After Bumpy Bankruptcy, Performance Bike Stores To Close After All
After a bumpy bankruptcy process, the parent company of Chapel Hill-based Performance Bicycle found a buyer. But the new owner will close all of the stores, resulting in close to 2,000 layoffs across the country.
The chain of bicycle stores was founded in Chapel Hill some three decades ago and sold to Philadelphia-based Advanced Sports Inc. two years ago. ASI combined the Performance brick and mortar stores with an online marketplace and a suite of bicycle brands, including Fuji, Kestrel, and others.
Performance had expanded to more than 100 stores, focusing on clients between the serious riders who preferred to shop at smaller boutique stores – and willing to pay a premium – and shoppers looking simply for the lowest-cost bicycle for themselves or their children.
ASI filed for Chapter 11 bankruptcy in November and then entered an auction to sell itself. Initially, Head Sports, the brand often associated with tennis and skiing, entered a winning offer for $21.5 million, but later withdrew its bid because it claimed it thought that some $9 million that ASI had remaining in cash would be included in that deal, essentially lowering its bid to $12.5 million.
At a bankruptcy hearing, ASI argued the cash was never part of the deal, and was always intended for repayment to creditors, primarily Wells Fargo. Bankruptcy Judge Benjamin Kahn oversaw proceedings and called the mix-up a "gosh awful mess."
In its initial bid, Head had said it would keep as many as 65 Performance Bicycle stores open, but when that bid changed, it also reopened the question of whether or not the stores would survive. Later, a second bidder, actually a group of three bidders that combined to call themselves Tiger Capital Group, emerged, and agreed to pay $24 million for the assets. This bid, however, would close the stores, though keep the brands and online marketplace.
Industry insiders have speculated about the failure of Performance Bicycle. Cities and communities have improved cycling lanes and trails, but some enthusiasm has waned after Lance Armstrong fell from grace.