Stroller maker Maclaren has quietly filed for bankruptcy December 29—it was only noticed by blogger DaddyTypes in a post February 21. The New York Times and Wall Street Journal picked up the story last week.
Some quick thoughts after reading these reports:
• The company reported $20.4 million in sales in 2010—this inexplicably dropped to $34,251 in 2011.
• The company lists $15.9 million in liabilities—including $1.1 million to designer David Netto, who sold his Netto Collection to Maclaren in 2009. He recently resigned from the company, telling the New York Times: “I feel a sense of disbelief that I worked for people for three years who would treat me this way,” said Mr. Netto.
• Maclaren’s long-time chairman Bahman Kia is listed as Chairman in the bankruptcy filing, but tells the New York Times he is no longer associated with Maclaren and refused comment.
• This type of bankruptcy is liquidation, not reorganization. It is unusual, because the current owner of Maclaren (Farzad Rastegar) is liquidating one division of a global company—this rarely happens. Rastegar also owns the Hong Kong division of Maclarne (Maclaren HK), which is owed $13.1 million. Maclaren USA has $45,000 in assists.
Speculation in the media is that the lawsuits from Maclaren’s massive recall of finger-chomping strollers in 2009 were the company’s undoing. Chapter 7 bankruptcy lets a company discharge lawsuit judgements and any unsecured business debts (such as the money owed to Netto).
Oddly, the company’s Soho store is still up and running. And Maclaren USA has quietly been replaced by Maclaren North America as the name for Maclaren’s US operations. All of this is being done with little or no comment to the news media.
Maclaren ‘s behavior has been erratic since the 2009 recall—the company disappeared from industry trade shows and rarely spoke to the press. In recent years, the company hasn’t introduced many new stroller models. And the company’s biggest stroller out in recent years (a over-sized SUV-like model) was a big flop. Yes, retailers in the East Coast (Maclaren’s stronghold) have been reporting to us that Maclaren’s sales have dropped in recent years . . . but many upper-end stroller makers have seen declining sales since the recession, so this didn’t seem out of line.
So what is the future for Maclaren? Stay tuned.
Do not buy anything from Maclaren. They don’t stand behind their products and they don’t care about their customers. They’ve proven it time and again. Buy any other brand but not this one.