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After unsuccessfully attempting to sell the business earlier this year, then filing for Chapter 11 reorganization bankruptcy last week, GoLite is moving to liquidate the business unless a competing bid surfaces.
One hitch to GoLite’s reorganization, which typically would involve a sale of the business, is the fact that Timberland owns the GoLite trademark. The inability to sell the trademark (which GoLite sold to Timberland in 2006) likely made the rest of the business a tough sell.
On the list of the unpaid by GoLite, Timberland moved to terminate its GoLite trademark license with the company following GoLite’s bankruptcy announcement last week.
“Debtor has no funding for new inventory and thus is already in a liquidation mode,” GoLite officials said in the latest court filings. “Debtor cannot sell product with the GoLite brand after March 31, 2015.”
GoLite lead lender GemCap has proposed selling off the remaining inventory at auction to Hilco Merchant Resources, which plans to conduct a going-out-of-business sale during the holiday season.
Under the agreement, Hilco would pay 65 percent of the of the aggregate cost value of the merchandise being sold, or an estimated $780,000 to $877,500, in addition to funding the expenses of the sale, including rent, payroll, utilities and advertising.
The deal is subject to higher competing bids, due to the court by Nov. 10.
The latest court documents also reveal GoLite’s earlier attempts to sell the business, starting in March 2014, when it sent an investment summary to 60 investors. Eventually, seven investors looked in diligence, but after an April 30, 2014 deadline, no bids were received. GoLite reached out to 40 additional sources, including “existing retail apparel companies,” through which talks with one investor emerged, but was terminated in late July.
Documents show that GoLite reported sales of $14.4 million in 2012 and $17.7 million in 2013. It reported sales of $8.7 million through Sept. 30, 2014, before the all-important holiday season. It owes nearly $5 million to its 20 largest unsecured creditors, mostly Hong Kong-based manufacturers and the landlords of its stores.
GoLite closed eight of its 14 stores after last week’s bankruptcy. It had as many as 20 stores at one time.
Founded in 1998, GoLite set the early standard for ultralight gear, including packs tents and apparel that employed lightweight materials and utilized a stripped-down design ethic. In 2012, after seeing success from its holiday warehouse sales and growing e-commerce business, GoLite switched to a direct-to-consumer model, opening storefronts and continuing some of its holiday warehouse sales across the country. Demetri Coupounas, has remained the president of GoLite, while Kim Coupounas left her official duties with the company in January to take a job as director of B Lab, a nonprofit helping brands achieve benefit corporation status, of which GoLite is.
Throughout its years, the company also took advantage of unconventional business strategies. In 2006, the brand sold the GoLite trademark and its footwear line to Timberland, which then licensed back the name to GoLite, and later sold the footwear business to New England Footwear.
Today’s GoLite Footwear is a separate entity and not part of the bankruptcy or GoLite business. It’s trademark contract with Timberland continues, however company officials tell SNEWS they made the decision (even before the unaffiliated GoLite bankruptcy) not not to renew the GoLite Footwear trademark moving forward. Stay tuned to SNEWS for more on this development.
Officials with Timberland, now owned by VF Corp., confirmed that the company still owns the GoLite trademark, but declined to comment further. Court documents list Timberland on the list of unsecured creditors owed money by GoLite.
While company officials declined to speculate, even if the current form of GoLite were to go out of business, it wouldn’t necessarily prevent Timberland/VF from resurrecting the brand itself (outside of footwear) or selling the trademark to another party to restart the apparel and gear end of the business.