AUGUST 29, 2002 -- CORVALLIS, OR (BRAIN)--Recumbent leader BikeE closed its doors and went out of business Aug. 23, the company told Bicycle Retailer & Industry News yesterday.
The move shocked few retailers, who had been unable to contact BikeE since mid-August, when the company disconnected its toll-free telephone number and took its web site offline.
Many had been unable to order certain models since June, when the company closed its U.S. assembly facility and moved to a smaller building.
Concurrently, it also reduced its orders to Taiwanese manufacturers and told many retailers it would not have fresh product until October.
Bob Brown, the company's president and a shareholder, blamed increased operating costs for the shutdown. He also said a weak post-Sept. 11 economy and two costly recalls this year played a role in the company's demise.
BikeE had as many as 30 employees but it had been trimming its staff over the last few months. On Aug. 23, it terminated its last four employees.
The company, the country's largest recumbent maker, sold approximately 10,000 bikes last year. One person close to the company estimated it had sales of $6 million last year.
BikeE turned over the collection of accounts receivables and liquidation of its remaining inventory to agents of its secured creditors, which Brown declined to name. Brown estimated that the company has about $500,000 of product left in inventory.
Brown said questions regarding receivables should be directed to (541) 738-4327, an independent agency. Questions regarding inventory can be directed to Brown at (541) 738-4390.
The move also pulled the warranty rug out from under retailers who sold the company's products. An estimated 30,000 bikes were sold in BikeE's 10-year existence.
"It really compromises the relationship between retailers and their
customers," said Dirk Reitsma, owner of D.J.'s Cycles, a BikeE dealer at in Belmar, New Jersey
Brown declined to reveal BikeE's outstanding debt, but he did admit that the company had never been profitable on an annual basis.