March 22, 2011 (Vancouver, BC) – An empty Race Face booth at the recent Taipei Bicycle Show spoke volumes. The long-time Canadian bike parts manufacturer Race Face was no more. Hot on the heels of a sudden announcement that the company had gone into receivership was the presence of the unmanned booth at a major cycling industry trade show along with rampant speculation on popular mountain biking websites as to the real reasons for the company’s demise.

Yet the speculation has left far more questions than are answered in the company’s final press release – see below. One thing is clear – any hope for a revived Race Face now rests in the hands of whoever is willing to buy the brand and rebuild the company.

The Canadian accounting and business advisory firm of Grant Thornton, which is handling the receivership, informed approximately 50 Race Face employees on March 14th that they were laid off effective immediately and the assets of the company would be liquidated.

The official press release from Race Face characterized the situation as “complex” stating, “…basically the company recently got offside on its borrowing base with the bank. The partners in the company tried to structure a deal with the bank to get the company back on side but unfortunately, a deal could not reached. In this event, it was hoped that the company could be sold as a ‘going concern’ but this solution also did not materialize.”

Some industry insiders are pointing to developments such as Giant Bicycles’ decision to spec bikes with parts manufactured under their own brand name rather than Race Face components as a blow to the company’s fortunes. But according to a report in the New Westminster newspaper the Royal City Record (the city where Race Face had it headquarters) Derek Wills, Race Face’s former North American sales manager and director of operations was expecting healthy 2011 sales, saying, “There was no big reason for Race Face’s demise other than investor’s failure to recapitalize. [Management] had not owned up to some losses for the last five to 10 years and they hadn’t gone out to the market for additional capital.”

Wills also noted that some employees are out of pocket for things such as travel expenses and vacation and severance pay entitlements, while others were stranded in Taiwan and had to pay their own way back to Canada. At Mountain Equipment Co-op, which stocks over 70 items from the Race Face catalogue, spokesperson Tim Southam said they were also surprised by the sudden failure of the company.

“We’re just taking stock of where things are at,” said Southam in an interview on March 22. “It’s unfortunate for Race Face and we’re disappointed, to say the least.”

Southam says that as far as he knows, MEC’s orders for Race Face product have been filled, but cautions that there may have been orders placed just prior to the receivership announcement and the outdoor equipment retailer is still working through the details of the situation. He says any warranty claims will be covered under MEC’s ‘Rock Solid’ guarantee policy and if they can’t replace a Race Face branded item, then a product of similar features and quality will be substituted.

Further muddying the waters, the Race Face website was shut down in the days following the announcement but is now back online, with blog entries dated as recently as March 19th, while the company’s Facebook page is also still available to users.

As recently as Feb. 18, Race Face was announcing sponsorship deals such as a two-year contract with free rider Aaron Chase. Race Face had a number of notable riders in its sponsorship roster including factory riders Brett Tippie, Wade Simmons, Geoff Kabush, and Marie-Helene Premont, as well as many others at the international, national, grassroots, and industry levels.

Official Release

Race Face – The End of An Era

Effective March 12 2011, an end of an era occurred as Race Face Components Inc. went into receivership. Effectively this means that Race Face’s bank, The Bank of Nova Scotia, has taken control of the company, appointed a receiver, and will sell the company and its assets. The receiver, Grant Thornton, will determine a sales process for the company in the days to come.

The reasons for the receivership are complex but basically the company recently got offside on its borrowing base with the bank. The partners in the company tried to structure a deal with the bank to get the company back on side but unfortunately, a deal could not reached. In this event, it was hoped that the company could be sold as a ‘going concern’ but this solution also did not materialize.

Craig Pollack, Race Face’s former President and CEO, comments, “it is a sad sad outcome for the brand, but more importantly for the people involved with the company. I personally thank all of our staff, riders, suppliers, customers, and consumers for their support over the years. Our talented staff truly were the backbone of this brand. I have been humbled by their loyalty and determination throughout this process and wish them well moving forward.”

Pollack adds, “Race Face, started in 1992, is an iconic brand and has been instrumental in creating the fiber of the mountain bike industry. We are proud of our accomplishments over the last 19 years. Hi-lights include: helping to create the free ride mountain biking movement with our line of Diabolus components, being one of the first component suppliers to design parts for the All Mountain market, and currently producing the Next line of carbon fiber cranks – the lightest production crank-sets ever produced.

The company will undoubtedly be sold to a new buyer, and the brand, as we know it today, will forever be changed but we are proud of the Race Face legacy and the impact it made on the mountain biking industry and community.”