Last December, I published an email that Big Dog Motorcycles owner and CEO Sheldon Coleman sent me. In it. he announced that he was looking for additional capital, or equity investment, or merger or outright sale. For this purpose he hired the firm Of William Blair & Company. So, what happened during these last 5 months?
As I reported, Big Dog Motorcycle Co. has drastically reduced its workforce, halted production several times (and is building bikes only if orders are received), tried to push its exports with some success in Canada with 4 dealers and conceived a moderately priced chopper at $20,000 still to be officially launched (and not featured in their website.)
In an interview last week with the Wichita Eagle newspaper, Sheldon Coleman stated that after discussions with possible investors “it appears the most likely outcome is the sale of a minority stake or stakes in the company”. It can be translated as no buyer in these market conditions will buy a motorcycle manufacturer, except at a big loss for the seller. Big Dog Motorcycle needs recapitalization and cannot continue production, inventory build up and marketing without a very large new funding to finance cash flow. And of course, investors will wait on the sideline until they see consumers returning to the showrooms and placing orders.
Last hope for Big Dog Motorcycles Co. if no investor is found and US buyers continue to be afraid to spend money, is a foreign expansion. The company has already some introduction in South America & the Middle East and a very discreet presence in Europe. A depreciated US dollar against the Euro is favorable to exportation to the Old Continent. But it takes time and it is anticipated that the US dollar will continue to climb back against the Euro. Many things will have to be right at the same time for Big Dog to survive. Is it already too late?