BOSTON, MA (BRAIN)—Scott USA, Raleigh America and Marin Bikes are among the 20 largest unsecured creditors listed in the Dec. 29 bankruptcy filing of Ski Market, a 52-year-old ski and bike chain operating in the Northeast.
The family-owned Ski Market, Ltd., Inc. filed a voluntary petition for Chapter 11 bankruptcy protection last week, citing financial problems that were exacerbated by the downturn in the economy and consumer spending in 2008 and 2009.
According to documents filed in U.S. Bankruptcy Court, Ski Market owes $5.2 million to its four secured creditors—South Shore Savings Bank ($4.2 million), The Burton Corporation ($426, 409), Tecnica Group ($437, 954) and Bell Sports, Inc. ($145, 016).
The top 20 unsecured creditors include several bike companies such as Scott USA with debt of $195, 253.43—although much of that may be related to Scott’s ski business—Raleigh with a claim of $124, 295.10 and Marin Bicycles, which is due $93, 351.77
Oakley and Smith Optics are also on the list as well as numerous ski vendors. This is the second six-figure knock in less than a year for Smith Optics and Raleigh/Diamondback, both of which were impacted when Pacific Northwest retailer Joe’s Sports went bankrupt last March.
Steve Glazer, vice president of sales and marketing for Marin, said Ski Market was Marin’s largest retailer in New England and the two companies had been partners for about 15 years.
“It’s very significant for us and it will absolutely have an impact on Marin Bikes. We’re moving forward positively. We’ve brought on a new rep for the territory and brought on a new partner, Eastern Mountain Sports,” Glazer said.
Glazer said Ski Market primarily carried Marin’s city bikes. It wasn’t unusual for Ski Market to run behind on payment with summer sports vendors, as snowsports were a dominant portion of their business. Typically, Ski Market would catch up on bills during and after ski season, but that didn’t happen this year, he said. Marin had been working with Ski Market on a solution to repay the debt it owed for some time.
“Fortunately we increased our bad debt reserves in the last couple years in anticipation of a situation like this. We’re going to come out of this just fine having seen the writing on the wall, but this is a big hit,” he said.
Carine Joannou, president and chief executive officer of Jamis, another Ski Market vendor, said Jamis sent Ski Market’s debt to collections four or five months ago after having trouble collecting receivables.
Ski Market still owes Jamis money, but Joannou said the amount is not significant. Ski Market sold a limited mix of Jamis models in the $300 to $600 range and stopped buying last July.
Ski Market also did limited business with Masi/Haro in the past year.
Steve Meineke, president of Raleigh America, said while his company will feel the financial loss from the bankruptcy, it’s more painful to see an independent operator like the Ferguson family, who started the company in 1958, go under.
“After having done business with them for most of my career, that’s the hardest part for me to swallow honestly,” Meineke said.
In an affidavit filed with the court, Ski Market's president and chief executive officer Andrew Ferguson said the company had operated at a loss for the past several years and had recently closed eight of its 15 stores. The company has been actively seeking a buyer since last November and at least 15 potential purchasers have sought information on Ski Market and its operations since then.
Ski Market has asked the court to approve a sale of the company in a bidding procedure that would allow the purchase to close in 30 to 45 days. Secured creditors have first priority on Ski Market’s assets.