The roughly $7 million sale of the Fresh Produce retail chain, which sells vacation-inspired clothing to women, got approval from a bankruptcy judge.
In a court order signed Tuesday, Judge Michael Romero approved the chain’s sale to an investor group that includes Fresh Produce’s existing owners, Thom and Mary Ellen Vernon.
The deal is expected to keep more than half of Fresh Produce’s 27 stores open. The retailer targets both tourists and “non-tourist customers for whom a ‘vacation state of mind’ resonates,” Chief Financial Officer Jo Stone said in earlier documents filed in in U.S. Bankruptcy Court in Denver.
The Boulder, Colo., chain filed for chapter 11 protection on April 4, blaming an “aggressive overexpansion” and high turnover in key positions. As the company began to struggle last year, it closed a store, laid off workers and cut employee pay by 10%.
Fresh Produce employed 270 people at the time of its bankruptcy and made $37.9 million in sales during its most recent fiscal year.
Amid the troubles, Fresh Produce officials began looking for buyers. At an auction held on Friday, an entity called Blue Stripe LLC beat other offers with a proposal to purchase all but 12 stores. The investor group includes the Vernons, TJ Heyman, Jane McConnell, William and Anna Teneblatt, Anne Krizman and Ms. Stone. The purchase price is listed in court papers as $7.1 million.
The fate of the remaining 12 stores, which are expected to close, could be laid out at a May 22 hearing. Fresh Produce officials did not say in court papers when going-out-of-business sales could begin at those locations.
The stores expected to close are located in Scottsdale, Ariz.; Naples, Fla.; Myrtle Beach, S.C.; West Palm Beach, Fla.; Destin, Fla.; Anaheim, Calif.; Pasadena, Calif.; and the Villages, Fla., according to a Fresh Produce lawyer. All three locations in Georgia—Marietta, St. Simons and Buford—are also set to close.
Some of the money from the company’s sale could pay off some of the company’s roughly $15.1 million in debt, including a $3.9 million loan from Wells Fargo.
Fresh Produce got its start at the 1984 Summer Olympics in Los Angeles selling white T-shirts with custom pastel designs that paired with the event’s the color theme. Today, roughly 80% of Fresh Produce merchandise is made in the U.S. using fabrics that are also made here, according to its website.
Fresh Produce also sells clothing online and through roughly 400 wholesale customers. Most merchandise moves though a distribution center located in Gardena, Calif.
Write to Katy Stech at [email protected]. Follow her on Twitter at @KatyStech