A massive beer brand has now filed an unexpected bankruptcy ever since the pandemic made its sales and revenue plummet.
Salt Life, which is owned by Delta Apparel, has just recently filed a Chapter 11 bankruptcy and is a lifestyle apparel brand that deals with swim wear and related attire.
“Our brand originated as a decal and we have sold over 2 million of these to our loyal customers. Today, Salt Life is more than just a logo; it represents a passion for the ocean, the salt air, and most importantly, a way of life. Founded by four watermen from Jacksonville Beach, Fla., Salt Life has captured the attention of many ocean enthusiasts across the world and became one of today’s leading lifestyle brands,” the company shared on its website.
“Salt Life’s team of avid watermen has helped put Salt Life’s apparel to the test, and it is designed to withstand the harsh environment that comes with the territory of saltwater sports,” the company added. “…Whether you’re going offshore fishing for marlin, diving to explore a wreck, or surfing gnarly waves, our distinctive dedication to offer quality products ranging from apparel, performance gear, sunglasses, accessories, and even the ubiquitous decal, we have something for everyone that is living the Salt Life.“
Salt Life also owns a beer brand under the name of Salt Life Beverage LLC, who’s website has now been taken down.
Although the company’s website has been taken down, info on the beer can still be found on the Total Wine website: “United States, Florida: Salt Life lager is a new interpretation of the classic American lager. Our beer is inspired by those who live the watermen’s lifestyle. This is the perfect American lager; crisp, clean, and refreshing,” it shared.
The Covid pandemic had hurt the craft beer business in a number of ways such as, having avid beer drinkers stuck at home and brewery/pub crawls not allowing customers due to social distancing rules.
“According to data from Beer Marketer’s Insights (BMI), U.S. beer shipments were expected to fall to their lowest level in 25 years by the end of 2023 — after dropping more than 5% in the first three quarters of the year,” Convenience.org reported.
Salt Life Beverage LLC filed for bankruptcy on June 30, the same day as Delta Apparel (DLA) , which owns the Salt Life clothing brand.
Salt Life Beverages LLC’s bankruptcy was mostly collateral thanks to its parent company’s very own bankruptcy.
Both companies filed in the District of Delaware, reports The Street.
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Also Read: Another Mall Clothing Retailer Now At High Risk of Bankruptcy
Other Economy News Today
An essential company now files a surprising bankruptcy after miscalculating demand for its inventory after the Covid-19 pandemic.
Supply Source Enterprises, a leading provider of branded and private label cleaning products and personal protective equipment, on May 21 filed for Chapter 11 protection to seek a sale of its assets.
Supply Source brands include The Safety Zone and Impact Products.
The Guilford, Connecticut debtor listed $50 million to $100 million in assets in its petition and $180 million in funded debt, which includes $80 million owed on a term loan credit facility, $60 million owed on an asset-based loan, and about $40 million in unsecured debt.
Before the Covid-19 pandemic, which generated huge demand for cleaning supplies and personal protective equipment in 2020, Supply Source had been consistently profitable with stable single-digit growth, according to a declaration from the debtor’s Chief Restructuring Officer Thomas Studebaker.
Once the pandemic hit in 2020, the debtor had substantial growth due to high demand for safety, hygiene and sanitation products
The debtor reported adjusted Ebitda of $93 million in 2020 which was nearly a 300% increase over the previous year.
However, the company’s financial performance deteriorated in subsequent years.
Based on the unprecedented demand in 2020, the company commissioned an industry study in early 2021 that concluded that the Covid-19 pandemic would fundamentally change the cleaning supplies and protective equipment industry and market for its products.
The study also estimated that the company’s Covid-related growth would likely be sustained through 2024.
In contemplation of continued customer demand at elevated prices, based on the study’s data, the debtor increased purchases of inventory even though the costs were higher due to supply chain constraints during the pandemic.
Despite the study’s assurance that growth would be sustained for years, the pandemic’s positive effect on the market faded by the end of 2021 and demand for PPE decreased to normal rates, reports TheStreet.
The reduction in demand led to large amounts of excess inventory that the company could not sell in the same quantities and prices.
The excess inventory forced the debtor to secure additional storage space, which increased storage costs.
These factors tightened the company’s liquidity and led to a decline in annual revenue in 2023 by 26% from 2022, resulting in a negative 2023 Ebitda of $13 million.
The debtor’s liquidity issues led to it being overdrawn on its asset-based loan facility by $30 million.
The ABL lender in February 2024 swept the debtor’s bank accounts, further impacting the company’s financial distress.
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