Advanced Sports Enterprises Inc., the parent company of Performance Bicycle and Bike Nashbar, on Friday announced it is seeking Chapter 11 protection in U.S. Bankruptcy Court.
ASE is also the parent to bicycle brands Fuji, Kestrel, SE, Breezer Bikes and Tuesday Cycles; and wholesale distributor Advanced Sports International.
The company said in a press release that “the move is intended to facilitate the company’s long-term, strategic goals of enhancing profitability and reaffirming its commitment to its employees, vendors and the communities it serves.”
“We’ve taken a lot of steps to right the business over the past 27 months,” Patrick J. Cunnane, ASE’s president and CEO, said in the release. “We have conducted an extensive review of alternatives and believe pursuing a restructuring through Chapter 11 is the best path forward to ensure ASE’s long-term success. We are thankful for the continued support of our dedicated employees, valued customers, vendors and business partners as we navigate this process, and look forward to becoming a stronger company in the coming months as a buyer/investor for the business is found.”
The parent company formed in August 2016 when ASI merged with Performance Bicycle. ASI acquired Performance Bicycle for an undisclosed amount (including a $100 million senior-secured loan from Wells Fargo Capital Finance) from North Castle Partners, a private equity firm that had taken a controlling stake in the business in 2007 and helped it grow from 74 locations to 106.
Cunnane said that ASE’s brands will carry on throughout the process but warned that layoffs and store closures were looming.
In the press release, Cunnane said ASE’s brands will carry on throughout the process but layoffs and store closures are likely. He said, “While ASE is undergoing the Chapter 11 process, we will continue with business as usual; orders will be fulfilled and Performance Bicycle stores will continue operating. Until the process of reorganizing our company before a bankruptcy court with counsel from Clear Thinking Group and Gordon Brothers is complete, I’m unable to announce any further actions. Employee layoffs and store closings are inevitable, but at this time I do not have enough information to announce those plans. My goal is to continue to work through this process and keep our business intact. My vision for ASE is to become a profitable, vertically integrated, omnichannel bicycle manufacturer, wholesaler and retailer.”