Judge Laurie Selber Silverstein is scheduled to rule on whether to approve the asset sales to the top bidders on Sept. 5.

Delta Apparel filed for bankruptcy in June, and its stock was subsequently being delisted from the publicly traded NYSE American. The company’s activewear business, which served the promotional products market and others, is reportedly being liquidated.

A run of disastrous financial results, executive departures and the appointment of a restructuring specialist provided what turned into accurate forewarning that Delta Apparel was headed for bankruptcy prior to the Chapter 11 filing.