The Pro's Closet at it again

[rice rocket]

Originally Posted by peanutgallery

After looking thru the auction inventory and seeing the 8 Gucci parts washers I can almost kinda see how they burned thru 80 million dollars in like 3-4 years. It was probably a lot of work

They went high dollar on everything they did and I guess it was glorious. Personally, 80 million should go for at least a few decades of decadence. Disappointed there wasn't a jet or a helicopter, just a couple trailers

The MBA scribble on that whiteboard is kinda funny

There will be a few more victims of the current market. We have a pool, I put my money on Jamis

The real money was spent carrying the amount of inventory they did.

I bet they paid more in interest than what 500 parts washers would cost.

[peanutgallery]

So...that whiteboard didn't do a darn bit of good

Scaling up is always going to be a disaster these days

Originally Posted by rice rocket

The real money was spent carrying the amount of inventory they did.

I bet they paid more in interest than what 500 parts washers would cost.

[AngryScientist]

So I was out on a solo ride today thinking about this and it made me realize how little I know about business.

What do we think actually happened? I assume TPC got to the point where their debt outweighed their ability to pay the debt and operate at the same time.

What then? Do they just declare default and whatever assets are left are sold off to cover whatever possible from the leinholders?

Where this was all going in my head is: What then becomes of the name? Who "owns" TPC naming rights now? If some person or group wanted to restart TPC, is this possible?

I suppose it gets further complicated if before they declared default, if they owed, let's say $50M in debt and some investor wanted to buy the name TPC for $5M - is that even possible given the debt load?

[Jeffie]

Let's just say 3 years ago they had $40M. They 5x the size of their warehouse and in rough numbers were losing $30k/day, everyday, for 1,000 days in a row.

How this was not quickly rectified I will never understand.

Growth is so exciting until it isn't. There is no way I'd ever 5x my space on an established business in one move.

It's ok to try and fail. The question is, did they really try to save it?

[prototoast]

While they have closed, according to this article from Brain, they haven't declared bankruptcy. https://www.bicycleretailer.com/reta...eing-auctioned

I also haven't seen reports of creditors not being paid.

It seems quite plausible that they still have a potentially significant amount of cash on hand, but if they were losing money now and for the foreseeable future, it might have made sense to shut down quickly rather than continue losing money.

[glepore]

Originally Posted by AngryScientist

So I was out on a solo ride today thinking about this and it made me realize how little I know about business.

What do we think actually happened? I assume TPC got to the point where their debt outweighed their ability to pay the debt and operate at the same time.

What then? Do they just declare default and whatever assets are left are sold off to cover whatever possible from the leinholders?

Where this was all going in my head is: What then becomes of the name? Who "owns" TPC naming rights now? If some person or group wanted to restart TPC, is this possible?

I suppose it gets further complicated if before they declared default, if they owed, let's say $50M in debt and some investor wanted to buy the name TPC for $5M - is that even possible given the debt load?

They got squeezed the same way everyone in the industry did, scaling way up during pandemic demand and then being stuck with inventory. But I suspect death was quicker for TPC because their margin between unit cost and retail value was much narrower than for a manufacturer. Plus they bought rim brake bikes, which rapid became next to impossible to sell.

[Mark McM]

A story just appeared in Bicycle Retailer and Industry News confirming that Cambria bike has bought the IP of The Pro's Closet:

https://www.bicycleretailer.com/reta...y-and-colorado

[AngryScientist]

Originally Posted by Mark McM

A story just appeared in Bicycle Retailer and Industry News confirming that Cambria bike has bought the IP of The Pro's Closet:

https://www.bicycleretailer.com/reta...y-and-colorado

???

That article makes no mention of TPC, unless I need another cup of coffee...

[peanutgallery]

Wrong collapsed online retailer

[mcteague]

Originally Posted by AngryScientist

???

That article makes no mention of TPC, unless I need another cup of coffee...

Yeah, I mean it spells it all out in the headline!

Cambria Bike acquires intellectual property of Planet Cyclery and Colorado Cyclist

Tim

[AngryScientist]

Originally Posted by mcteague

Yeah, I mean it spells it all out in the headline!

Cambria Bike acquires intellectual property of Planet Cyclery and Colorado Cyclist

Tim

Are people confusing Planet Cyclery, Colorado Cyclist and TheProsCloset?

They are not the same...

For me, one of the things Colorado Cyclist was best known for was their wheelbuilding service. I wonder if they will continue to offer that. Seems like custom wheelbuilding is a dying trade though, these days,

[November Dave]

Originally Posted by AngryScientist

Seems like custom wheelbuilding is a dying trade though, these days,

Because it's a complete pain in the butt as a business, with low margins, no barrier to entry, precious few ways to differentiate no matter how good you are at it, it's labor intensive and physically demanding, no opportunities for scale, access to vendors is marginal, inventory costs are high relative to turns, Chinese wheel brands are doing an awfully good job of competing these days, and customer expectations for sales and service are poorly matched with revenue and margins.

A reasonable selection of hubs would be +/- 10 lines across +/- 7 brands. Among them you have at least 4 different freehub options, 6 bolt/Centerlock/rim, an average of about 6 colors, 4 front drillings and 3 rear drillings, several axle lengths, and different end caps. Keeping hubs in stock is impossible. Rims aren't much easier. Spokes are a little easier but not much - if you have a cutter/threader you can get away with a few hundred spokes each of 3 types in 2 colors in about 8 lengths. Only about $10k of spokes, but at least you should turn them with some regularity.

And your labor price is constantly compared to the customer's buddy who will screw it all up terribly in return for a 6 pack.

It's tough sledding.

[Mark McM]

Originally Posted by AngryScientist

???

That article makes no mention of TPC, unless I need another cup of coffee...

Oops, sorry, posted in the wrong thread. (And yes, I posted before I had my daily dose of caffiene).

[peanutgallery]

I feel you, bro

Originally Posted by November Dave

Because it's a complete pain in the butt as a business, with low margins, no barrier to entry, precious few ways to differentiate no matter how good you are at it, it's labor intensive and physically demanding, no opportunities for scale, access to vendors is marginal, inventory costs are high relative to turns, Chinese wheel brands are doing an awfully good job of competing these days, and customer expectations for sales and service are poorly matched with revenue and margins.

A reasonable selection of hubs would be +/- 10 lines across +/- 7 brands. Among them you have at least 4 different freehub options, 6 bolt/Centerlock/rim, an average of about 6 colors, 4 front drillings and 3 rear drillings, several axle lengths, and different end caps. Keeping hubs in stock is impossible. Rims aren't much easier. Spokes are a little easier but not much - if you have a cutter/threader you can get away with a few hundred spokes each of 3 types in 2 colors in about 8 lengths. Only about $10k of spokes, but at least you should turn them with some regularity.

And your labor price is constantly compared to the customer's buddy who will screw it all up terribly in return for a 6 pack.

It's tough sledding.

[Old School]

Originally Posted by Jeffie

The question is, did they really try to save it?

BINGO.


Alotta nice bikes into the vapor.
Alotta VC dollars into the vapor.