Serotta lays off 40% of workforce, planning shutdown

[Charles M]

Serotta lays off 40% of workforce, planning shutdown

by Steve Frothingham / Bicycle Retailer

CEO says "funds never came" after merger with Blue and Mad Fiber
SARATOGA SPRINGS, NY (BRAIN) — Serotta has laid off 40 percent of its workforce and is planning to shut down production in the next two weeks, CEO Bill Watkins told BRAIN on Wednesday.

The company was recently merged with Blue Competition Cycles and Mad Fiber Wheels to become part of the Divine Cycling Group. At the time of the merger, DCG said the combined brands would be better able to attract investment and pool resources. However Watkins said the merger did not result in any immediate increase in funding, forcing him to lay off eight or nine employees on July 19.

DCG officials and company founder Ben Serotta were not immediately available to comment.

Mad Fiber spokesman Jasen Thorpe told BRAIN on Tuesday that production was continuing at the wheel company and there had been no layoffs there. Blue Competition CEO Steven Harad was not immediately available to comment.

Watkins said Serotta's bike builders were working to complete orders.

"We still have a core group of craftsman still producing bikes, but we are not accepting orders. I'm anticipating a shut down in two weeks. I do not know if that will be temporary or permanent while the owners figure out what to do," he said. "I'm working to build out the runway and land this airplane gracefully and professionally."

"(DCG) have not invested any capital that was required to consummate the merger, and to fuel the plans that each of the three companies had at time the merger was being discussed. Ben (Serotta) and I disclosed what we were doing, they bought into plan and said, 'go for it' and we did the plan ... but the funds never came. We got official notification last week that the funds would not be coming."

Prior to joining Serotta last fall, Watkins was a consultant with Bradway Capital, an investment group that bought an interest in Serotta in May 2012. Watkins said he did not have any equity in Serotta or DCG.

[laupsi]

yes I just tried to get information so I could order a new Pronto, was informed by my LBS who retails Serotta that they are not currently taking new orders. how unfortunate!

[gone]

Sad.

[Cat3roadracer]

A sad day.

[jmoore]

I predict 5+ pages on this thread.


Definitely a sad day.

[sashae]

RIP Serotta. Seems the 'Divine Cycling Group' nonsense was just that, nonsense -- they had no funding, and were hoping to combine the brands to get it. Terrible.

[Steve in SLO]

What a bummer...a renaissance that will never come.

[eddief]

what a terrible american biz debacle. can you say "ibis"? a great case to be studied by a good MBA candidate. wow.

[Charles M]

I had heard from a couple of people that layoff's started earlier than this but this is the first confirmation I've seen.

I'm hoping that Blue and Madfiber are not in a similar situation but then they were in different situations than Serotta going into negotiating.

[biker72]

Hopefully those that sent deposits for new bikes will get the money returned.
If they go brankrupt...slim chance of getting any money.

[Lewis Moon]

All hail the Specialized/Trek oligopoly.

[dekindy]

Sad.

[Nooch]

Originally Posted by biker72

Hopefully those that sent deposits for new bikes will get the money returned.
If they go brankrupt...slim chance of getting any money.

Hoping my pronto is part of the bikes still being built...

[LegendRider]

Whoops - I see my comment was just repeating what eddief said.

[Liberace]

"We still have a core group of craftsman still producing bikes, but we are not accepting orders. I'm anticipating a shut down in two weeks. I do not know if that will be temporary or permanent while the owners figure out what to do," he said. "I'm working to build out the runway and land this airplane gracefully and professionally."


Bill Watkins is a class act.