(Photo: Andy Kutansky)
Some people hoped a bankruptcy filing last month by the parent company of the Performance Bicycle might not result in the closure of all stores across the country.
But today the list is out and the news isn’t good: Advanced Sports Enterprises says it will close all 102 of its stores in the United States. That includes locations in Portland (Mall 205, 9988 SE Washington St.), Tualatin (7690 Montgomery Rd.) and Beaverton (3850 SW Hall Blvd.). The closure leaves Portland with just one bike shop (Outer Rim Bicycles) east of I-205.
Performance is a well-known retailer in the bike industry that was founded as a mail-order catalog in 1981.
According to Bicycle Retailer and Industry News (BRAIN) magazine their parent company filed for bankruptcy on November 16th. Here’s more from BRAIN:
Patrick Cunnane, the CEO of ASE, said… the company was unable to turn around the retail business, which has seen sales declines for the last six years. “We were undercapitalized from the start.”
… “We tried to be more local and less national,” he said. Stores raised some retail prices to match the market and improve margins, and developed procedures to turn inventory better.
ASE was able to integrate the Performance and Nashbar back end systems and warehousing, but was unable to fully integrate the retail and wholesale back ends. “Sometimes you have to spend money to save money, and we didn’t have the money to invest to achieve the savings we wanted,” he said.”
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When BRAIN first reported the story, leaders of ASE made it seem like some of the stores would survive the re-organization.
But an email sent today from Gordon Brothers, a company hired to liquidate Performance’s inventory, made it clear that all the store will be closed.
“The Company has made the strategic decision to close all 102 Performance Bicycle stores,” the email says. “Today marks the first day of a major sale at all Performance locations.”
Discounts will start at 40 percent. And as they say, everything must go.
Beaverton resident Andy Kutansky will miss the Beaverton store. “The employees were always friendly and hosted shop rides on the weekends,” he shared with us in an email today. “Someone in the store said it had been open 30+ years or so! Today they seemed sad and I was sad with them.”
This news comes on the same day that the bicycle industry’s (once) largest annual trade show, Interbike, has called it quits.
— Jonathan Maus: (503) 706-8804, @jonathan_maus on Twitter and jonathan@bikeportland.org
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Any news on the health of Nashbar? I got their catalogs in the mail as long as I can remember, but those seem to have come to a stop. And they hardly ever have those 25% off sales that used to be regular.
Performance closed because you cannot be profitable running sales all the time.
Or selling bikes called Scattante (Sca-Taint!). I’m pretty sure that name played no small part in their downfall.
I just got an order from Nashbar. Great service, deep discount (about 60% from local retail), and prompt delivery, even during the holiday season . Please, no flames about shopping local; I did a lot of business at my LBS this week as well, but I refuse to pay $8 for a tube, $3.49 at Nashbar). Also, they have products in stock that I can only get special order from my LBS in Bend.
What’s really sad is that my pro LBS also buys stuff from from online retailers. He can get Shimano & Campy group part sets from Wiggle in UK cheaper than from his main distributor, Quality, which he then marks up to MSRP. He’s perfectly aware that those of us who are poor but bike dependent have already formed buyer’s coops, whereby we claim to be a garage-based LBS and are able to get accounts with lessor distributors such as HJC, J&B, & KHS. According to BRAIN, Quality isn’t willing to allow us to have accounts with them, but apparently they do encourage LBS shop employees and SRAM salesmen to set up their own Quality accounts and sell stuff to friends and family on the side. Essentially LBS are getting it on all ends, both distributors and consumers are bypassing and even killing the fixed LBS businesses.
By the way, my tubes are $1.29 for your Chinese-made $3.49. Schwalbe tubes and the really thick 4.3mm thorn-resistant Chinese-made kind are under $5 each.
upset that shops are having problems I always used Nashbar and Performance but also local shops. Is it the end of an era? Sad
Really? What sale? Mark something made in China up for 200% past retail and deduct 40% off ? I went there a few times over the years and they are ridiculous. $2000 for a bike worth $1200. $50 for cheap made in China handle bar tape. And $50 to take 5 minutes and adjust your derailleur? Yeah good riddance to them.
