European Factory Shipping Despite Financial Difficulties
Grand Chavin, the French manufacturer of the Hot, Hammer, and A snowboard brands, has been under the French equivalent of Chapter 11 bankruptcy protection since July 8.
Its subsidiary, RR Development, based in Challes-Les-Eaux, France, develops and markets A Snowboards and is the distributor of Drake/Northwave. According to A Snowboards Founder Regis Roland, it’s likely it too will take a similar measure within the next two weeks.
This is the first time in 50 years of wintersports manufacturing the family owned company, based in Les Rousses, has needed to take such a step. But according to Roland, “For a company in Chapter 11, we are in remarkably good shape. Both companies are operating normally and we have started shipping boards internationally with all our Japanese orders shipped and most other countries underway.”
Roland insists that despite debts in excess of two-million dollars (primarily to banks, back taxes, and to some suppliers) Grand Chavin’s problems simply come down to cash flow.
“This is not a balance-sheet problem. Our orders are good “we would prefer they were great” but between our three brands we might ship 50,000 boards. That’s almost as many as before the problems started a couple of years ago. We retain 28-percent marketshare in France and have a growing European presence.”
Roland sold A Snowboards to Grand Chavin for a mixture of stock and cash two season ago when Hot and Hammer was manufacturing around 45,000 boards. However the market glut and admittedly disastrous mistakes in shipping and manufacturing led to sales plummeting to around half that amount.
“We’ve solved our basic management problems and now it’s down to financial restructuring,” says Roland. “We have six months to show the French government a new plan. Either we’ll be able to rearrange things internally or we will find outside investors and have several possibilities. It’s hard to predict, but there’s a good chance we’ll keep the factory in its current location and move administrative functions to Grenoble.
“Any new investor must not only have cash, but brains and experience as well,” concludes Roland.