Bikes USA, an ailing local retailer that filed for bankruptcy protection last month, has sold five of its 11 stores in the Washington area to Performance Inc., a North Carolina chain of bikes stores, company executives said yesterday.
The entire transaction is valued at $2 million and includes the assumption of leases on Bikes USA stores in Vienna, Reston, Springfield, Gaithersburg and Rockville, said Randy Gillett, chief financial officer of the Alexandria-based chain. Performance already operates four Washington area stores.
Gillett said Bikes USA hopes to sell its remaining local shops to other bike retailers, in part because they are more likely to retain store employees. Bike merchants also may be more willing to take responsibility for Bikes USA customers.
Performance has been on an expansion binge designed to drive sales at its 40 stores, catalogue and online business. Garry Snook, the company's chief executive, said Performance recently attracted $50 million in venture capital investments to help fund acquisitions and grow its Internet presence.
Bikes USA filed for Chapter 11 bankruptcy protection after an aggressive expansion left the company with too much debt. Bikes sales nationwide also have been on the decline.
Bikes USA opted to close all 21 Bikes USA stores, including outlets in Atlanta; Raleigh, N.C.; Miami and Orlando.
As part of the agreement, Performance will honor Bikes USA gift certificates and merchandise credit vouchers. It also will perform manufacturer's warranty work. "I think that is a nice gesture on the part of Performance," Gillett said.
It was not immediately clear whether Performance will accept returns, refund any deposits owed to consumers or do work that is warrantied by Bikes USA.
Springfield resident Stuart Howard Datz said he expects to lose the $108 he spent on a bicycle for his 11-year-old son, Josef. Last month, he returned the bike after its training wheels didn't fit. But Datz is still waiting for a refund check that Bikes USA promised to mail to him shortly before the retailer filed for bankruptcy protection.