Rocky Mountain Bikes Faces Financial Challenges: Bankruptcy Looms as Debt Mounts

The company behind mountain bike manufacturer Rocky Mountain Bikes announced Thursday that it has filed an application with the Superior Court of Quebec to obtain protection under the Companies’ Creditors Arrangement Act (CCAA).

The $141 million debt has reportedly strained the company’s cash flow to unsustainable levels. Industry analysts suggest that mismanagement, combined with challenges in the post-pandemic economic landscape, could be contributing factors. While Rocky Mountain Bikes enjoyed a surge in demand during the pandemic cycling boom, supply chain issues and inflationary pressures have made it increasingly difficult to sustain profitability.

The impact of Rocky Mountain’s financial crisis is being felt most acutely by its workforce. Layoffs have commenced at the company’s Vancouver office, signaling a grim outlook for employees and the local cycling community that has long rallied around the brand. It is unclear how many employees will be affected, but insiders suggest significant reductions in staff.

While no formal bankruptcy filing has been announced, sources close to the company believe it is imminent. If the company enters bankruptcy proceedings, it could lead to restructuring, sale of assets, or outright liquidation. This scenario would have wide-reaching implications for dealers, riders, and professional teams that rely on Rocky Mountain Bikes for their equipment.

Rocky Mountain was founded in 1981 by Sam Mak, Grayson Bain, and Jacob Heilbron while working at West Point Cycle in Vancouver. RMB quickly established itself as a core player in the growing mountain bike movement, and it has been dedicated to the sport's culture since its inception.