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Over 100 laid off as ASE sale nears completion; remaining Performance stores to shutter

Published February 7, 2019

CHAPEL HILL, N.C. (BRAIN) — About 95 employees at ASE's facility here — the longtime headquarters for the company's Performance retail division — were laid off Wednesday as it became near certain that the chain's remaining stores will close for good by next month.

The layoffs ended hopes that Performance, once the country's largest bike retail chain with 104 stores and nearly 1,700 employees, would continue to operate brick-and-mortar stores. However, the new owners of the Performance and Nashbar e-commerce businesses told BRAIN they will operate and expand those websites. And the new owners of ASI, the wholesale business that distributes Fuji, Kestrel, SE and other brands, also plan to keep that business alive.

Longtime ASI CEO Pat Cunnane is leaving the company after a transition period. Karen Bliss, who is ASI's chief marketing officer, has been named president and CMO. Ryan Davis, from Tiger Capital Group, has been named interim CEO of ASI. Tiger Capital is acquiring ASI in a joint venture with Advanced Holdings called BikeCo.

Last week a bankruptcy judge approved a $23 million bid by a group of three companies for the assets of ASE, which had filed for Chapter 11 bankruptcy in mid-November. Final sales closing paperwork was underway Thursday (an outage at Wells Fargo may have been slowing the closing process).

The Chapel Hill layoffs removed almost all management and support staff above the store level for the Performance store chain, which still has about 60 stores open. All of those stores are expected to be closed by March 2, with some closing sooner. Remaining Performance store employees are now reporting directly to Gordon Brothers, the store liquidation company ASE hired soon after filing for bankruptcy protection.

There were also at least a few layoffs made this week at other ASE facilities, including six people let go at ASI's headquarters in Philadelphia. ASI also laid off an employee in California.

Most of those laid off in Chapel Hill are staying on through Thursday or Friday. About 30 people remain employed there, but about half of those positions are set to expire either this month or next.

There were also layoffs announced Wednesday at a call center in Sophia, West Virginia, which serviced Nashbar and Performance customers. The call center, which has been in operation since 1995, had about 25 employees. It was not immediately clear if those positions were among the 95 job cuts announced or were in addition to the 95.

During the bankruptcy, ASE had received inquiries from bike retailers and others about assuming the leases for some of the Performance stores. However, ASE decided to hang on to the leases until after the asset auction in case a new owner of the company wanted to operate them. Head, which was briefly expected to acquire all the ASE assets, had indicated it would keep about 65 Performance stores open.

Now that it's clear the new owners have no interest in keeping the stores open, there was no reason to continue operating the headquarters. Some Performance store locations may reopen as bike stores if other business assume the leases from the new owners or via direct negotiations with the landlords. Inc. acquired the Performance and Nashbar trademarks and web domains, as well as trademarks for Performance house brands, for $1.245 million. Amain did not acquire any store leases, warehouses or inventory.

Amain CEO Kendall Bennett told BRAIN on Thursday that the company plans to continue operating the two e-commerce sites, and expects to expand their product offerings while continuing to offer all the house brands. He expects the sites will continue to sell the ASI bike brands.

Amain is in discussions with some former Performance employees about joining the company, he said, but he noted that Amain did not have the resources to take on all the employees and the Chapel Hill facility.

Amain operates eight e-commerce sites of its own, in the bike and radio-control vehicle markets. It also operates the e-commerce business for Hobby Town, a national franchise chain. It has one brick-and-mortar bike store, in Chico, California, that sells Specialized and Giant.

"At heart, we are a technology company disguised as an e-comm company," Bennett said.

K&B Investment Corporation acquired the Chapel Hill and Philadelphia real estate at the ASE bankruptcy auction. K&B is the investment wing of Miami-based distributor J&B Importers. Ben Joannou Jr., the co-CEO of J&B and treasurer of K&B, told BRAIN on Thursday that he preferred to wait until after the sale closing to comment on the company's plans for the real estate.

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