Tuesday, March 31, 2009

Active Ride Shop Files for Chapter 11 Bankruptcy Protection


A sign of the times. Here is an excerpt from Active Ride Shop's press release issued last Monday regarding their Chapter 11 Bankruptcy filing:

"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.

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. 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.”

The company projects a $7.7 million loss for the fiscal year ending today. 

(via. OCRegister)