Maintaining demand for clothing styles is a key to the success of retail apparel companies.
The Covid-19 pandemic had a devastating effect on clothing retailers, as many faced store closures, supply chain issues, declining brick-and-mortar shopping, and a shift away from office attire to more casual styles for those who work at home.
Related: Distressed retail food brand files for Chapter 11 bankruptcy
The list of clothing retailers filing for bankruptcy as a result of the pandemic in 2020 was lengthy. Among the companies filing Chapter 11 and closing stores were Brooks Brothers, New York & Company, Men’s Wearhouse and Jos. A. Banks parent Tailored Brands, and J. Crew.
Several department stores that depend on clothing sales also filed for bankruptcy as a result of the effects of Covid, including J.C. Penney, Neiman Marcus, Lord & Taylor, and Stein Mart.
More recently, mall teen clothing retailer Rue 21 filed for Chapter 11 bankruptcy in May and shut down all 540 of its locations nationwide.
In addition to reduced demand for office attire with people working from home, the industry has suffered from rising costs of labor and materials. Most apparel makers were hit with a cotton price surge in 2022 that increased costs, cut into revenue, and reduced liquidity.
Related: Troubled motor oil company files for Chapter 11 bankruptcy
And now, struggling casual apparel chain Salt Life will liquidate and shut down its 28 remaining stores in 10 states after brand management company Iconix International and liquidator Hilco Consumer-Retail Group closed on the retailer’s acquisition in the Delta Apparel bankruptcy case, the companies said in a Sept. 24 statement.
People are shopping in a mall.
Image source: Shutterstock
Salt Life to liquidate and close all stores
Iconix and Hilco plan to transition the Salt Life brand to a wholesale and e-commerce business model after completing the liquidation.
Salt Life, which was founded in Jacksonville Beach, Fla., in 2003, began liquidation sales on Sept. 20 at its stores four days after Judge Laurie Selber Silverstein signed an order on Sept. 16 in the U.S. Bankruptcy Court for the District of Delaware approving Iconix and Hilco’s purchase of the retail chain.
More bankruptcy stories:
Big Lots retail chain ready to file Chapter 11 bankruptcyPopular retail product maker files for Chapter 11 bankruptcyMattress Firm rival files for Chapter 11 bankruptcy
Iconix and Hilco were the successful bidders for the Salt Life assets for $38.74 million at an Aug. 27 virtual auction.
An organized wind-down of the Salt Life stores will be completed over the next few months, including all inventory in stores and distribution centers, furniture, fixtures, and equipment. The stores will offer up to 40% discounts on t-shirts, shorts, performance clothing, hoodies, tumblers and more.
Gift cards will be accepted for the first 30 days of the sale and will stop being accepted on Oct. 20, 2024. Returns for merchandise purchased before Sept. 20 will be accepted in the first 30 days of the sale and will stop being accepted on Oct. 20.
All purchases made on or after Sept. 20 are final.
Hilco will also oversee the sale of inventory from distribution centers through a streamlined wholesale process.
Salt Life’s former parent Delta Apparel on June 30 filed for Chapter 11 protection seeking a sale of its assets after reduced demand for its products and difficulty obtaining raw materials to manufacture its goods resulted in a decline in liquidity. It also had problems raising capital to fund operations.
Related: Veteran fund manager sees world of pain coming for stocks
