March 4/20 17:03 pm - Garneau Files for Creditor Protection in Canada UPDATED

Posted by Editoress on 03/4/20
 

One of Canada's largest cycling companies, Louis Garneau Sports Inc., has filed a notice of intention to file for creditor protection.  The company says that it has debts of $32.7 million (Canadian).  It should be noted that this notice is for the Canadian operation, and does not include the U.S., Mexico or Sugoi.  In its filing, the company says that it would immediately lay off 66 employees, temporarily, at it's headquarters just outside of Quebec City (Saint-Augustin-de-Desmaures.

The creditor list includes 503 companies and individuals for a total of $32,745,372.87 .  Eight are secure creditors, including the two largest - the Royal Bank (RBC) at $11,413,500 , and Investissement Quebec at $6,370,000 .  A number of Asian suppliers are among the unsecured creditors, with the largest being Active Cycles ($378,998.35), Aguila ($1,155,797.20), Bigideas ($438,038.57), Econotrade/Top Sport ($567,081.14), Ideal Bike Co. ($384.114.82), Xiamen /JDX ($804,398.31) and Horizontal ($5592,316.64).  Employees are also owed $671,368.63 .  Some athletes are also listed - Antoine Duchesne ($2,500) and Geoff Kabush ($2,000) - and cycling clubs such as Waterloo CC ($1,935.69) - these appear to be clubs and teams that have provided deposits for clothing orders.  It also appears that Louis Garneau is listed as a creditor for $650,000 .

The Quebec provincial government has already indicated it may participate in the restructuring and assist with bringing in new investment in the company.

In a release, the company pointed to the bankruptcy within the last three years of two of its largest European customers as contributing to the liquidity problems it faced.  Garneau is also a creditor of the Quebec-based sports and outdoor chain La Cordée, which went under creditor protection in the last two weeks.

Louis Garneau said in the release:

"We are deeply saddened and sincerely sorry to have to temporarily lay off many of our loyal and long-standing employees. I want to thank all of them for their energy, devotion, and patience during this difficult time.  We have hit a headwind due to the extreme difficulties the industry is facing, combined with the challenges of the retail market in general. Our problems started 36 months ago when two of our larger international customers filed for bankruptcy, creating a significant strain on our cash flow.

"My hope and goals are to maintain the head office in Saint Augustin-de-Desmaures, employing as many employees as possible. Throughout all my years competing in cycling, I never gave up even after a crash on my bike; I carry the same mantra in business. With the support of my team and family, I will do everything in my power to pull through and bounce back. All my energy will be put into the restructuration [sic] in support of the employees and their families. I want to thank all the Canadians who have supported since the company began in my father's garage in 1983."