Sad to see them shutting down, but it won’t change a whole lot for me. I went to Home Depot at mall 205 and saw a guy swinging a sign for the Performance closing sale. So I stopped in. Seemed pretty normal still. 40% off signs are a bit misleading, most things are only 10 or 20% off as it’s “up to” 40% off.
It’s being handled by Gordon Brothers, who did liquidations for Sports Authority, KB Toys and many other retailers, so don’t expect much of a discount at first. The inventory will slowly bleed out over the course of a few months, if what I’ve seen in the past happens here.
Interestingly enough, a bankruptcy judge had to approve the “store closing” language used in sale signs:
https://www.bicycleretailer.com/industry-news/2018/12/07/bankruptcy-judge-approves-store-closing-sales-all-performance-locations
I stopped in the Mt. View (CA) store on Saturday and picked up a few items that were 20% off that I needed anyway. Overhead one sales guy say there was an additional 10% off, so the manager gave it to me when I asked… but only after saying I heard it from them.
To your point, as most liquidations go, they are still in ‘cash preservation’ mode. My LBS went through this last year, and the owner estimated it cost him easily $60K out of his pocket. (Now I’m stuck with a State fixie I don’t need, out of the goodness of my heart and wallet…).
It is worse than that the the Mt. View store. I went in late Friday after getting the “closing” email and already being out for a Dr’s appt. Wanted to pick up some of the Forte Metro ST “slick” tires I use on folks bikes looking for better rolling resistance and ride than MTB and treaded hybrid bikes. Price on the rack was “$17.99” (as expected). BUT they rang up at $19.99 before discount. I asked eh! that’s not the posted price.
Manager said that they’ve been selling Forte tires at a discount forever, but now the prices of everything has been raised to MSRP and discount is taken from that. I also bought a box of Cliff bars. Price on the rack was $14.99 which rang up as $17.49. Looking at the display in small type was (save $2.50, MSRP $17.49).
Claim is too much time and effort to reprice everything. And if they pulled all price tags they’d spend all day scanning things and quoting prices to customers on every item.
This is borderline fraud.
[Then for the next 3 days I get the “additional 10% off” emails. Had I come in 18 hours later I would have saved a significant mount of $$]
Bankruptcy in the US is kinda odd. What they actually announced is that everything from their inventory to their websites, brands, warehouses, and store leases are for sale by auction, but if they don’t get buyers (there’s a bike glut out there), then they’ll likely emerge from bankruptcy with far fewer stores, inventory written-off, renegotiated leases, and maybe one store per major market. The store manager here is waiting until late January to panic and lay off any staff. And yeah, stuff is on sale, but it’s the same every Christmas.
Did you see the follow-up story on BRAIN about the elections? It seems that ASE insiders, owners of Perf, ran and won Congressional seats in Pennsylvania. Very expensive that. Lots of campaign debt. Hmm, I wonder they got their money…
Lets face reality, the masses are broke, what little money they have is being extracted by rentier cartels ( high rents, out of whack mortages, cable companies, the sick care industrial complex, mandatory insurance, and student loans). Car sales have plunged 15-20% in the last quarter, while the real estate market has rolled over and is heading down. It is not suprising that the same thing is happening to bike sales.
This is a little off-topic, but it will definitely be “interesting” (in a train-wreck kind of way) to see what happens when the turnip runs out of blood. The mid-century business goal of creating or building value has given way almost completely to a mindset of extracting value. Stephen covey is spinning.
Of course, I am largely naive to the machinations of business and high finance, so this is only one schlub’s perception.
Who are the masses and what is an “out of whack” mortgage?
“PS
Who are the masses and what is an “out of whack” mortgage?”
