Advanced Sports Enterprises, the parent company of bicycle retailer Performance Bicycle, plans to eliminate 200 jobs at Performance Bicycle’s corporate office in Chatham County, according to a notice sent to the state’s Commerce Department.
The planned job cuts come after Advanced Sports Enterprises — the Philadelphia company that bought Performance Bicycle a little more than two years ago — filed for bankruptcy protection on Nov. 16. Advanced Sports has more than $100 million in debt, according to its bankruptcy filings.
Additionally, the company also plans to extend liquidation sales to all of its stores.
Last month, The News & Observer reported that only 40 of the company’s 102 stores would close. But an amended document in the bankruptcy filing raises questions as to whether the company’s 62 remaining stores, including those in North Carolina, will also close.
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Advanced Sports contracted Gordon Brothers, a Boston firm, to conduct “store closing sales” at 40 stores. On Nov. 29, according to the filing, the company amended its agreement with Gordon Brothers to include all of its stores. However, Bicycle Retailer and Industry News, a trade publication, reported on Tuesday that a bankruptcy judge ruled that Gordon Brothers cannot promote the sales at the 62 additional Performance Bicycle locations as store closing or liquidation sales — though they could be referred to as an “Inventory Clearance Sale.”
That ruling came after Advanced Sports stressed that the liquidation sales shouldn’t be taken as a direct indication that a store is closing.
The judge also said that Gordon Brothers could not bring in merchandise that wasn’t from a Performance Bicycle shop and that it had to accept gift certificates, gift cards and returns if those items were purchased before the bankruptcy, according to Bicycle Retailer.
Sales have already started at the stores, including those in North Carolina, and are expected to go until Feb. 28.
In a response to a question about whether all Performance stores are now closing, Karen Bliss, a spokeswoman for Advanced Sports, suggested that the future of the Performance brand is still up in the air.
“Currently, this is more about inventory liquidation rather than store closure,” Bliss said in an email. “It is part of a carefully considered strategy with our investment banker to liquidate the inventory while preserving the opportunity for a sale of the company and a retail platform to the highest and best bidder in an action process under the authority of the bankruptcy court.
“Whether a store is ultimately closed is a function of concessions that we may obtain from landlords and the marketplace of potential bidders,” Bliss added. “This process will enable us to (determine) which stores are the most valuable to the business. Which stores will be ultimately rejected and not sold is to be determined.”
The Worker Adjustment and Retraining Notification was submitted to the Commerce Department on Nov. 27 “out of an abundance of caution,” according to a copy of the letter from Advanced Sports.
“(Advanced) is making plans to restructure its workforce and potentially lay off up to an estimated 200 employees from its corporate facility in Chapel Hill (Chatham County), N.C., beginning on or about Jan. 15, 2019,” Advanced Sports CEO Patrick Cunnane wrote to the Commerce Department.
Bliss added that the Chatham County office currently has approximately 150 employees. A WARN Act report was also filed for its Philadelphia offices, where it has around 65 employees, she said. According to the Pennsylvania Department of Labor & Industry, 60 jobs are planned to be cut in Philadelphia.
Cunnane also wrote in the letter that the company is making every effort to avoid the layoffs but “the heightened possibility of these layoffs makes this notice appropriate.”
The types of jobs being eliminated ranged from top vice presidents to warehouse associates, according to the notice. Performance Bicycle’s Chatham County offices are at 144 Old Lystra Road.
Along with Performance Bicycle, Advanced Sports also owns the bike brands Fuji, Kestrel, SE, Breezer Bikes and Tuesday Cycles as well as the retailer Bike Nashbar.
Performance Bicycle’s history goes back more than 30 years, when it started as a bicycle catalog company. It has around 2,000 employees. Bicycle Retailer and Industry News estimated that Performance’s annual revenue was between $275 million and $280 million, when it was purchased in 2016.