GO LITE into chapter 11

[Davidf61]

Seems a bit of financial drama for GO LITE, seeking bankruptcy protection in the U.S. Link wont work, sorry, may have to google for more news.

Actually have a friend in the states at this moment picking up a tent for me, hope it still works out

[walkon]

If you haven't ordered one from the company you should be right, otherwise fair odds that you can get the tent cheaper cause they've gone broke. With no warranty of course. Good luck either way

[South_Aussie_Hiker]

I hope the reoganization works out, would be a shame if it didn't.

[blacksheep]

What do we think of operators thank act this way ( chapter 11, voluntary receivership etc), to wiggle out of debts, leases etc and later carry on in business with the real damage felt by innocent suppliers, landlords etc , never to get what's owed them? I can't fathom the poor character this must take.. Do you continue to support businesses and business owners that operate like this? Go-lite can go jump.

[Don R]

Re Chapter 11 and voluntary receivership, it doesn't necessarily mean that a company goes under without paying its creditors. There are numerous examples where a company in either Chap 11 (US only) or voluntary receivership trades its way out of trouble. In the US, Chapter 11 can be used to do a successful restructure of an ailing business (e.g. General Motors, or the US Kmart) by stopping sometimes an overly aggressive creditor or creditors from burying the company over one debt. However one worrying aspect of Golite's' business has been its frequent unavailability of gear such as tents (esp. Imogene series), so perhaps they have serious supply train problems... BTW I have a Golite Pinnacle pack and it is a really good ultralight pack (wish it had more back support, the Macpac AMP 40 is better that way but about 50% heavier). Have to wait and see.

[madmacca]

What do we think of operators thank act this way ( chapter 11, voluntary receivership etc), to wiggle out of debts, leases etc and later carry on in business with the real damage felt by innocent suppliers, landlords etc , never to get what's owed them? I can't fathom the poor character this must take.. Do you continue to support businesses and business owners that operate like this? Go-lite can go jump.

When a company gets into financial difficulty, somebody, somewhere is going to wear some pain. There's no way around that. The question is how much pain, and how that pain gets distributed.

An emotional response is to label this as "wriggling out" and want to somehow "punish" the business owner/manager.

A more rational approach is that a company is nearly always worth more as a going concern than it is closing it down and selling remaining stock at fire sale prices. And an orderly process that allows the interests of ALL creditors (not just the vocal ones) to be taken into account, identifies whether a few specific actions (eg. closing down a single loss making division, writing down a season's worth of stock, additional funding to work through a short term cash flow issue, etc) can fix the problem, etc. or sale of the business as a going concern will often return 40, 60 or even 80 cents in the dollar to creditors. A closure and fire sale may only return 2 or 4 cents in the dollar. Voluntary administration, chapter 11, etc. allows more rational decisions to be made, and is in the best interests of creditors. Less pain, and more equally shared. Equity holders (owners) will typically come off far worse than creditors in this process. For a supplier, writing off 20% of a debt can hurt. Writing off 95% can be fatal.

"Phoenixing" (where the valuable assets are transferred to another entity controlled by the previous owners, who use them to start a similar business from the ashes while leaving creditors with an empty valueless shell in the original company) is an issue in some industries. But I very much doubt this is the case with Golite.

Think with your head, not your heart. on this issue.

[photohiker]

I think you have to have been one of the creditors to understand.

Having been at the receiving end of that situation, there is no worthwhile benefit to the creditors when something like this happens. There may be a benefit to the owners, employees etc of chapter 11. Suppliers have provided materials to the business in good faith and simply have to take the loss. It is not the suppliers' responsibility to run their customers business prudently and profitably so that bills will be paid when due. In the few times I have had to bear this, the behind the scenes story comes out in the meetings and it has always been the result of poor management, lying and betrayal. It seems that blacksheep has also been through this process and I can understand and agree with his position.

Looking at Go-lite's recent behaviour in the marketplace reeks of these failures.

