A combination of factors have converged to exert a devastating result on downtown Dearborn. These photos are all within an eight block radius of our store.
Q. Why did you close?
A. A number of factors converged to make Bikesport, Inc. close. Had all of these factors not happened within the same time period Bikesport, Inc. would have survived. It was the convergence of these factors that ultimately lead to our closure. The primary contributing factor was a “reserve account” established by our credit card processing company during the height of the U.S. financial crisis.
The factors that lead to our closure, in chronological order, are:
- In October of 2008 a key employee suffered a stroke and heart surgery. They recovered completely but operated in a diminished capacity following the stroke and surgery. As a result it was difficult to maintain normal operations in the months during their recovery.
- On January 26, 2009 our credit card processor began accumulating a “reserve account” of $60,000.00 cash as security against a weakening economy and the potential inability of Bikesport, Inc. to maintain operations as the economy worsened. There were no commensurate outstanding liabilities to our processor for any amount.
- In June of 2009 a bike brand that accounted for nearly 50% of our overall gross bicycle sales discontinued their distribution through our store citing distribution practices that violated new amendments to their dealer agreement.
- In September 2009 Bikesport, Inc. enlisted the services of an agent experienced in corporate restructuring and securing operating capital to assist with the continuation of normal operations until funds held in the reserve account could be recovered. Seven days after he was contracted he was hospitalized for one week delaying the ability to restructure and refinance.
- In early October 2009 our factor agent had secured capital to insure the survival of Bikesport, Inc. when the source of the capital closed after a chain of businesses they were funding declared bankruptcy. This removed the availability of operating funds.
- In November of 2009 Bikesport, Inc. consulted with three separate attorneys concerning the viability of suing our credit card processing company for holding customer payments to Bikesport, Inc. The day after one of these attorneys contacted the credit card processing company they discontinued processing payments for Bikesport, Inc. and notified us that funds would be held for an additional 6 months.
All these factors combined in under 12 months set against the backdrop of the global recession and the impact on the local economy in one of the areas of the U.S. hardest hit by the recession proved to be unsurvivable.
Questonable bank practices, foreclosures, a suffering automotive industry, a depressed local economy with extremely high unemployment along with other factors have converged on downtown Dearborn. All of these photos are within four blocks of our store shot on a weekday morning at 11:00 A.M..