Last week Golite filed for Chapter 11 bankruptcy protection. The Boulder-based outdoor clothing and gear manufacturer had been in some trouble for a while but the news of bankruptcy comes as a shock at least to us.
While the company said that employees would not be affected, Golite was seeking to “reject” at least 13 leases and the number for their California Cabazon outlet store has been disconnected.
In an email to the Boulder Daily Camera, spokesman Jon Underhill stated, “Golite has filed Chapter 11 in order to restructure debt to support a healthy, profitable, growing company best able to serve our customers with great lightweight outdoor apparel and equipment for many years to come.” The company has since gone into liquidation mode.
Additionally, the Daily Camera stated that “Golite’s largest unsecured claims are held by Hong Kong-based manufacturers, exporters and suppliers including A Garment (H.K.) Ltd., which was owed nearly $1.34 million; Hanoman International Ltd., owned just under $457,700; and Li & Fung (Trading) Ltd., owed nearly $440,000, according to court records.”
While chapter 11 allows the company to keep its assets and continue to run its daily operations, the road can be long and complicated. A US Trustee will now appoint a committee to represent the creditors and stockholders while the reorganization takes place to pay back a portion of their debt.
Golite’s business model was to sell outdoor clothing and gear at wholesale prices. While this is excellent for consumers, it means thin margins and very little room for error. Overreaching on new products or expanding too quickly can lead to disastrous results.
As a big fan of their gear we hope that they make a comeback and are here for years to come but only time will tell.