Dye in trouble ???

[Eck011]

Apologies lads i dont post much on the forums but given the news about GI and hedge fund investor taking over and some of the comment made on PB Nation on the matter, might be me adding 2 and 2 and coming up with 5 whilst reading between the lines but you cant help but think might be something in the offing for GI moving in to help Dye out.

Sorry Robbo for posting link to the thread on another forum, (at least its not UKS ..lol)

http://www.pbnation.com/showthread.php?t=4612729

Comments on it

GI Sportz has a new investor and some big plans for the next three years. To accomplish those goals, GI Sportz needed money from outside of paintball. Richmond Italia, the owner of GI, recently took on new, young investors that actually understand paintball and believe there is lots of room for growth in the industry and participation in the game itself. Richmond will remain the CEO of GI Sportz and remains the single largest shareholder. He personally confirmed today there will be no change in operations or personnel at Tippmann or GI Sportz. The only difference will be that they now have the funds to go forward with some of Richmond’s bigger plans

The new investors are called Fulcrum and are an offshoot of HSBC if you want to look them up.

The best part of the whole conversation is that Richmond sounded genuinely excited not just about GI Sportz, but about paintball’s future. He acknowledged we have some obstacles, but he wasn’t just excited about GI, he thinks their plans will make paintball business owners excited about their own businesses too.

Richmond Italia has been a paintball player since the mid 80’s and used to play professionally with such legendary professional teams as Image and Avalanche in the 90’s. His son Tanis now plays on the newly reformed Team Imagein the Millennium Series.

 

[Spikerz]

The lawsuit docs of Wells Fargo v DYE were released by someone with knowledge of the case.

Short version is, DYE owe roughly 7.5 million to the bank with Dave and his wife as personal guarantees of that debt.

I really hope they can get the money. It would be pretty horrible if DYE were to go bankrupt and cease operations.
http://thefordreport.com/dye-in-trouble/

That link has the docs linked from it, if anyone wants to read all 400 pages of the filling.

 

[onasilverbike]

@Robbo Pete, if you want to skip straight to the documents http://courtindex.sdcourt.ca.gov/CISPublic/casedetail?casenum=201500003073&casesite=SD&applcode=C and https://drive.google.com/file/d/0B9f9uASwoBa0MC01UW9vbVJfcUZqck9ZLU9IWXpZVGVsaTAw/view

It would appear that from scan reading the documents The Dehanns have collectively put up the properties and assets of the whole of the Dye paintball empire, including Dye UK and Dye Germany as collateral to Wells Fargo who are seeking to recover summs in excess of $7,000,000 following default.

There is no mention of Dye Snow

P.S. Thanks for the clarification in your post, especially concerning the wedding present.

 

[Robbo]

Hi Pete, I've no reason to assume the bank documents aren't what they appear to be because to believe that someone would falsify such documents for whatever reason just doesn't float.

However, I've spoken to some people who are well placed to offer an opinion and none of them, bar one, were aware of the loan collateral infiltrating Dye US, Dye UK and Dye Germany and personal property portfolio - this is obviously more serious than a lot of us believed.
I did hear from one friend of mine that hinted 'things were a lot worse than people believed' but I'm not 100% sure if this was cynical speculation or he was just better informed than most of us.

One thing that tends to bob to the surface for me with all this is, Dave himself - he's not classically trained in terms of a business degree, he's self-taught which generally means he has a natural flare for business otherwise he wouldn't have gone from working from his garage up to owning a plus 65 million dollar enterprise .. that doesn't happen by itself.

My point is this, I just cannot see that Dave would secure loans on the back of his businesses and property unless he was confident in turning it around somehow.
I'm certainly not aware of the full scale of the bank's liens in terms of personal and business collateral but from the look of those forms, it looks as though it's the last throw of the dice, and it's in a game that very few of us, were aware of the sheer scale of what was being chanced.
It's a sad day for paintball if it all goes bandy ...
Either Dave's indulging himself in a huge risk [I can't believe this is the case] or he's supremely confident he can recover from it ....and if it's the latter, then he could either be monumentally mistaken ....... or proved right.
Dave ain't no loser and he certainly ain't nobody's fool but sometimes in life, this ain't enough, I just hope this isn't the case.
Normally speaking, when companies such as Dye [in terms of turnover] are forced to confront an acute reduction in turnover then downscaling is always gonna be on the menu.
I think that when the UK hub at Croydon was closed with operations shifting to Germany, this was the first tangible sign but there were no alarm-bells ringing anywhere that I was aware of.

