Active Ride Shop Files For Chapter 11 Protection
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- March 23 2009
- 6,849 views
- 26 comments
Active Ride Shop President Shane Wallace accepts Mens Retailer of the Year 11 months ago.
Active Ride Shop announced today that is has filed for a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code in the county of Riverside.
Industry consultant Jeff Harbaugh weighs in on what filing for Chapter 11 Bankruptcy is and what it means for a company such as Active Ride Shop. Read his in-depth analysis HERE.
As of today, Active Ride Shop’s Web site only lists 22 open stores under its retail locations section. Here’s the official press release:
“Mira Loma, CA, March 23rd, 2009 - 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 Winthrop 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 the 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 company can be sufficiently stocked for the spring selling season. The restructuring plan will position Active Ride Shop with a stronger business foundation, an improved multi-channel distribution source for it vendors, 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 efficient 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 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 changes to our business and satisfaction and value to our customers,” concluded Wallace.
About Active:
Established in 1989, Active Ride Shop maintains its position among the top retailers and mail order businesses in the action sports industry. Awarded Surf Industry (SIMA) Men’s Retailer of the Year (2008), #1 Specialty Retailer by the Future Trade, #36 on DNR’s “top 50 most influential menswear retailers.” Active has locations throughout Southern California and delivers catalogs to action sports enthusiasts nationwide. Active Ride Shop sponsors the most elite skateboarders and snowboarders in the world, and is proud of its offering of the finest brands an hottest trends in the industry. For more information about Active Ride Shop, visit www.activerideshop.com.
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March 23rd, 2009 at 5:02 pm
LOOKS LIKE SOMEONE DOESN’T WANT TO PAY THEIR BILLS, SORRY GUYS
March 24th, 2009 at 7:36 am
Wow. So it’s possible to be SIMA Men’s Retailer of the Year at Surf Summit, then bankrupt before your next trip to Cabo. That’s pretty heavy. Will be interesting to see the fallout from this.
March 24th, 2009 at 7:48 am
My shop was put out of business because these guys came to my neighborhood, opened a store, and now its closed. Rad. CAnt say I’m not stoked to hear this…
March 24th, 2009 at 7:06 pm
I hate to say it but it’s kind of nice to see these “core” shops overgrow themselves and get greedy. They don’t realize that there are so many different specific markets across every different area. Hopefully, you know who is next, and local shops can thrive again.
March 24th, 2009 at 8:02 pm
Wow that’s so “extreme” - if U ain’t “core” I guess U get shown the door…. and I hope it hits ya’ dead in the ASS on the way out…..maybe U can ask Obabma for some bailout ca$h? He’s givin’ it 2 everyone else why not Active haha…..
March 24th, 2009 at 9:22 pm
Two words…Spell Checker!
One more word…Grammar!
Official press release…WOW!
While reorganizing their finances, the author of this PR should be terminated as another cost savings measure.
March 25th, 2009 at 9:05 am
Lets put all the big financial issues to the side….. I dont know who’s bright idea over there at Mira Loma to open a store in downtown HB besides jacks and expects it to do good. Those guys didn’t even ruffle any feathers to make things hard for them. I wouldn’t imagine if you brought those guys out of the cage to start fucking shit up. Making business decisions like that def ain’t going to take you far.
March 26th, 2009 at 7:03 pm
Looks like somebody at TW Biz saw my post and fixed the butchered PR. And oh by the way…The mfg’s need to put a stop to the price slashing of current model product on Active’s website!
July 21st, 2009 at 12:11 am
SHOULD HAVE STUCK WITH MAILORDER INSTEAD OF RUNNING OUT ALL THE MOM AND POP CORE SHOPS OUT OF BUSINESS! ACTIVE IS LIKE BAD LOCUST!
July 21st, 2009 at 8:05 am
its a shame to see people loose their jobs yes but its also a shame to see reps go unpaid because their commissions never came in due to NSF checks or just lack of payment. guess thats what happens when everyone is on the A train especially your sales manager! Down with the cool kid club
October 29th, 2009 at 4:17 am
Sounds like your business wasn't strong enough. But if you blame your competitor it's easier to sleep at night. It wasn't your fault you owned a crappy shop, it's Active's fault for owning a better one. Right?
October 29th, 2009 at 4:21 am
yeah, "mom and pop core shops" there's nothing "core" about your mom and dad owning your lousy skate shop that can't attract business cause you don't have customer service. All you Active haters crack me up. Your shop sucked so it was Active's fault.