Documents filed with the U.S. Bankruptcy Court in Colorado show that Coupounas LLC, which does business as GoLite LLC, had upward of $4.9 million in unsecured claims. The company's total liabilities are under $10 million, according to the filing made Oct. 13.

GoLite listed its assets as between $1 million and $10 million. As of Friday, the company had not filed detailed financial records with the bankruptcy court.

Co-founder Demetri "Coup" Coupounas was unavailable for comment on Friday, but company officials say the 16-year-old firm expects to emerge from the reorganization bankruptcy in a stronger position.

"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," Jon Underhill, GoLite's spokesman, wrote in an emailed statement to the Daily Camera.

The company's employees would not be affected, Underhill said.

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., owed just under $457,700; and Li & Fung (Trading) Ltd., owed nearly $440,000, according to court records.

Additionally, several of the creditors holding the largest unsecured claims were operators of retail centers.

GoLite's attorneys listed 13 leases the company sought to "reject." Those included shops in outlet malls such as the Cabazon Outlets mall in Cabazon, Calif., and the Aspen Grove Lifestyle Center in Littleton in addition to retail spaces in cities such as Aspen and Colorado Springs.

http://www.dailycamera.com/boulder-busi ... ganization

"Restructure debt" a euphemism for having a financial problem and pushing it on to someone else, like the HK supplier who would have paid for materials and labour to make GoLite products and has not been paid US$1.34M and may never be paid. As we are all probably aware, suppliers like these operate on very small margins. They now have to carry on in their own business (if they can) knowing that they have paid their own employees and suppliers expecting to be paid themselves in good faith but they have been shafted. I'll bet they are thinking with their head and not their heart.

[phan_TOM]

Seems a bit of financial drama for GO LITE, seeking bankruptcy protection in the U.S. Link wont work, sorry, may have to google for more news.

Actually have a friend in the states at this moment picking up a tent for me, hope it still works out

Well if it falls through David I may consider selling my SL3 for, say, one,.. million... dollars...

dr evil.jpg (22.42 KiB) Viewed 28419 times

It's actually a bummer as I love my SL3 and wouldn't have minded getting an SL5 for a light and fast car camping tent.

[wayno]

i saw Phil Werner of Sectionhiker post some comments on facebook that it didnt surprise him, he thinks the business hasnt been run well for a long time..
i wonder if the ultralight gear market is getting more crowded and competitive for the business of a limited no of clientelle. people are queing up to buy gear from some companies who can't make gear fast enough to keep up with demand.
bigger companies are starting to take a slice of the market as well now, its traditionally been cottage industry based.

[Franco]

“How did you go bankrupt?"
Two ways. Gradually, then suddenly.”
― Ernest Hemingway


I believe that Golite was in trouble already in 2006 when Demetri Coupounas not only sold the shoe division to Timberland he also sold the Golite name to Vanity Fair
So since then it, (the D Coupounas company) sold products using the name Golite under licence.
( Vanity Fair Corporation , the owners of TNF , Timberland and many other companies, not the magazine)

BTW, having worked for a very successful business ,for over 20 years, that later on went bankrupt and having had the opportunity to have my own light weight gear business, I am glad that I did not take that opportunity.
It is a LOT harder than many realise.

[beachcruiser]

I agree with Franco, I think the Golite brand lost it's way when it was sold, the Timberland footwear partnership was a disaster, the design concepts were good but product durability wasn't right (the company I work for was the Aussie distributor and most of our stock was shipped back). Coup (Demetri Coupounas) and his wife, who continued to run the equipment side of the business had their hearts in the right place, building functional product for ULers but even in large population country like the USA it's hard to run that business model manufacturing you product in China it's hard to reach viable product minimums and it sounds like this is where they fell over, they tried to be a more 'general' brand - I went to a Go-lite store in an outlet mall in Utah in August, it was only a new retail centre but the Go-lite store had a 'closing down' notice - most of the gear on the racks was not true UL gear but also wasn't 'fashion' which most foot traffic in this mall would look for (there was a Columbia Store, Nike, Oakley etc plus at least 30 other fashion stores and a massive Cabelas store next door) - they didn't have the brand name attraction of a North Face or the brand strength of Columbia. Seemed like they were trying for a bit of a brand cult following with some weird retro pieces but without the brand heritage of someone like Patagonia it's hard to make that work... I think it's the sad fact of a brand that got to big for it's boots, starting off with a clear vision, good, functional product and loyal customer base then trying to grow too fast which forced them to widen their product offering which watered down their core product and values…
The brands that are succeeding in the UL game are those that maintain the cottage industry (local) manufacturing and direct to consumer approach and stay true their UL roots.
Just my 2 cents worth…

