Freebird, the 16-year-old Denver-based bootseller that grew to 20 stores before being brought to its knees by a severe liquidity crisis and taken over by a court-appointed caretaker who closed nearly all of its locations, has been sold.
On Thursday, Judge Jill Dorancy signed off on the $500,000 sale to Yasser Elshair of Arizona’s Elshair Cos., a private equity firm. Last year, Elshair bought The Pro’s Closet, a local retailer of pre-owned bicycles, “out of left field” as it was winding down operations.
Elshair was the lowest bidder for Freebird and the company initially opposed his purchase. Last month, Freebird asked Dorancy to instead let AOL Sourcing Group in Philadelphia buy it. AOL was willing to pay $1 million, plus $3.3 million for inventory, and close sooner.
“Because the receiver appears to be losing money through its continued operations, a closing of any sale as soon as possible is paramount,” Freebird wrote to the judge July 10.
Ampleo, a Utah-based restructuring company that has been running Freebird since being appointed in May at the request of a lender, accused Freebird of “letting perfect be the enemy of good.” It said there was no time “for an extended process of reviewing and revising bids.”
“The value of (Freebird) diminishes with each passing day, each departing employee, each location closed, each press article questioning the company’s future,” Ampleo wrote.
But just before an Aug. 5 hearing, Freebird dropped its objection, making way for the sale.
Elshair did not answer interview requests but told BusinessDen last month his plan “includes reopening select Freebird retail locations nationwide, including in the Denver area.”
Freebird once had four stores here: a flagship in Cherry Creek and others in Boulder, Lone Tree and Castle Rock. The first three closed in June and Castle Rock closed in July. Only Freebird’s two best-performing stores, in Nashville, Tennessee, and Charleston, South Carolina, remain open today.
“The receiver has worked to reduce the employee headcount and payroll costs to match the needs of the company during this liquidation period,” Ampleo wrote in its July receiver report. “The headcount from the most recent payroll is 36 full-time-equivalent employees.”
Ampleo says that in mid-June a buyer offered to buy Freebird’s then 13 stores and its e-commerce business but Ampleo “determined the potential offer was not better than the liquidation strategy that was in motion.” So, it declined and closed 10 more stores.
Freebird’s debts are massive. It owes $15.4 million to KeyBank, which requested the appointment of Ampleo as receiver, and $6 million to a manufacturer in Mexico that supplied 85% of its shoes. That bootmaker has gone out of business as a result.
“With no new inventory product available or being produced, the receiver is in the process of selling the remaining inventory at a discount,” according to Ampleo, which is advertising a 60% off sale. “Sales forecasts are running behind the receiver’s initial plan and new discounts are implemented weekly to … stay on schedule for a total liquidation by Aug. 31.”
Meanwhile, the company has a new lawsuit to contend with. On Aug. 7, it was sued in Denver by Vaqueras, a second boot manufacturer in Mexico, which claims Freebird has not paid a $250,000 invoice from November 2023.
Read more at our partner, BusinessDen.