An “out of whack” mortgage occurs when interest rates are held near 0% for too long, creating a HUGE bubble in prices of many assets, including real estate. The mortgage is great (unless it’s an adjustable rate mortgage), but the home price is far too high. Same thing happened in 2008. A lesson in history:
https://www.youtube.com/watch?v=jj8rMwdQf6k
Haha, what? If someone buys a house for $600k at 4% fixed for 30 years, their payment is $2,864 per month. What you’re saying is if the interest rate was 9% and the house was $355k you would be okay with that, even though the payment is the same? Oh and the financial crisis of 2008 was due to the securitization and creation of collateralized debt obligations of mortgages that never should have been rated as high as they were since there were huge numbers of mortgages supplied to people with adjustable rates and unverifiable income. Today isn’t even close to that scenario, have you procured a mortgage recently, it is a much more onerous process? In the end, it may be fair to say that some people find current pricing frustrating because they can’t afford where they want to live, but the only way pricing is going down is with higher rates, so as I have noted above, that doesn’t change the affordability of the home even though the price of the home has gone down.
But it’s not the same thing as 2008. The ARMs of 2008 were primarily second-mortgages (home equity loans) backed by the inflated house value, which was driven up by the real estate bubble. Similarly, a lot of 2nd (and more) houses were financed with low down payment mortgages, similarly propped up by the expanding bubble.
Second mortgages are much harder to get now, and going above 80% debt is very rare. ARMs are relatively rare (very low interest rates have them unattractive). Required down payments are higher on first homes, and much higher on second homes (very hard to go <20%).
Some mortgages are somewhat "out of whack" because of how fast prices increased (people overpaid). But all those other factors are critical distinctions–in short, mortgages are unlikely to be so out-of-whack that people are underwater or unable to repay them on a large scale, cratering the market.
I’d put my money on competition from the internet. It’s not a big secret.
When did Perf close their shop at 17th & West Burnside?
David I think they were in that location from 2009-2015.
This has been years in the making. Prior to being purchased by ASE, Performance was owned by an investment group that milked the company for every dollar it could before selling at an inflated price with other debts as well.
There were a number of cost-saving measures taken about two years ago to avoid going into bankruptcy, with varied success.
It’s too bad. I enjoyed working for Performance for four years, and finally quit when my rent went up to move back to Portland. I hope my coworkers are ok.
Modern American profit-gouging investment capitalism should be outlawed.
I don’t think the antics of the private equity asset strippers such as ASE, Bain Capital ( thanks Mitt) and Fast Eddie ( Sears) have much to do with real capitalism. They have more in common with the era of piracy in the Caribbean during the age of sail than they do with anything resembling honest business. Buying a company, loading it up with debt, stripping out the value in the form of fees and salaries for the private equity company owners, then dumping the carcass in to bankruptcy and letting the costs to fall on pensions, employees, and unsecured creditors is criminal activity pure and simple. It is only legal because it has been so profitable ( for the few) that they can pay to have the laws arranged in their favor. One day when the yellow vests show up in the streets of America we know who they should be coming for first.
For the record, the merger with ASE made a lot of sense. The profit gouging was done by the prior owner of Performance who then sold it to ASE just over two years ago.
Check out the Brain article. ASE bought performance because they owed them so much money that ASE would go out of business if Performance went under.
Very sad to hear of another bike shop gone.
I do want to make a slight correction – East Portland has one more bike shop, open Thursday, Friday and Saturday, located around the back of the Rosewood Initiative, 16126 SE Stark St.
It’s a partnership with another great non-profit, p:ear…
https://www.pearmentor.org/news/introducing-p-ear-bike-works
A GREAT shop to support!!!
Also, NW Pro Gear is basically under 205 in Lents. Nice shop with good used options.
Is BikeTiresDirect still on 92nd near the Airport?
BTD is still there, but they’re not what I’d consider a normal bike shop. Mainly just a small storefront for an online retailer. Their hours are more limited and it’s not really the place to take a bike for service. However, I do highly recommend going into the store. Not only can you get $5 knocked off your purchase in lieu of free shipping if you pick it up there, they always have some amazing one-off deals in the shop that they don’t show on the site. Got a brand-new helmet that normally costs $300 for $100 because it was a display that no longer had the original box and carrying case. Their VIP (Gold) program is nice as well because it’s free to sign up, unlike the Performance membership.
Can’t say I didn’t see it coming. Having worked for them as a store manager I can say they never took the brick and mortar side of things all that seriously. Not sure why they are closing the Beaverton store, it was their top location for the last two years.
Nice to see the comments in the BRAIN articles where the LBS’s are asking those losing their jobs to come apply.
