Active Ride Shop Files For Chapter 11 Protection
March 24, 2009 – 11:30 pm PT by MeTags: Active Ride Shop, Bankruptcy, Chapter 11 —
I never would have thought that the most recognized Skate Empire in this country would have financial troubles. I drive long distances every day and seeing more and more kids on the streets skateboarding in every kind of socioeconomic setting lead me to the conclusion that despite being in a recession, the skateboarding industry should be doing pretty well. But I guess it’s a wake up call when the most community oriented skate shop on the west coast is going into Chapter 11. Check out the press release below.
Active Ride Shop today announced that it has filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court in Riverside. The company is focusing on executing a comprehensive corporate restructuring plan without interruption to business operations.
Active Ride Shop recently announced that it was taking action to address the company’s financial challenges. Alongside the strategic counsel provided by Marc Winthrop, of Wintrhop Couchot, one of Southern California’s leading bankruptcy law firms and Stephen Bell, of Phoenix Group Advisory Services, LLC, a professional financial and operational advisory firm, the company has determined that it would be in teh best interest of its stakeholders to file for reorganization protection under Chapter 11.
Operating under the protection of Chapter 11 will provide the company’s vendors with assurances that they will be paid for merchandise the company receives post-filing so the ocmpany can be sufficiently stocked for the spring selling season. The restructuring plan will position Active Ride Shop with a stronger business foundation, an imporved multi-channel distribution source for it svendors, and a more meaningful offering for its customers.
The company recognizes that, to achieve these objectives, there is a critical need to create a more efiicent operation with a reduced cost structure. As previously announced, the company has closed 8 under-performing retail locations. This week, the company took action to realign its corporate support structure alongside the smaller store base, which will include 21 retail stores as well its e-commerce storefront. The store closings and corporate workforce reductions will result in combined workforce compensation and related costs in excess of 30%. Further, as part of its restructuring efforts, the company will continue to evaluate the productivity of all assets, analyze additional cost-cutting initiatives and research strategic alternatives to maximize the value of the business.
John Wallace, chief executive officer and founder of Active Ride Shop, said “The swift and dramatic downturn in the local economy had a major impact on our business in the 3rd and 4th quarters of 2008. In combination with the robust growth and expansion we experienced during the previous 24 months, this perfect storm of economic retraction left us with no other option.” He continued, “The preemptive cost cutting initiatives that we took throughout 2008 were not enough to protect our investments without filing for Chapter 11 reorganization protection.”
“We appreciate the support we have received from our vendors and suppliers during this downturn. With this support, we have every reason to believe that we will emerge from Chapter 11 witha stronger business and a more impactful market presence. Most importantly, Active Ride Shop will be restored to solid financial footing as a direct result of this support.”
“The recent work force reductions and downsizing activities have not been easy fo rthe employees of Active Ride Shop which makes us even more appreciative of their dedication and loyalty. We are especially addened at the loss of employment for many long term employees. The impact of these decisions is far reaching, and we deeply regret the effect this has on our employees and their families.
“We move forward with this reorganization with the firm knowledge that the steps we are taking will bring lasting changes to our busines and satisfaction and value to our customers,” concluded Wallace.
