Delta Apparel (asi/49172) is bidding goodbye to Los Angeles-based Junk Food Clothing Co. 12 years after purchasing the vintage-style, licensed-graphics T-shirt business. Delta, headquartered in Greenville, SC, has announced it will sell Junkfood Clothing to JMJD Ventures LLC for about $28 million. Delta paid more than $22.5 million to buy the business, according to California Apparel News.

Under terms of the deal, the asset sale proceeds will include $25 million in cash at closing. Promissory note payments for the remaining amount are due between June 30, 2017 and March 30, 2018. Delta noted that the transaction excludes the sale of accounts receivable and certain other assets. It also doesn’t include the assumption of trade payables and other liabilities.

According to Delta, the approximately $35 million total value of the business sold exceeds its book value and represents about 80% of Junk Food’s revenue. Net of selling expenses, Delta Apparel expects to realize a pre-tax gain of approximately $1 million on the sale, which would be recorded in its 2017 fiscal second quarter.

Delta Apparel CEO/Chairman Robert W. Humphreys noted that the Junk Food brand has more than doubled its revenue since Delta acquired it in 2005. Nonetheless, he said an increasingly challenging retail environment for “niche” players in the licensed-graphics space made now seem like the right time to sell.

“We are pleased to have the opportunity to sell Junk Food and further reduce our reliance on licensed properties,” Humphreys said. “We expect to use the proceeds from the sale to lower our debt levels, continue our share repurchase program and provide capital for further investments in strategic growth opportunities, including the Salt Life brand and Art Gun.”

In November, Delta Apparel reported that net sales for its 52-week 2016 fiscal year were $425.2 million – a 5.3% decline from its 53-week fiscal 2015. Even so, operating profit in fiscal year 2016 was $16.3 million, or $19.2 million after adding back $2.8 million in realignment-related expenses. The profit performance was up from fiscal 2015, when operating profit registered $16.1 million, or $10.5 million after excluding the gain on Delta’s sale of The Game business. In the first quarter of fiscal 2017, Delta Apparel’s sales declined to $85.3 million, a 5.4% drop from the same three-month period the prior year.