MADISON, Wis. (BRAIN) — Saris Cycling Group, the maker of indoor trainers, bike infrastructure products and bike racks, is re-organizing under Wisconsin's Chapter 128, a voluntary debt consolidation program run through the state's circuit court system
Saris founder Chris Fortune said the company is the victim of the "Covid whiplash," which left it with excess inventory, especially of trainers, when the market dried up this spring. Other companies that serve the indoor exercise market, including Wahoo, Zwift, and Peloton, have reported financial problems as the market slowed.
"We have almost four times as much inventory as a year ago, primarily on our training product," Fortune told BRAIN on Wednesday. "Business was amazing in '20 and '21, then inventory filled up in all the channels everywhere, domestically and internationally on indoor training products."
Fortune said Saris's infrastructure and bike rack businesses are doing well.
"We are like a twin-engine plane when one engine dies ... it's all connected corporately, we can't separate out the trainer business," he said.
He said the company is operating as normal in the short term and he hopes there will be no layoffs. The company has about 128 workers.
"The process is to get the company ready to sell as quick as possible," he said.
Saris, which has been in business for 45 years, filed a Voluntary Assignment for the Benefit of Creditors proceeding pursuant to Chapter 128 of the Wisconsin Statutes in Dane County, Wisconsin Circuit Court.
In a statement released to BRAIN Wednesday, the company said, "Like many businesses in the fitness and active sports industry, Saris experienced incredible demand for its products during the Covid-19 pandemic and sales increased dramatically. To satisfy this new demand in the face of extreme supply chain disruption, the company aggressively built inventory only to see sales drop precipitously as the pandemic waned.
'The resulting financial challenges led ownership to the conclusion that the business must be sold as a going concern to ensure its continued viability. The sale process, which has already started, is expected to take approximately 60 days."
Michael S. Polsky, a Milwaukee lawyer, is acting as the court-appointed Receiver. In the statement, Polsky said, "We are planning to continue business as usual and plan to keep employees in place throughout the court-supervised process.
"In addition, we are working closely with Saris' lender and have funding in place for payroll and operating expenses during the Chapter 128 process," he said
