Fresh Produce Buyer Plans to Save More Than Half of Stores

The Fresh Produce retail chain, which sells colorful, roomy women’s clothing that one can classify as “tourist wear,” has found a buyer who promised to keep more than half of its 27 stores alive.

In court papers, Fresh Produce officials said that an entity called Blue Stripe LLC is preparing to buy all but 12 stores out of bankruptcy protection.

Blue Stripe beat other offers at an auction on Friday for the Fresh Produce stores and online clothing line, which targets both tourists and “non-tourist customers for whom a ‘vacation state of mind’ resonates,” said Chief Financial Officer Jo Stone 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.

Fresh Produce officials did not say in court papers when going-out-of-business sales will start at the closing locations.

The closing stores 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.

Court papers did not immediately say how much Blue Stripe offered to pay. Some of that sale money could pay off some of the company’s roughly $15.1 million in debt, including a $3.9 million loan from Wells Fargo.

The offer still needs approval from Judge Michael Romero, who is scheduled to look over the details at a hearing on Monday afternoon.

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