UPDATED: In debt for $32 million, Garneau files for creditor protection

66 employees have been 'temporarily' laid off

Canadian Cycling Magazine March 9, 2020

Update, March 9: Garneau owes $32 million to more than 500 creditors. Among them are other companies, distributors and pro racers. One of the biggest debts of the company is to RBC, who is owed $11.4 million. Louis Garneau’s wife’s company, Gestion Monique Arsenault, Inc., is owed $1.86 million. Garneau’s American subsidiary is owed $614,000. The company also owes three Chinese companies more than two $2,771,000, while the employees of Garneau are owed $671,368. Smaller amounts are owed to various distributors, and the company owes $2,000 to Canadian pro-cyclist-turned-gravel-pro Geoff Kabush. Le Journal de Québec reported that Quebec government officials are evaluating how to help the company recover.

Louis Garneau, the Quebecois sporting equipment manufacturer, is in $32-million worth of debt and has filed for creditor protection under the Bankruptcy and Insolvency Act. The company also announced the “temporary” layoffs of 66 employees at its offices in St-Augustin, Qc.

The sports goods manufacturer has been in business for 37 years, but is now looking for Quebec investors and a financial director to bail out the company.

36 months ago two of Garneau’s largest European clients declared bankruptcy. The company had been struggling to recover from the blow, and closed its St-Augustin clothing factory last September, laying off 46 employees. They made the announcement that they would be filing for creditor protection on Tuesday.

Garneau told The Montreal Gazette that it believes the protection period will provide sufficient time to restructure its activities.

The founder Louis Garenau said his priority is “to keep the head office in Quebec and maintain as many jobs as possible.”

“I decided with my team to fight and to do everything to keep the business in St-Augustin,” he said. The financial restructuring, he added, will be accompanied by “strategic and operational changes to ensure the profitability of the company in the future.”

Louis Garneau is a Canadian Olympic cyclist who founded the Garneau brand. The 61 year old became a Knight of the National Order of Quebec in 1997 and was awarded the Order of Canada in 1999. He founded Louis Garneau in 1983 in his parent’s garage, and managed to grow the brand internationally.