VANCOUVER (BRAIN) — Bicicletta, which opened in 1984 as a small Italian road bike shop, filed for creditor protection but will continue operating its website and fulfillment center. Its Vancouver retail store, however, closed almost two weeks ago, CEO Graham Fox said.
On June 28, FTI Consulting, Bicicletta's Vancouver-based trustee, filed the notice and listed creditors with claims of CAN$250 or more. Debts were listed at CAN$6,360,490.61 ($4.8 million), the largest being owed to two banks: the Business Development Bank of Canada in Vancouver (CAN$1,820,760) and the Royal Bank of Canada in New Westminster (CAN$1,791,933.99). In addition the trade credit insurance company Allianz Trade in Montreal is owed CAN$413,601.99.
Creditors with familiar names within the bike industry include Cycling Sports Group (CAN$222,721.14), Shimano Canada (CAN$148,143.63), and Cervelo (CAN$49,232.08). A list of assets has not been filed yet, Fox said.
Bicicletta is not associated with retailer La Bicicletta Toronto.
About 20% of Bicicletta's workforce was laid off, Fox said, leaving the company with just under 20 employees. He said he doesn't expect any more layoffs. Bicicletta is working with advisors to bring in an equity partner, and Fox said he would like to remain on the leadership team.
"The response from the investor community locally and across Canada has been a little overwhelming, actually," Fox said. "It's exciting to see that response despite the challenges we're facing. It's very encouraging to see so many strategic investors and institutional investors who really want to see Bicicletta succeed and move forward and don't want to see it go away. We're excited to put together a deal that makes sense for all of the stakeholders and allows us to continue operating."
After growing "exponentially" from 2018 through the pandemic, Fox said the market changed in early 2022.
"We were just a bit sluggish to respond to it," he said. "That compounded by the oversupply in the market and reduced demand just meant our balance sheet and the working capital needed to be restructured to support the business moving forward. In Canada, creditor protection is very much a constructive financial tool that allows us to stabilize the business, then reimagine it, and move forward and restructure it."
