Likes Likes:  0
Dislikes Dislikes:  0
ELITE ELITE:  0
Results 1 to 3 of 3

Thread: Judge bars Performance from promoting sales as 'Store Closing' events

  1. #1
    Join Date
    May 2014
    Location
    Valhalla
    Posts
    101
    Post Thanks / Like

    Default Judge bars Performance from promoting sales as 'Store Closing' events

    FYI.

    _____


    bicycleretailer.com

    Judge bars Performance from promoting sales as 'Store Closing' events
    3-4 minutes

    Published December 4, 2018

    Bankruptcy court also rules on customer return policies.

    DURHAM, N.C. (BRAIN) A U.S. bankruptcy judge has ruled that a liquidator company may not promote sales at some Performance Bicycle locations as "Store Closing," "Going Out of Business," "Liquidation Sale," "Bankruptcy Sale" or similarly themed sale events. While the sales may continue, those kinds of signs are not allowed.

    The ruling by Judge Benjamin A. Kahn applies to the 62 additional stores where Gordon Brothers Retail Partners began operating sales on Saturday. The company also has been operating sales at the 40 other Performance locations since about Nov. 16, when Performance's parent company, Advanced Sports Enterprises, filed for Chapter 11 bankruptcy.

    Kahn said Gordon Brothers and ASE are permitted to promote the sales as "Holiday Sale," "Inventory Clearance Sale" or "Christmas Sales."

    ASE's CEO has told BRAIN that none of the sales should be seen as a direct indication that specific stores will close, although he expects that many locations ultimately will shut down.

    "Currently, this is more about inventory liquidation rather than store closure," Pat Cunnane said in an email to BRAIN. "Whether a store is ultimately closed is a function of concessions that we may obtain from landlords and the marketplace of potential bidders. This process will enable us to determine which stores are the most valuable to the business."

    Kahn also barred Gordon Brothers from supplementing the inventory at the Performance stores with additional merchandise of its own. And he clarified how Gordon Brothers and store employees should deal with customers looking to return items they bought before the Nov. 16 filing, or gift certificates purchased before that date.

    He said Gordon Brothers must accept gift certificates and gift cards issued before the filing and must accept returns of products bought before the filing, under the same policies in effect when the item was purchased, as long as the customer is not repurchasing the same item to take advantage of the new discounts.

    Kahn said that all sales made after the bankruptcy filing are considered "as is," but noted that the stores must comply with state and federal laws that require the stores to accept returns of any goods purchased during the sales that "contain a defect which the lay consumer could not reasonably determine was defective by visual inspection prior to purchase for a full refund, provided that the consumer must return the merchandise within seven days of purchase, the consumer must provide a receipt, and the asserted defect must in fact be a 'latent' defect."

    He said stores should post signs near the cash register stating that "Refunds may only be for merchandise having a latent defect, when returned within 7 days of purchase."

    Kahn's interim order on Monday will be in place at least until another hearing is held on Dec. 6.

  2. #2
    Join Date
    May 2014
    Location
    Valhalla
    Posts
    101
    Post Thanks / Like

    Default

    Also....



    bicycleretailer.com

    Liquidator running sales at all Performance locations
    by Stephen Frothingham
    7-9 minutes

    DURHAM, N.C. (BRAIN) — The company hired last month to run liquidation sales at 40 Performance Bicycle stores has expanded those sales to the chain's 62 remaining stores.

    Performance's parent company, Advanced Sports Enterprises, filed a petition for Chapter 11 bankruptcy protection on Nov. 16.

    On Thursday, ASE filed an amended store closing agreement with Gordon Brothers, the Boston-based firm that was hired to conduct "inventory clearance" or "store closing" sales at 40 stores identified as being unprofitable. The amended agreement adds the remaining 62 Performance stores to the agreement (Performance had 104 locations when it filed for bankruptcy on Nov. 16, but two stores were already in the process of being closed at the time) with sales at the additional stores beginning as early as Saturday, Dec. 1.

    Managers and employees at Performance locations learned of the expanded sale plan on Thursday, and some told BRAIN they were dismayed because they had believed ASE planned to maintain at least some Performance locations following the restructuring. They told BRAIN they viewed the start of the sales at all locations as proof that ASE plans to close all of them.

    "This suggests to me that there was no intention to continue the chain," one Performance employee told BRAIN. Store employees said ASE officials told them the sales were going so well at the initial 40 locations that they wanted to expand them to other locations during the critical holiday period.

    ASE's CEO, Pat Cunnane, said the sales expansion does not indicate all the stores will be closed.

    "Currently, this is more about inventory liquidation rather than store closure," he said in an email to BRAIN. "Whether a store is ultimately closed is a function of concessions that we may obtain from landlords and the marketplace of potential bidders. This process will enable us to determine which stores are the most valuable to the business.

