IN BRIEF
Source BMX, one of the names that count in BMX retail in Europe, is in liquidation. Its founders, brothers Rich and Marc Moore, announced it to the British trade press: after an attempt to restructure, “liquidation was the only realistic course”. The business is not stopping for all that — the brand is starting again under a new company, with new capital and a “substantially leaner” structure, refocused on retail, e-commerce and content. The founders acknowledge that the move leaves suppliers and other creditors out of pocket, including businesses they had worked with for many years, and say they deeply regret it.
BMX does not take up much room in French cycling news, and that is a shame: it is a discipline that makes cyclists, shops and vocations. In Britain, Source BMX had become its centre of gravity over two decades. The retailer has just gone into liquidation.
Source BMX in liquidation: “the only realistic course”
It was Cycling Industry News that published the two founders’ statement. “Source BMX Ltd in its existing form was no longer financially viable and that liquidation was the only realistic course”, say Rich and Marc Moore, quoted by the British trade outlet. The company entered liquidation at the start of the month, after its directors had sought to restructure the business.
Two events weighed in, according to the same account: the closure of Source Park — the BMX and skateboard park run by the company — and the postponement of Battle of Hastings, the well-known competition the park hosts, while works deemed essential were carried out on the building.
A cost base built for a bigger market
The explanation the founders give deserves to be read across the whole industry, well beyond BMX: “ultimately we were carrying a cost base built for a much larger market than exists today”. In other words: the company had sized itself — with, among other moves, an expansion into the United States — for a market that today is no longer that big.
Source BMX is not an isolated case, according to Cycling Industry News: the after-effects of the major disruption at the start of the decade, combined with a difficult economy, have continued to close cycling businesses this year, and the trade outlet cites two cases — British distributor Saddleback, which went into administration this summer, and Accell, which filed for insolvency in early August. The return to normal is putting pressure on the businesses that stayed sized for the exception.
What starts again, and what is left behind
What comes next is already written, on paper at least: “Source BMX itself will continue under a new company and a substantially leaner structure, with new capital behind the business. The focus will be on creating a sustainable business around BMX retail, e-commerce and content, appropriate to the size of the market today.” Retail, e-commerce and content, then — a strand the brand itself puts forward, describing Source Park as “the location for countless new Source edits and videos featuring top BMX pros”.
The founders also address the thankless part of the affair. “We’re very conscious that the liquidation has resulted in losses for a number of suppliers and other creditors, including businesses that we’ve worked with for many years”, they write, adding that this is without question the hardest thing to bear in the story. In the list of casualties they draw up, staff come first: “It’s obviously very sad to see the original company come to an end after more than 20 years, and particularly difficult because of the impact on our employees, suppliers and other partners”. The two brothers also make clear they are staying at the helm: “Marc and I remain involved and our priority now is to make sure the business that continues is built on a sustainable footing”. In the arrangement they describe, the new company restarts with fresh money, while the old one’s suppliers absorb the loss.
The Cycling Industry News article puts no figure on the debts, the number of jobs affected or the turnover of the liquidated company.
