Active Ride Shop filed a voluntary petition for reorganization under Chapter 11 of the United States Bankruptcy Code in the U.S. Bankruptcy Court in Riverside, CA. In a statement, the skate chain, based in Mira Loma, CA, said it is closing eight stores and plans 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%, the company said. 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.
The company, which has locations throughout Southern California, said it “recognizes that, to achieve these objectives, there is a critical need to create a more efficient operation with a reduced cost structure.”
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. 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 with a 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 for the employees of Active Ride Shop which makes us even more appreciative of their dedication and loyalty. We are especially saddened 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 positive changes to our business and satisfaction and value to our customers,” concluded Wallace.Active Ride Shop also noted that it had hired Marc Winthrop, of Winthrop Couchot, one of Southern California's bankruptcy law firms and Stephen Bell, of Phoenix Group Advisory Services, LLC, a professional financial and operational advisory firm. Active Ride Shop also noted that 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 company can be sufficiently stocked for the spring selling season.”
Established in 1989, Active Ride Shop has become one of the top retailers and mail-order businesses in the action sports industry. it was awarded Surf Industry (SIMA) Men's Retailer of the Year Award (2008), #1 Specialty Retailer by the Future Trade, #36 on DNR's top 50 most influential menswear retailers. Active Ride Shop also sponsors elite skateboarders and snowboarders.