    "We are trying to renegotiate leases and we believe this helps," Cunnane added. "So, this is actually in pursuit of maintaining as many stores as possible. Still, we continue to work through many obstacles and we don't know what stores will remain open until the occupancy costs are known."

    He said other retailers have expressed interest in buying some Performance locations, so some stores may close as Performance locations and reopen under another name.

    Gordon Brothers is contracted to run sales at the initial 40 locations for 12 weeks ending Jan. 27. Sales in the other 62 locations are set to run until Feb. 28. Sales may end sooner at some locations if the stores are sold or the remaining inventory is consolidated with other locations.

    Under the initial agreement, Gordon Brothers would operate a "themed sale" that can be promoted as "inventory clearance" or "store closing" sales as mutually agreed by Gordon Brothers and ASE. Cunnane said ASE was still negotiating with the court about the language used to describe the sales at the additional stores. This weekend, sales at the additional 62 stores did not include any language about store closings, he said.

    Gordon Brothers' budget for the sales is $2.1 million, including $1.1 million to be spent on advertising. ASE's total budget for the sales period, including rent and payroll and the Gordon Brothers budget, is $12.8 million. Among other compensation, Gordon Brothers will receive a tiered incentive payment tied to the percentage of the inventory's cost that is recovered through the sales.

    Gordon Brothers is consulting with ASE on ways to maximize the value of the remaining inventory, including making some store inventory available online. Some Performance store employees told BRAIN that they were being told to box up 2019 model year bikes and send them back to the Performance warehouse.

    ASE wants to extricate itself from Ideal contracts

    In its Nov. 16 filings, ASE asked the bankruptcy court to release it from some trademark licensing, marketing, and manufacturing contracts with Ideal Bicycle Corp., the Taiwan-based manufacturer that has historically been a major investor in ASI and ASE, as well as the manufacturer of many of its bikes.

    The contracts date to as early as 2001, although some were updated and extended as recently as 2017.

    Three days before ASE's filing, Ideal had sent a letter demanding payment of $12.5 million in trade debt and said it would terminate outstanding purchase orders on Nov. 15 unless the situation was rectified. ASE did not responded to the demand.

    ASE has told the court that the agreements with Ideal are no longer necessary to continue operations and said they make it more difficult to sell its assets. It said ending the licensing agreement increased the value of the trademarks that ASE owns. Ending the agreement would bar Ideal from selling products with any of the ASE trademarks — even products that are already in Ideal's inventory — in any markets.

    Cunnane told BRAIN that ASE had to protect its trademarks to ensure its products were sold only through ASI-authorized dealers.

    The court will hold a hearing to consider the motion on Dec. 6 if anyone objects to it. If no one objects by the end of day Monday, Dec. 3, the court will consider the motion without a hearing. As of Sunday evening, no one had objected.

    Landlord objections, auction plans

    Multiple Performance store landlords have asked the court to modify ASE's proposed auction process to give the landlords time to object to terms of the auctions affecting their leases. ASE has proposed that the auction begin on Dec. 19, with Dec. 16 set as a deadline for ASE to notify bidders of qualified bids.

    The landlords are proposing they be allowed 14 days to review and object to bids that affect their leases before the bids are accepted. They also want the ability to bid on their own leases without being subject to the same vetting process as other bidders.

    As of Sunday evening ASE had not filed a response to the landlords' objections and proposals and the court had not ruled on the landlords' request.

    Besides the store leases, the auction will include all of ASE's remaining assets, including the ASI distribution business and its brands, which include Fuji, Breezer, Kestrel, SE Bikes and Oval Concepts. The various parts of the business could be sold separately or in bundles, depending on the bids received.

    Related stories:

    Nov. 17, 2018: ASE to file for Chapter 11 bankrutpcy
    Nov. 7, 2018: Dean wins US House seat in Pennsylvania
    Aug. 24, 2018: ASE consolidates Nashbar and Performance systems, closes Ohio warehouse
    Aug. 20, 2018: At tariff hearing, ASE's Cunnane proposes solution to unfair trade with China: de minimis reform
    April 18, 2017: ASE begins search for new Performance president
    Nov. 15, 2016: David Pruitt steps down as Performance CEO
    Aug. 16, 2016: ASI buys Performance Bicycle
    March 16, 2015: ASI buys Phat Cycles and Sterling bike brands
    Dec. 9, 2013: ASI says Calgary bike shop can use Roubaix name
    Dec. 13, 2013: ASI, Specialized and Cafe Roubaix in 'complete alignment' over trademark
    Sept. 23, 2008: ASI purchases Breezer
    Oct. 16, 2007: Advanced Sports purchases Kestrel

  3. #3
    Join Date
    Jun 2016
    Location
    Washington DC
    Posts
    494
    Post Thanks / Like

    Default

    Posting here as well: later on Thursday the judge held another hearing whereby they were given permission to call them "store closing" sales. https://www.bicycleretailer.com/indu...s#.XA0b62hKiUk

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •