Paul Stanforth said:
"Having suffered considerable costs in the move from manufacturing to importing, followed by difficult trading conditions in the important Christmas quarter, Saracen Cycles Ltd. took the steps to go into administration in Friday February 3rd. The decision was taken to safeguard jobs and stop further losses to the company."
Stanforth said Saracen Bikes Ltd. is the "new company going forward" and will continue the Saracen policy of "leading edge design, premier quality and value for money."
Daniel Ferguson, Saracen’s SE rep was made redundant last week but "managers and other key personnel" are "unchanged" said Stanforth.
"Negotiations are taking place with key suppliers to maintain continuity of supply and quality together with minimising their losses."
Saracen Bikes Ltd. will take on responsibility for all Saracen Cycles Ltd’s warranty issues.
The new company has purchased all the stock, goodwill and intellectual property rights of Saracen Cycles Ltd. Paul and Rick Stanforth are directors of the new company. They were the sole shareholders of Saracen Cycles Ltd. They are the main shareholders in the new company, alongside a third party investor from outside the bike trade.
The new Saracen is a "slimmer, tighter operation," said Paul Stanforth.
"Two years ago when we were still manufacturing we had 80 staff here, now there are 14 jobs here, including me and Rick. The switch from manufacturing to distribution brought with many costs such as redundancies and rent on buildings that were too big for our new needs."
Saracen Bikes Ltd. will be moved to new, smaller premises in the next few weeks.
Saracen Cycles Ltd. had been in investment discussions with Merida of Taiwan, one of the company’s main suppliers, for 12 months. However, no deal was done, said Stanforth, because "[Taiwan] stock exchange laws now prevent PLCs involved in takeovers writing off goodwill payments over a period of time. Goodwill now has to be written down on day one, impacting on share price."
The negotiations with Merida broke down early in the New Year.
Paul Stanforth said the new Saracen would not be dealing with Argos or other mass-market discounters. The relationship with Halfords would continue but Stanforth wants better ties with IBDs.
"We’re going to be supporting them and we’re hoping they’re going to support us."
Saracen Bikes Ltd. will soon be sending IBDs invitations to the Feb-March roadshows and an information pack explaining about the administration, sale of the company and future plans.