Editor's note, Jan. 29, 2016: The Guru auction is tentatively scheduled for Feb. 9. The auction will be conducted by Auctioneer Continental in Montreal. There is more information is on their website, including a folder of photos of equipment to be auctioned.
St. LAURENT, Quebec — Guru Cycles will not be continuing under its current ownership; its remaining assets, including its trademarks and manufacturing equipment, will be auctioned next month.
The company told its dealers in December that it was hoping to reorganize after incurring unmanageable debts stemming from a factory move early last year. The company made an initial bankruptcy filing with a Montreal court just before Christmas, listing debts of CA$1.1 million ($789,000).
Owner Ted Matthews told BRAIN this week that attempts to line up an invester were unsuccessful.
"We're going to be closing for good and the assets are going to be up for sale" — Ted Matthews
"We're going to be closing for good and the assets are going to be up for sale at auction the week of February 8th," Matthews said on Tuesday. "It's very sad but I guess you've got to move on."
Guru's remaining staff was let go this week. The company has sold off most of its remaining inventory to dealers and consumers, he said. Assets that will be auctioned include Guru model name trademarks (but not the Guru name, which is owned by Dorel), and factory and office equipment including a paint booth and various fixtures and furniture. Guru was leasing its factory, so that is not being auctioned.
Matthews said moving to the new factory last year cost about double what was planned and took about 90 days — two or three times longer than planned.
"That probably cost us $300-400,000 in sales," he said. He said despite a strong product line introduced in the fall, the company was cash strapped and unable to buy products from its vendors.
Guru, traditionally a custom frame maker, had planned to hit lower price points with complete stock bikes for the first time, thanks in part to having some models made in Asia. "The product was very strong, very well priced," he said.
"This is a tough business. We had a great product, it's a shame we could not survive."
Tony Giannascoli, then an engineering student at Montreal's McGill University, co-founded Guru in 1993 with Robert Pinazza. The brand quickly built up a reputation with regional road racers and triathletes, and offered custom bikes made with all the popular frame materials, carbon, titanium, aluminum and steel, out of its Montreal-area factory.
However, Guru was in receivership in 2009 when Matthews — who has a background in consumer electronics distribution — bought its assets and formed a new company. Giannascoli and Pinazza remained with the new company as shareholders until recently.
In 2012, the company sold the Guru trademark and its bike fitting technology, including its motorized fitting bike, to Dorel; it has been licensing the Guru brand back from Dorel for a nominal fee for use on bicycles, while Dorel's Cycling Sports Group is using the Guru brand for its bike fit business.
Court filings show Guru's major creditors include TD Bank ($370,000), Topkey China ($129,823), Matthews ($88,854), Shimano Canada ($69,717), Cycling Sports Group ($32,247), and Fibertek Composite ($23,093). Other smaller creditors come from across the industry, including Rodale Publishing, Enve, Cycles Lambert, Full Speed Ahead, Hutchinson and Outdoor Gear Canada.
Montreal's Litwin Boyadjian Inc. is the trustee.
