Bankrupt Performance Bicycle starts store-closing sales; Philly warehouse gets layoff warning
"We are working to stabilize" an import business strained by high debt, a slow off-season, and Trump tariffs, said Patrick Cunnane, whose wife, Democrat Madeleine Dean, was elected to Congress to represent Montgomery County.
Advanced Sports Enterprises, the bicycle import, distribution, and retail group headed by Montgomery County entrepreneur Patrick Cunnane, has made plans for store-closing sales at all 102 of its Performance Bicycle retail stores.
These include area locations at 1740 E. Lancaster Ave. in Paoli and 1300 S. Columbus Blvd. in South Philly as well as 60 other sites that weren't on an initial closing list, including Wilmington and Allentown.
The everything-must-go markdowns for these additional stores began Saturday. The company's brands include Fuji, Kestrel, SE, Breezer, and Tuesday bicycles.
Advanced Sports Enterprises (ASE) and its affiliates filed for bankruptcy protection in Durham, N.C., where the group is based, on Nov. 16, the week after Cunnane's wife, Democratic state Rep. Madeleine Dean, was elected to Congress by a landslide margin to represent Montgomery County. The company cited high financing costs on debts totaling more than $100 million to Wells Fargo and other banks, Chinese bike makers, and Canadian pension fund managers, along with a seasonal drop in bike sales.
The bankruptcy also includes Advanced Sports Inc., whose offices and two warehouses are in Northeast Philadelphia. On Friday the Pennsylvania Department of Labor disclosed plans by Advanced Sports Inc. to lay off 60 of the affiliate's 83 employees.
But that doesn't necessarily mean warehouses or offices are closing, Cunnane said in an email: "In compliance with legal requirements, we sent out WARN [U.S. Worker Adjustment and Retraining Act] letters to employees, which is a formality that the process requires. We are working to stabilize and improve the business and support local jobs along the way."
According to bankruptcy filings, ASE and its consultants, including Gordon Brothers Retail Partners LLC and its affiliates, are looking for buyers for all ASE assets, and have fielded inquiries from firms that might keep some of the operations going, as well as liquidators who would strip and sell remaining inventory.
The original 40 store sales, including those at the three Performance stores in Maryland and some sites in California, Florida, Texas and Colorado, will run through Jan. 27. The 62 other sales, including the stores in the Philadelphia area and in the Southeast, Midwest and West, will run through Feb. 28. The chain plans to cancel store leases and supplier contracts. Canceling supplier contracts could allow the company to sell its bike brands for higher prices, according to bankruptcy filings.
In all, ASE employed 1,944 on the day of the bankruptcy filing, mostly in the Performance Bicycle stores, which the company acquired in 2016 when the chain was among its largest debtors.
Dean had cited her husband's role as an employer during her campaign last summer. Cunnane testified in federal hearings in August that tariffs imposed on Chinese sporting-goods imports by President Trump are driving up costs for his company and other importers, and predicted that U.S. retailers will buy bikes from Vietnam and other low-wage rivals of China, instead of opening U.S. factories as Trump promised. Rep.-elect Dean has also criticized Trump trade policy.
The Inquirer has confirmed that Taiwan securities regulators are investigating a $20 million investment in Advanced Sports Enterprises last January by one of ASE's largest creditors, publicly traded Ideal Bicycle Company, which makes bikes in China and other countries for sale by ASE affiliates.
The owners of Ideal, and the North Carolina lawyers they hired to represent them in bankruptcy court, haven't responded to inquiries seeking comment.