Geneva Watch Group, which makes the Freestyle sports watch line, has filed for Chapter 11 Bankruptcy Protection and plans on selling the company.
According to the filing in New York's bankruptcy court, its assets total around $41 million and liabilities, $98 million.
Founded in 1974, Geneva Watch, also known as Advance Watch Co., also operates Gametime, which provides team sports logo watches for the NFL, MLB, NBA, NHL, and major universities. Much of its business consists of making timepieces under license for fashion and lifestyle brands such as Kenneth Cole New York, Kenneth Cole Reaction, Sperry Top-Sider, Tommy Bahama, Ted Baker London and Zoo York. It formerly held the watch licenses for Speedo and C9 by Champion.
The company has already lined up a $15 million lead bid for its assets from an affiliate of China's Time Watch Investments Ltd., according to Jeffrey Gregg, Geneva's chief restructuring officer.
In an affidavit, Gregg said the company's sales peaked at $221 million in 2012, but began declining in 2013 due to the loss of two licensed agreements with Betsey Johnson and Dolce & Gabbana.
The company continued to lose revenue and also began incurring significant operating losses in 2014 and 2015 due to operational challenges, weakness in the domestic watch market, failed new product launches, and the failure to align overhead costs to regain profitability. Additionally, the company was hampered by significant cost overruns and performance failures in connection with the failure to effectively manage the transition to a new ERP system in 2014. Another approximately $7 million of losses that accumulated during calendar year 2014 were discovered in late 2014 as a result of financial
In June 2015, the company's Italian parent, Binda Italy, became the subject of insolvency proceedings in Italy and the company was no longer able to access financing from Binda Italy. Also in June, the company’s Far East subsidiary shut down operations after the division’s management received “personal threats believed to relate
to the past due amounts owed to the Far East Companies’ suppliers.” The
majority of the company’s inventory held by the Far East companies was
lost or destroyed and significant damage was done to the IT systems
following the commencement of the Hong Kong liquidation proceedings in
Time Watch Investments Ltd., based in Hong Kong, will act as a stalking horse bidder as part of an auction tentatively being scheduled for Nov. 9.