Wells Fargo, which repossessed all the assets of Kevin Lamar's former company the first of September, has scheduled a public auction of assets.
The auction, which was announced with a small two-column ad in the Denver (Colo.) Post on Nov. 4, will be for "certain Lamar Health, Fitness & Sports, LLC exercise equipment inventory, parts inventory, Lamar's trade name and trademarks." Lamar lost the three-year-old company to the bank when accounting malpractices by the CFO were discovered, he reported. (Click here to see a Sept. 6, 2007, SNEWS® story, "Accounting malpractices by CFO forces Lamar Fitness to suspend operations.").
Since its sudden closure, Lamar and most of his management team have gone to work at Star Trac to beef up its consumer efforts. Meanwhile, several retailers have reported to SNEWS® they have not received a response about what to do for parts and service that are now surfacing. (Click here to see a Oct. 12, 2007, SNEWS® story, "Former Lamar HFS retailers still in limbo for parts, service.")
One consumer has also contacted SNEWS® about OEM equipment she apparently purchased at Costco telling us she can't reach the company using the number given, which is the former Lamar company number. Kevin Lamar told SNEWS® he and others have returned numerous calls and emails daily, but he added that his hands were basically tied: "The reality is, everybody wants an answer and I can't give them one," he said. As soon as somebody owns and has access to the assets, "We'll be in touch with our former dealers," he added, "and we'll do whatever we can."
The ad, which ran on page 29 in the legal notices next to an ad seeking bidders for heavy equipment towing, goes on to say that the lead bidder is Next Testing LLC, which has submitted a bid of $450,000. Bank representatives say it will award the assets to the Next company "or to the highest or best qualified bidder." The opening bid will be $475,000, and each successive bid shall be in increments of not less than $25,000, the bank stated. That final disposition is set to occur at the auction on Nov. 12, 2007. The auction is scheduled to start at 8 a.m. and run no later than 9 a.m. MST. It will be at 1700 Lincoln St., 21st Floor, in Denver. For more information, the ad asks bidders to contact Karen S. Kenney at 303-863-5339.
Next Testing (www.nexttesting.com) is a company based in Madison, Wis., that focuses on athletic performance and testing with an emphasis on team sports such as football and hockey. The information is intended to help recruiters do their job better with its independent standards of athlete performance. Its CEO is Chris Hornung -- previously the founder and CEO of Pacific Cycle, which he exited at the end of 2006. Pacific Cycle had a small home exercise equipment line called Powerlite, which is still mentioned on that website. According to management bios on the Next Testing website, Hornung is also an advisor and limited partner in Wind Point Partners, a private equity firm based in Chicago. He was not available for comment by deadline.
"We have had some light discussion with Chris (Hornung) about the possibility of working together," said Lamar, general manager of the Star Trac consumer division since late September, "but we haven't had a definitive discussion." He said there are a lot of questions that would need answering, including what Hornung's plans are.
In the newspaper ad, Wells Fargo explained that bidders may also attend by phone by calling 303-863-5339. "The winning bidder must sign a sale agreement agreeing to be bound on the same terms and conditions as provided by an existing sale agreement with Next Testing;…Wells Fargo in its sole judgment shall determine which qualified bid is the highest or otherwise best bid;…to bid, competing bidders must demonstrate sufficient evidence to Wells Fargo in its sole judgment of financial ability to close in cash only." If no qualified competing bid is made, Wells Fargo will award the assets to Next Testing.
SNEWS® Views: The possibilities led, of course, to many avenues of thought, but one is that Hornung sees the gap in bike shops' sales of fitness equipment -- a gap that he'd like to fill with lower-cost equipment. Bike shop owners can be skeptical of non-bike people and many fitness manufacturers haven't been able to make a truly successful segue to that market. With the current weakness in Schwinn Fitness -- a bike name that the shop owners have carried and seem to trust -- with its owner Nautilus in turmoil, Hornung may perceive an opening that he could fill if he acts quickly. We actually wouldn't be surprised in the end if Star Trac (and Lamar) ended up working together in some fashion.