I was an original employee and helped to open the Beaverton store back in ’93. Sad to see it go.
Was in the Beaverton store on Friday. The 40% off was on the banners but the best I saw was 20% off.
Looked like they weren’t honoring Team Performance and were pointing customers to the website.
Very hard to find the information on their website, just a red banner at the top stating “An important update for all Performance Bike customers” Here’s the link.
https://www.performancebike.com/shop/importantupdate
Here’s the specifics on Team Performance.
For Team Performance members:
• All current members’ accounts, and their points, will expire at the end of their current membership.
• New memberships, membership renewals and auto-renewals are suspended in all stores and online.
• All current Team Performance Members can redeem points online at PerformanceBike.com and over the phone at 1-800-727-2453.
• All current Team Performance Members can earn points on purchases made online at PerformanceBike.com.
• There will no longer be automatic 2nd Business Day shipping on member orders. Upgraded shipping remains available for an extra charge and online orders receive free shipping on orders of $49 or more.
The Tualatin store was not honoring points and were pointing people to the Beaverton store as the store that would be accepting points. Now even the Beaverton store is out for that! Guess I’ll have to go to the website and find something to buy with my points, unless the website isn’t going to honor those either. Mark me as “frustrated”.
I find it ironic that a store like Performance that kept undercutting LBS businesses and taking over competitors like Nashbar and Supergo is now being undercut itself by other cheaper online retailers that refuse to sell out to them, like Jensen, Bike24, & Wiggle.
Hate to be blunt, but:
1. A lot of folks saw this coming.
2. While I’m sorry for the workers, I’m also not really invested in the success of for-profit bicycle retail anymore. The industry continued for far too long to rely heavily on the trickle-down in design from racing, and to pursue a highly unsustainable business model of annual “upgrades” and “innovations” for decades.
There are thousands — maybe millions — of used bikes languishing in garages and attics across the country, and they can be fixed up and made rideable again. The bicycle industry leaders have been absolutely irresponsible, selling the idea of constant newness to buyers who want to own the latest and lightest stuff so they can ride it to and from work and be cool. As a buyer for a shop, I would repeatedly ask dealer reps and US distributors of parts why they couldn’t keep older parts in stock for a few more seasons so those older bikes could be made to work again. I was told repeatedly that I should focus less on sustainability and more on profitability, and that meant selling new bikes and parts instead of keeping “older technologies” going.
2a. I am THRILLED about the demise of Interbike. It was an obscene wasteland of excess and absurdity. Two visits to Interbike in Las Vegas were all I needed to know I could not buy into the steady growth business model anymore.
3. I derive great pleasure in saving old innertubes, patching and reusing them. I get a thrill out of straightening bend derailleur hangers, bringing bent wheels back to rideable trueness, and soaking seemingly rusted chains in non-petroleum solvent overnight to bring them back to life for a few hundred more miles. My bikes won’t win races, but that’s not their purpose, nor mine.
I still believe that bicycles used as transportation can help save us, if only more people would go back to getting their hands dirty and repairing what they own instead of rushing out to replace it so soon. It’s not just the bicycle industry that will take this tumble, but every retail stream that depends upon frequent consumerism.
The solutions are many and complex, but they all boil down to consuming less, repairing more and living far more simply than most of us are prepared to do right now.
Your mileage may vary, but only for awhile.
Rubber side down and happy riding!
n cheers for simple. I just hope enough people (including me) are prepared to be unprepared for the simplicity that will inevitably come galloping up in a dust cloud and, with a tip of the hat, say, “welcome to 1885, pardner!”
Or something like that.
Well put. Greed is what killed Performance bike shop.
>>The closure leaves Portland with just one bike shop (Outer Rim Bicycles) east of I-205.
There are 2 within sight of I-205. BikeGallery on 82nd and REI at CTC , and there is (was ??) one at Clackamas Promenade (by Nordstrom Rack) . Also a pretty good one on 82nd , Clackamas Cycles . (across from Burger King)
Not quite as bleak as made out.
Sad news. Nashbar was popular item. their service was good. any update new about them?
No update yet as it has been over a year now.
Yes, You are right! I totally agree with you. Did You Find Any Update?.