The ride isn’t over for The Pro’s Closet.
The Louisville-based used bike retailer shuttered last month, despite having raised nearly $100 million from investors. But a private equity firm that bought the company’s intellectual property has rebooted it with the help of former employees.
“We were helping them wind down,” said Justin England, the chief revenue officer of what he calls TPC 2.0. “But out of left field Yasser bought the (intellectual property) and asked us if we wanted to run this thing.”
That Yasser is Yasser Elshair, the owner of the Arizona-based Elshair Companies. The private equity firm bought The Pro’s Closet’s website, email lists, software and other digital assets. Elshair has a portfolio of several e-commerce sites, but this is his first journey into the bike industry, England said.
Yasser made the buy at the same time The Pro’s Closet auctioned off all its physical assets, including inventory and warehouse equipment.
Shortly after the purchase, Elshair approached England and JP Gage, now TPC’s chief operating officer, to lead the rebooted company.
The Pro’s Closet was founded in Boulder 18 years ago and over time sought to take used bike sales — traditionally a local market facilitated by bike shops and sites such as Craigslist — and go national. It bought high-end bikes directly from owners and refurbished them before reselling them.
Jonathan Czaja, the company’s final CEO, compared the arrangement to the “certified pre-owned” used- car market.
England said he worked for TPC for 15 years, managing the business-to-business sales team. Gage was there for 12, overseeing the refurbishment process and customer experience.
“It hurt when it was going out of business,” England said. “We just have a lot of personal equity in TPC and saw this as a great opportunity to go back to market.”
The first priority for the restarted firm: Get something to sell. Elshair’s purchase didn’t come with any inventory, so the company needs to buy bikes.
Since relaunching TPC’s website a week ago, England said it’s seen about 300 sell or trade submissions a day, a number on par with the company’s summer intake that makes him think the business is still perceived positively. At that rate, he expects inventory to be at summer numbers in three to four months.
“That’s been a bright spot, just the volume,” England said.
Before the pandemic, venture capital money rolled into TPC. Former CEO Jonathan Czaja told BusinessDen in January the company had raised more than $90 million from investors.
England and Gage said this money changed the company’s outlook and led to its demise. Leadership put an emphasis on things such as adding new products and apparel instead of controlled growth, they said.
“VC is so focused on that top line, like how much can you grow?” Gage said. “We’ll be focused on that bottom line this time.
“We’re trying to target the TPC of five to six years ago and hit that reset button.”
TPC previously operated from a 135,000-square-foot facility in Louisville, which included a 5,000-square-foot showroom where local customers could pick up bikes or take a test ride. Gage said the company is targeting 30,000 square feet for a new warehouse and dropoff/pickup location and is checking out spots this week.
The company will be based from the greater Denver area because that’s where much of its customer base has been, he said.
England and Gage have hired “a few” workers so far, all of whom worked at the original TPC. They expect to be around 30 employees when the build-up is done. Two-thirds of those will be in refurbishment operations, and the other third will be support staff, Gage said.
“We’ll be coming back a bit leaner as a company,” he said. “We’re targeting this initial rebuild with profitability and organic growth.”
Despite a bike bust in the years after the pandemic, both are optimistic about the industry’s future. They mentioned steady inventory rates and rising resale values, which bottomed-out in the spring, as positive signs.
That, combined with the TPC’s reputation, has England and Gage excited to be on to stage two.
“One of the advantages is that customers know us and trust us,” England said. “Sellers know that they are getting a guaranteed dollar amount, and consumers know they can buy with confidence.”
This story originally published on businessden.com.
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