I guess I am the Harvester of Sorrow this week. First the GT Bicycles story, and today, I bring the news that Rocky Mountain Bicycles has applied for restructuring. The 40+-year-old Canadian bicycle company applied with the Superior Court of Québec for protection under the Companies’ Creditors Arrangement Act (CCAA).
The press release says that it was the pandemic that started Rocky Mountain down this path as the brand struggled to secure supplies due to shortages and rising costs. And then post-pandemic, Rocky Mountain had to contend with a sharp drop in selling prices.
With margins tightening, it put Rocky Mountain under a kind of financial pressure they were not prepared for. So, feeling that their choices were limited, they initiated the restructuring procedure. They launched the Sales and Investment Solicitation Process (SISP). This will help them become a “resilient and successful, long-term business”.
Given the number of bike brands that seem to be in trouble recently, it’s not surprising to hear of another that is facing financial uncertainty. But it is a surprise to hear that is a company as big and as iconic as Rocky Mountain. We’re hoping the restructuring works out for everyone in the long term!
From the Press Release
SAINT-GEORGES, QC, Dec. 19, 2024 /CNW/ – RAD Industries Inc. (the “Company” or “Rocky Mountain“) announced today that it has filed an application with the Superior Court of Québec (Commercial Division) (the “Court“) for Court protection under the Companies’ Creditors Arrangement Act (‘CCAA‘).
Despite strong demand for its bikes during the pandemic, the Company struggled to secure supplies due to shortages and rising costs. Once the pandemic was over, the Company had to contend with a sharp drop in selling prices.
As a result, margins have tightened, putting unprecedented financial pressure on the Company. Rocky Mountain has no choice but to initiate restructuring procedures to launch the Sales and Investment Solicitation Process (SISP) to become a resilient and successful long-term business.
By undertaking a restructuring process under the CCAA, the Company will be able to avoid business interruption as much as possible and reduce the resulting impacts of the current situation. The Company will ask the Court to appoint Ernst & Young to act as Monitor under the CCAA. Lavery de Billy is acting as Legal Counsel to the Company.
