Marine Brand Salt Life Has Been Sold

Certain assets of Salt Life, including its intellectual property, have been sold to Iconix International and Hilco Merchant Resources.

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The two acquired the brand assets last week at a Delaware bankruptcy court auction, according to a source close to Hilco. A court hearing is slated for Thursday, when Bankruptcy Court Judge Laurie Selber Silverstein is expected to give her approval.

The beachwear brand was put up for sale after its parent, Delta Apparel, filed for bankruptcy court protection on June 30. The company warned in a regulatory filing with the Securities and Exchange Commission (SEC) nearly two weeks before the filing that it had a going-concern problem . At the time of the filing, Delta had already inked a $28-million asset purchase agreement with FCM Saltwater Holdings Inc. for the brand. That agreement put FCM in the pole position to acquire Salt Life as the stalking horse bidder in a bankruptcy court auction.

While auctions raise the possibility that better offers could be forthcoming, the likelihood that a stalking horse bidder could end up out of the picture isn’t all that common. But brand management firms such as Iconix are always on the hunt for goods brands that resonate with consumers, and still-relevant brands like Salt Life that have a dedicated and loyal consumer base don’t come along often. That pushed the bidding for Salt Life up to $38.7 million, or $1.7 million more than FCM’s final offer.

Delta paid $15 million to acquire the beach lifestyle brand in 2013. It disclosed in October 2023 that an unsolicited offer was made for the brand, although terms were not disclosed. At the time of the acquisition, the brand had annual volume of $20 million. When the offer for Salt Life was received, Delta had grown the brand to a profitable business with over $60 million in revenue through a combination of over 1,700 wholesale doors across 48 states and direct-to-consumer through the company website and 25 branded retail stores.

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As a brand management firm, Iconix will own the IP assets and—because it’s not an operator—will license out the brand categories. Formerly known as Iconix Brand Group Inc., Iconix was sold to Lancer Capital for $585 million in a take-private deal in June 2021. Some of the brands under its umbrella include Artful Dodger, Ed Hardy, Umbro, Starter, and Lee Cooper, among others. Its most recent acquisition was a majority stake in British streetwear label Hoodrich last November. Sales of brands under Iconix’ umbrella reach 100 countries worldwide across 14 territories.

Hilco Merchant Resources LLC is an arm of Hilco Global. It has deep expertise across retail sectors that range from analytical, advisory, asset monetization, and capital investment. While Hilco is known particularly for its expertise in asset disposition, Hilco Merchant was founded in 2001 with a focus on providing strategic advisory services to retailers and consumer goods firms. Once court approval is granted, Hilco is expected to begin the liquidation of Salt Life’s inventory and store assets.

Delta is a 121-year-old firm based in Duluth, Ga., that posted a net loss of $33.2 million for the fiscal year ended Sept. 30. Sales had declined 14.3 percent to $415.4 million. While the company had been streamlining operations, including an exit from its Mexican operations, a number of headwinds—including higher cotton costs—continued to work against the struggling firm. The decision to file a Chapter 11 petition followed the company’s inability to obtain the additional financing needed to continue operations.

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