Alex Koger, Rocky Mountain Bikes' former chief product officer, says he was a little surprised when he got the call just before the Christmas holidays to learn he was being temporarily laid off from the company.
The bike maker had recently let go of several employees, and Koger thought his job would be safe because there weren't already many people left to maintain operations in North Vancouver, where the company does design, prototyping and marketing.
But the layout call he and about a dozen others received came on the eve of a creditor protection filing in Quebec Superior Court, where Rocky Mountain Bikes' parent company, RAD Industries Inc. revealed his dire financial situation.
According to court documents filed in Quebec, where Rocky Mountain has kept its St.-Georges headquarters since purchasing the company from its Vancouver-based founders in 1997, the company's financial difficulties are the result of a major drop in demand for bicycles following Covid-19. 19 Epidemic.
RAD Industries' debt increased from $48.2 million in fiscal 2022 to $68.7 million in 2024. And while the company continues to see operating losses, according to court documents, the bike brand's future is closely tied to British Columbia's world-renowned style. Freeride Mountain Biking Uncertain.
Epidemic pressure
During the initial pandemic, global demand for bicycles increased, but supply chain problems soon followed, leading to shortages of bike parts for both consumers and companies like Rocky Mountain.
“The pandemic boom was a global phenomenon. People were locked in, they wanted to go out, everyone went and bought bikes,” said David Cathcart, Rocky Mountain's recently fired chief commercial officer.
Cathcart says it took as long as 600 days to deliver some parts because warehouses were empty. As supply chains began to seize and inventory began to arrive, lockouts lifted and demand “fell off a cliff.”
Court documents describe RAD Industries' situation, including excess inventory, significantly discounted bikes and the need to borrow more money.
“It's like 'how long can you keep the water flowing' for companies,” Cathcart said. “That's why you see smaller companies that don't have the same capital resources not being able to catch on.”
Raymond Dutil, owner of RAD Industries, says problems at his company began in March 2023, when American bicycle giant Specialized began discounting bikes.
“Those guys are dominant, we had to respond to them,” Dutil said, adding that a $1,500 bike had to be sold for $1,200.
Cathcart says there were other complicating factors that put the company in a tough position to weather the market turmoil.
According to court documents, Rocky Mountain took a $17.8 million loss from a failed venture to supply e-bikes for the bike share company in 2023. That was part of an $11-million net loss for the Rocky Mounties that year.
BC operations affected
The origins of the Rocky Mountains are traced back to 1981 in Vancouver. The company was a major part of the growth of mountain biking in the 1980s and 1990s, closely identified with the rugged, technical downhill style that developed in the mountains north of Metro Vancouver. edge
Steve Savage, general manager of North Vancouver bike shop Steed Cycles, says his business became a Rocky Mountain distributor three months before the company entered into debt security.
“They've always been a brand that's been on our radar for a long time — obviously the iconic North Shore brand,” Savage said. “My first real mountain bike was a Rocky.”
Rocky Mountain bikes were the first to be designed for what Savage describes as really aggressive freeride trails. He says it was this style of riding that eventually evolved into the bike park and helped drive the growth of mountain biking around the world.
“It's like ground zero back in North Van for a lot of people,” he said.
The company also has a very desirable website address www.bikes.com.
But the future of the North Vancouver Rocky Mountain facility is now uncertain. Koger says the lease is up next month and the remaining staff is busy inventorying equipment and tearing down the office.
Dutil says the company is trying to find a new space that is half the size of its current North Vancouver facility.
“I hope North Van Staff will return,” he said. But nothing is known about the next three months.
“For me, Vancouver is very important,” Dutil said, “When I bought it in 1997, people were afraid we'd move the company, but it was very important to me to keep it in Vancouver.”
However, it is not clear whether Dutil will remain the owner of the company even after the restructuring. He says he hopes to find a partner to make the bid and keep the business in his family.
Cathcart says he hopes the court-ordered process, which is expected to be finalized in April, will be “proper stewardship of the brand.”
“What I'm hopeful about is that it actually ends up in the hands of someone who can nurture it the right way,” he said.