[Franco]

Just to be clear, Coup did not sell Golite (the company) to Timberland , just the name "Golite".

[wayno]

totally different ball game going from an online shop to physical shops... they need to market themselves properly to make sure they get the extra business to cover the much higher overheads especially if you're in a popular location with high rents... a lot of cottage industries have negligible marketing costs and can make a living by word of mouth and the online walking community. they can get by selling to a niche market, open a shop and you have to sell to a much larger clientelle and often a bigger range of clients.. the comments above about their shop show some of the problems they had with their shops.
its a hard task to compete with the massive marketing budgets of the big companies that are already established and are making a wide range of gear for the general public.
look at what you can do with marketing, look at red bull. they are selling sugared cafeinated water.. extremely successfully because of their marketing and advertising campaign.
i remember a few years ago reading about markt share for various cigarette companies in Aus. in various states a different company would have a massive market share , up to eighty or more percent of the market, and they would also be the company sponsoring rugby league in that state... On the flip side, get your marketing wrong and you'll loose money just about as fast as the popular companies can make it...

[beachcruiser]

Doesn't sound like the Golite brand will be around much longer...

http://www.snewsnet.com/news/timberland-terminates-golite-trademark-golite-moves-to-liquidate-unless-competing-bid-arises/

[icefest]

Doesn't sound like the Golite brand will be around much longer...

http://www.snewsnet.com/news/timberland-terminates-golite-trademark-golite-moves-to-liquidate-unless-competing-bid-arises/

Interesting:

Today’s GoLite Footwear is a separate entity and not part of the bankruptcy or GoLite business. It’s trademark contract with Timberland continues.

[Franco]

It ended this morning :
http://www.dailycamera.com/boulder-business/ci_26932471
Their website crashed (or was taken down) soon after they posted a 20% off "going out of business" sale.

[rocketrm2]

Interesting discussion,
perhaps some of their odd business practices are indicative of some incompetence. When I tried to order on line my credit card was not accepted because it was not a USA card, which meant I had to phone to buy "on Line" they told me that they sell a lot of their products to Australians and hope these sales to will continue. I suggested that they offer Pay Pal for purchases.
they replied and said that they will using Pay Pal soon, after 6 months still no Pay pal or the option to use your Australian credit card on their on line store. BTW the sales to Australians is small but not micro, eg Tarp tents 5% of their sales is to Australians. Most business'es i know would be pleased to expand their market by 5 %. But any way sad to see Go lite go, and their site crash missing on few good buys (me0

[Don R]

Hello all,

For those still interested in buying Golite tents check Alpkit (https://alpkit.com/featured/tents). It appears that Alpkit is sourcing tents from the former manufacturer for Golite. For example, Alpkit's Ordos looks identical to the Imogene 2.

[Franco]

Yes, when I commented in the UK forum that those tents had a previous life as a Golite product (or words to that effect...), the Alpkit rep confirmed that they are indeed the same with their own name on them.

[wayno]

they posted this on their facebook group

Founders of GoLite will start a new company, looking to become a global manufacturer of innovative and responsibly-made apparel and equipment designed for the outdoors. They strive to be a leader in terms of channel distribution, technical performance, and sustainable business practice.
Maintaining their status as a Colorado based company, looking forward to seeing you on the trail.

[GPSGuided]

Moving forward, will business entities out there trust those "Founders"?

[wayno]

Moving forward, will business entities out there trust those "Founders"?

maybe, if they don't try and go back and open shops in high end shopping malls again...