Wednesday, March 25, 2009

A good boardshop filling for bankruptcy

When I used to live San Diego, I went couple of times at Active and I found guys who were very helpful, had the passion for the sport and I had a great experience there. However Board Sports companies are in the same wagon than other industries so I learn today that Active is filling for bankruptcy.

We can't deny the fact that economy is down, that it is on a large scale that affect a lot of companies. However with that said there are opportunities everywhere and at any given year, I have never heard of a business saying: "it is such a great year, consumers spend thousands, there is no competition and it's a perfect world".

Down time just accelerate and show the true profile of companies and in that case bad management. The filling says: "these losses have been caused primarily by the Debtor's rapid over-expansion and market saturation, during which time the company's same store sales were decreasing substantially"

For sure they could have pull it off a bit longer if there was no recession but a company has to grow in revenue, otherwise an expansion is useless.

I would not be surprised to see quite a few companies filling for bankruptcy such as Spy that has never had a positive balance sheet in its creation in 1994.

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