This problem, if indeed it is of the scale these bank forms suggest, then it isn't just Dye's problem, it's our industry's problem.
And this is because of the specific place that Dye inhabited in terms of its customer demographic.
Dye set out to capture the always lucrative high-end market that focussed on quality gear, available at a premium.
This strategy always worked well, just as it does in every market-place.

And so, if there are problems in this section of the market-place then it suggests the problem is more widespread than first thought.
After all, if the people who have that 'extra' money to buy the high-end gear are facing difficulties [as the downturn in turnover for Dye suggests] then that huge belly of players/customers underneath the high-end must also be facing problems.


And this is because it suggests that the demographic who wield that extra money to secure the higher-end products, then it's reasonable to assume that if their disposable income has been reduced to the point where they cannot buy Dye's gear then it follows there's a more fundamental problem residing underneath.

 

[Spikerz]

It would mean the loss of a pillar of the paintball world. Whatever people think of the products or the teams, or the people. It'd be a monumental loss to get be sport and industry.

DM15's are going for 50% of what they were two weeks ago. That's good for some and shows the depth of trying to recover funds.

Really hope they can pull out of this. Maybe they can chat with the fulcrum guys, or another outside investor.

 

[Robbo]

Spike - Smart Parts were shafted by their banks when in a similar position when they foreclosed on Billy and Adam even though their repayments of the initial loan borrowed had never faltered.
The banks are ruthless when it comes to minimising potential loss situations but at the same time, they ain't stupid, [they're just greedy fuhkers] and if it looks as though the rescue package has legs, they'll run with it, if they don't believe so, they go for the jugular with no pity, no delay and no warning.
Fingers crossed, not just for Dye but also for all of us in the industry.

 

[onasilverbike]

No, I agree with you Pete, Dave is no fool, from the very very brief dealings I've had with him (he is almost reclusive, most people wouldn't even know he was there if they were at an event he was at) I've learnt that.

He has undoubtedly been massively stretched with not only the Dye Empire, the branch out in to Snow goods and the Vans/ProTec deal, PSP and PBA which has to be an almighty golden egg in reverse!

As you say, banks are vicious, I hope Richmond realises this and doesn't get his ass bitten by his new investors down the line.

Over the last dozen or so years we have seen a huge shift in the player demographic, the guys who would think nothing of dropping a grand a season on a new shooter have been edged out of the game as younger and less affluent players have edged them out. These new guys are not as well heeled as the players of old and to raise that sort of money they either have to run to the bank of mum & dad or find a part time job, something that doesn't necessarily fit easily with their aspirations if they want to play/train week in week out.

As a reaction, pretty much all the major industry players have introduced second and even third lines at lower price points, think ETek/Etha, and probably the best example was the Ion, that was a cash cow for Smart Parts, though even that didn't save them.

The other issue is the secondhand market, when you buy almost any premium product you can expect the depreciation to be hideous, when last seasons shooter is selling for less than half the price of this years model and there is little more than cosmetic changes then the decision to buy new over used becomes harder.

In the early days Dye equipment was a byword for quality, as others have raised their game the difference has narrowed, Dye have held on to the mentality that they have a premium product and that they can sell it as a premium price, then on Friday I had the email from them announcing massive price drops on the DM range, in January FFS, that is not a good sign.

 

[Robbo]

I been on the phone to a few friends in the US for about 90 minutes and I don't like what I'm hearing ....

 

[H]

Doesn't Dye invest a great deal of money into the PSP? If they are in trouble then can the PSP survive?

 

[Robbo]

The PSP survives and functions on its own with no need for propping up whatsoever, ... there are three owners/shareholders, of which Dave is the majority shareholder but its assets are not providing security elsewhere.
The PSP has nothing to worry about for the moment.