After years of growth and borrowing that culminated in a bankruptcy filing the week after his wife, Madeleine Dean (D., Pa.) was elected to Congress from Montgomery County last fall, Patrick Cunnane is out of his bicycle business.
Cunnane confirmed his departure — he’s hanging around to help with the transition until the end of March — after a group of investors including some of his Chinese creditors bought the company he headed, Advanced Sports Inc., for $16 million in a bankruptcy sale last month.
The buyer group, BikeCo,, includes New York retail-salvage firm, Tiger Capital Group, which liquidated Circuit City and Toys R Us; and Advanced Holdings, a Hong Kong sporting goods investor that was among Advanced Sports’ creditors in bankruptcy.
The buyers have kept offices and warehouses open at the company’s leased Northeast Philadelphia space in the 10900 block of Decatur Road, which has been sold to Florida-based real estate investor K&B under terms of the bankruptcy reorganization. Another company Amain.com Group, a California online retailer, paid $1 million for the company’s Performance retail and Nashbar parts brand, according to court filings.
The 102 Performance stores, which had employed around 1,600, began holding going-out-of-business sales during the bankruptcy reorganization last fall. At stores in Paoli and South Philly, phones rang unanswered yesterday, and the company’s website has taken down its store-location data.
Advanced Sports and its affiliates had owed creditors including Asian suppliers and U.S. lenders led by Wells Fargo more than $100 million according to their bankruptcy filings. Cunnane has been in the bike business since at least the 1990s, when his wife, the future lawmaker, was general counsel of Cunnane’s earlier bike business. He did not respond to a query about his plans.
Besides the distribution business, Tiger and Advanced Holdings bought Advanced Sports’ China-made Breezer, Fuji, Kestrel and SE Bikes brands.
Advanced Sports had warned Pennsylvania Labor Dept. officials in December they might lay off 60 of the 83 staff in Philadelphia, but most are still working, according to a person familiar with the operation.
Ryan Davis, a Tiger official who will run the reorganized Advanced Sports alongside former Cunanne lieutenant Karin Bliss under its new owner group, told Bicycle Retailer his company has “two warehouses full of in-season inventory ready to ship" and is eager to continue that part of the business.
The purchase of the Performance stores by Cunnane’s company and his partners, as part of a holding company called American Sports Enterprises, was a big factor in his group’s later bankruptcy, according to the company’s filings last year.
Cunnane had complained that Chinese bike imports — cheaper than his own when purchased by Americans over the internet, despite what he called questionable quality — were taking away his buyers.
Among the unpaid creditors in the bankruptcy was Taiwan-based Ideal Bike Co., which made most of its bikes at a plant in mainland China. Ideal had previously invested millions in Cunnane’s enterprises, at valuations that became the subject of investigations by Taiwan securities regulators.
During her election campaign, Dean complained of Trump’s aggressive trade and tariff strategy, which made it more expensive for importers such as her husband to bring in Chinese bikes from low-wage factories such as the one operated by Ideal in China’s southern Guangdong province.