A group of investors gathered under the name Ryderz Compound Inc. has purchased nearly all of No Fear’s three dozen stores along the West Coast with plans to continue selling its edgy clothing collection and racing gear. The group’s $3.1 million bankruptcy auction purchase will also keep many of the chain’s more than 325 workers employed.
The California retailer’s stores and inventory were up for sale after No Fear’s parent company, No Fear Retail Stores Inc., for bankruptcy protection in late February, blaming the economic crisis for hitting the company’s “blue collar” target market hard. But Eric Baker, president of freshly formed Ryderz Compound Retail Stores, said that the sputtering economy didn’t derail the motocross market’s loyal followers.
“Even with the actual sales of new motorcycles down, the enthusiasm and the influence that the sport has on the individual customer hasn’t changed,” said Baker, who once oversaw No Fear’s retail operations. “There’s a strong base.”
Ryderz has permission to use the No Fear logo for another six months, but the company is negotiating to extend that selling period with an affiliate of British retailer Sports Direct International PLC that purchased the brand last week, Baker said.
Baker said he hopes to expand store offerings beyond what No Fear currently sells, adding other punkish brands like Fox Racing, DC and Volcom. Half of what No Fear stores sell falls under the house brand.
Ryderz’s bid won bankruptcy-court approval late Wednesday, just ahead of liquidators who were preparing to immediately close down the chain.
The sales take control of the 21-year-old company away from founding brothers Mark and Brian Simo, who carefully tended to the clothing line’s reputation to ensure it become “synonymous with an attitude of irreverent and spirited engagement,” according to court documents. The brand’s popularity grew explosively in its first years, with annual revenue reaching $140 million in 1995 as No Fear inventory flew off department-store shelves.
The Simo Brothers later pushed No Fear to open its own stores and target the motocross fans, distinguishing it from the overcrowded teenage retail market that offered plenty for skateboarders and surfers. That bent led the company to sponsor racing athletes like King of Supercross Jeremy McGrath, X Games champion Travis Pastrana and NASCAR convert Ricky Carmichael, and it later developed No Fear MX, the company’s edgy racing brand of protective sports equipment.Retailer No Fear Retail Continuing Under New Name
Employees of retailer No Fear Retail Stores Inc. escaped the loss of their jobs when a going-concern buyer beat out liquidators at auction.
Ryderz Compound Inc. bought the inventory and store operations under a contract valued at $3.08 million. The sale was completed last week, court papers said. In bidding against the liquidators, the company and the creditors’ committee gave Ryderz value for saving jobs.
In a separate auction, the trademarks and intellectual property were purchased under a contract with Brands Holdings Ltd. valued at $11.1 million. The sale to Brands was completed June 25. As the so-called stalking-horse bidder, Brands opened the auction with a bid of $6.25 million.
No Fear, based in Carlsbad, California, decided to sell the business quickly because “sales results have been lower than projected.”
The closely held retailer entered Chapter 11 in February with 41 stores in seven southwestern states, including 60 percent in California. It sold what it called “action wear” to teenagers and young adults, with an emphasis on “blue collar” males. The brands include No Fear and So Cal.
No Fear filed lists showing assets of $25.5 million and debt totaling $12.5 million, including $1.2 million in secured claims.
The case is In re No Fear Retail Stores Inc., 11-02896, U.S. Bankruptcy Court, Southern District of California (San Diego).