WFCN —
A troubled apparel company has recently declared painful bankruptcy due to declining sales and shifting client preferences.
While not a very well-known firm, Callaway, Perry Ellis, Soffe Apparel, Burnside, and Salt Life are just a few of the well-known clothing companies that are owned by Delta Apparel.
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Operating under the name Delta Apparel, the company is a wholesaler.
The company debuted on the stock market in June 2000 and reached a peak price of $34 in 2021.
“Delta Apparel has worked to connect individuals with what they love for more than a century. The company stated on its website, “We strive hard every day to stay on the cutting edge of the marketplace by delivering the quality, selection, and innovation you and your customers want — at extremely competitive prices.”
Your one-stop shop for all things clothing and accessories is Delta Apparel. You can find everything at Delta Apparel, including durable workwear, business attire, athletic and fitness gear, and your new favorite t-shirt.
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Since its shares ended at 58 cents on Friday, Delta Apparel’s financial situation has been worsening, and its second-quarter reports showed even more alarming figures:
From $5.3 million in the same time last year to $24.4 million, operating deficit grew.
Due mostly to production reductions in the Delta Group division, gross margins decreased to 4.3% from 14.7% in the same time last year.
Compared to $110.3 million in sales a year earlier, net sales decreased by 28.4% to $78.9 million.
As of March 30, 2024, Delta Apparel reported having $11.8 million in cash on hand and available under its U.S. revolving credit facility. This is an increase of $4.4 million from December 2023 and a drop of $2.4 million from September 2023.
On June 30, Delta Apparel filed for Chapter 11 bankruptcy in the Delaware bankruptcy court of the United States.
The business has disclosed 200–299 creditors, each with assets and obligations ranging from $100 million to $500 million.
According to the bankruptcy petition, the company’s total assets as of June 1 were $337.8 million, while its total liabilities were $244.5 million.
With a debt of more than $22 million, Park Mills is Delta Apparel’s biggest creditor.
“Delta Apparel’s primary issue is the sharp fall in demand for several of its items. GlobalData retail analyst Neil Saunders told Just Style that “the retailers it sells to through wholesale have cut back on inventory and orders as customers have reduced buying activity.”
According to The Street, the apparel company has not released a complete bankruptcy plan and has not commented publicly on its current business practices.
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