Under the corporate entity of his Next Testing company, former Pacific Cycle CEO and founder Chris Hornung purchased the assets of the former Lamar Fitness company at a Veteran's Day bank auction.
The final price was $450,000 for assets and accounts receivable rumored to be worth more than four times that sum, although repossessed goods at a bank auction often go for as little as 5 percent of the value, experts told SNEWS®.
Reached only a couple of hours after the Denver auction concluded, Hornung told SNEWS® from his Madison, Wis., office that he wasn't ready to announce his plans for the assets, which included properties such as name, trademarks, inventory and parts. He said it was his purchase, not an acquisition by the athletic testing company Next Testing (www.nexttesting.com) he owned, and that it was on "a speculative basis."
"I believe the 'Next' chapter in the Lamar Fitness business failure will be well received by both consumers and retailers," said Hornung, whose former Pacific Cycle company had a small fitness equipment line. "I would not have gotten involved if I didn't think that I could improve the situation for retailers and consumers."
He said once his staff sorts through the equipment in the warehouse to find out what exactly is there, he will do what he can to get the parts to those who need them. However, he said, the acquisition was only of the assets, not liabilities such as warranties. Still, although he will have no obligation to do anything with warranties or service, he added, "I'm not saying we won't."
He said retailers should "be patient" and that he expected news of the next step very soon, adding it would certainly be an improvement over the current situation of the last few weeks that has left retailers in limbo. SNEWS® has been contacted by a number of consumers and specialty retailers seeking help on parts, service and warranty registration.
"I'm hopeful (the inventory and parts) will end up in the hands of people who will provide some service and support," he said. He declined to confirm or deny the possibility that the Lamar company's former manufacturers might be involved, but said that a partnership or cooperative arrangement with Star Trac, where Kevin Lamar and most of his executive team from his company now works, was "not likely."
The auction was more of a formality than a real auction, occurring in a mostly shut bank building in downtown Denver early on the morning of a federal and state holiday. Although the bank representative was in her office on the 21st floor, a SNEWS® reporter could not get out of the lobby and no other potential bidders or attendees were present. Legal experts have told SNEWS® that Colorado law requires a bank to sell repossessed property at a public auction to the highest bidder to eliminate any possibility of the bank playing games or ripping off the former owner, who may still have some financial responsibility for funds owed the bank.
SNEWS® View: SNEWS® will keep its readers posted about the status of the goods although we have heard plans are firming up quickly. Meanwhile, Hornung was unable to supply any contact information that retailers could call for information or help. Knowing that Hornung's reputation in the fitness and bike industries is a good one, we believe he will do what he can with the parts he acquired, perhaps working with another party in a licensing arrangement or in another partnership. Independent bike dealers, who had as a whole found good equipment for their needs and price range in the Lamar line, still need something they can carry. We suspect that market has not gone over the head of Hornung, who of course has tight ties to the bike industry, just as Lamar did. But tight ties mean bridges can also be burned -- sometimes quickly --since the industries are small enough that there isn't a lot of room to err. If somebody doesn't jump up quickly to make sure those dealers, both bike and fitness, who took the step to take on the new Lamar line when it debuted three years ago are taken care of, they may be too embittered to stick with it. We hope a resolution is a speedy one, and SNEWS® will keep its readers posted.