Big Dog Motorcycles owner Sheldon Coleman, bowing to the troubles hounding his company, said Tuesday that he is looking to sell all or part of the company.
Coleman has hired investment bank William Blair & Co. to evaluate options, including merger with another company, issuing more stock to a new investor and a sale of the company or its assets.
The company has lost money the past two years, Coleman said. Once debt-free, the company has borrowed heavily in the past two years to continue operating.
It no longer has the capital to fund growth, he said.
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"It is important that the company have a fresh infusion of capital to really be able to participate in a rebounding economy," Coleman said.
The market has slowed so severely that Big Dog hasn't produced a new bike in two weeks, said John Brock, vice president for operations.
There are now just 30 to 40 people working at the company — about 10 percent of its 2005 work force.
Almost all production staff has been furloughed, Brock said. The company is selling down the inventory in its warehouse and would call in some workers from furlough only to make new ones if it got an order that couldn't be filled from the warehouse.
Brock said he expects demand to pick up in February and March.
The company has seen demand fall drastically since 2005 because of the economic forces that have roiled the country over the past four years.
It's the tightening of credit for many buyers. Banks are no longer interested in lending on high-style motorcycles that cost between $24,000 and $36,000.
But it's also the disappearance of vast amounts of paper wealth as housing values have plunged. In the new age of tighter credit, job worries and overall change in the culture from excess to frugality, all brands of motorcycles have suffered.
"Every time we would cut we would think we had adjusted to the market, and every time it would get worse," Coleman said. "By a wide margin, this is the worst economic situation I've ever seen."
Coleman, once president of the family business, the Coleman Co., started Big Dog as a hobby in his garage in 1995. The company enjoyed a rapid rise in the first half of this decade, hitting sales of $120 million in 2004.
Big Dog's growth was so strong that in 2005 Coleman bought 106 acres on the far east side of Wichita because he thought the company would soon outgrow its downtown location.
But in spite of the collapse of the market, Coleman appears to still be interested in the long term.
He said he would like to be part of the company as the economy and sales revive, depending on the financial agreements reached with new investors.
Brock said the fact that the company has kept its research and development staff shows its priorities.
"We continue to invest in research and development and have staff working on certification to sell in Europe," he said. "So we're continuing to invest."