A Redmond-based online gear retailer, that allegedly owes over $1 million to five Portland-area footwear and apparel brands, has filed for Chapter 11 bankruptcy reorganization, as reported by The Oregonian, The Bulletin and Outdoor Magazine.
Altrec Inc. will have its first court hearing in January. Motions will be heard on selling the company and its assets. According to the court filing assets are valued at $3.25 million.
The bankruptcy petition was filed on January 6 in Portland.
Some of the creditors listed include $318,456 to Keen Inc., the Portland footwear company; $252,086 to Sorel, the Columbia Sportswear Co. footwear subsidiary; $220,372 to Mountain Hardwear, another Columbia subsidiary; $214,034 to Icebreaker Nature Clothing Corp., the New Zealand company with its North American headquarters in Portland; and $186,549 to Columbia Sportswear Co.
The Burton Corp., The North Face, Arc'teryx Equipment Inc., and Patagonia are also listed as Altrec's creditors.
Remington Outdoor Company is listed in court filings as a possible future purchaser. The company has loaned $1 million to Altrec; allowing them to remain open through the month of March.
According to Clyde Hemstreet, who is working as the chief restructuring officer, the trouble began during the 2011 Christmas shopping season when a hacker stole Altrec's customer's credit card information. Further hacking led to the website falling off of Google search results.
Cash flow was disrupted through to 2012 because of the cyber attacks on their website according Hemstreet. Leaders in the company tried to find investors in 2013 but were unsuccessful. The company also lost their line of credit.
It is Remington's desire, according to Hemstreet, to successfully win the bid for the company, maintain the business in Redmond and keep all of the employees working. An auction of the website is scheduled for February 20, with minimum bidding starting at $500,000.
Altrec Inc. was co-founded in March of 1999. The current chief executive officer is Mike Morford, there are 40 employees and the company earns an annual revenue of $12.5 million.
Altrec, not unlike Portland's The Clymb and Salt Lake City's backcountry.com, used a marketing strategy that included incorporating blogs and videos about the adventure of the great outdoors in their website, GreatOutdoors.com. The titles of some of the articles are: "Around Mount St. Helens in One Day," "Rafting Idaho's Salmon River" and "Classic Hikes of North America Photo Gallery."
Merchandise from Altrec is currently being sold through eBay and Amazon during the bankruptcy.
According to the court filing Altrec has approximately 2.8 million customers and 900,000 of them routinely receive emails regarding new products.
Sales via third-party gear retailers, and specialty retailers, has allegedly grown according to the Outdoor Industry Association. Specialty internet sales were reportedly up 14.6 percent in 2013 over 2012.
If you are struggling with personal debt, or in your business, do yourself a favor and contact a bankruptcy attorney for help. The sooner your debts are settled the sooner you can exit from bankruptcy and begin again.