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10 takeaways from the demise of NobleRush
The recent closure of the NobleRush chain of stores torpedoed the Pacific Northwest motorcycling community with a magnitude unmatched by any previous motorsports event in the region. The fortunes of one Microsoft executive made a seven-year appearance in the community only to depart in one of the worst ways possible. Let's look at how we got here, what to be wary of in the future, and how we move forward.
Photo: Howard Crow operated the NobleRush collection of motorsports stores from August 2012 until its bankruptcy on September 19, 2019
First off we ask the question, how did one guy buy a dealership (Ducati Seattle), watch its sales drop off; buy the competitor (Ducati Redmond) only to see that shop dwindle as well, then latch onto a major European shop in Seattle (Ride West BMW), lose customer confidence there and still be able to yet again buy a major motorcycle retail store in Auburn (Hinshaw's Motorcycle Store, Indian of Auburn) and see its reputation also fade?
For starters, it probably wasn't right for Ducati to place all its Seattle metro eggs in one basket. In fact, some OEM's have a rule that no one can own two of its shops that are geographically side-by-side. Yet Ducati allowed it and was willing to allow that same owner to purchase the franchise in South Sound as well. Fortunately, the latter didn't happen, which is lucky for Ducati owners seeking a certified tech to work on their bike. Had South Sound Motorcycles gone down in the fall, Ducati owners only choice for OEM service would be Spokane or Portland. Have a nice ride…
The motorcycle industry is a very dynamic business and requires a little TLC from the top down to keep employees and their customers happy. Nearly every shop purchase we've seen in the PNW in the last two decades by a well-financed individual who was an absentee owner has either failed or been sold. Lesson learned - if you want to keep your full-time job at the tech company that provided all your wealth, then keep it, just don't try to build a motorsports empire on a bean-counting-style of management and not tend to it daily. Doesn't work.
Who is the banker that followed the unsuccessful pattern of missing sales goals and lack of profitability after three years and continued to loan money? That banker, or group of bankers/investors were wrong in letting this situation continue to snowball.
Our understanding is a bankruptcy was filed, although as of this writing it does not appear in the King County database of bankruptcy filings. In bankruptcy, there are two types of filings. Chapter 7 is where you throw your arms up, cry uncle and shut it all down. In a Chapter 13 filing, you're given a period of time to reorganize, setting a goal to rise up out of the ashes. This particular situation was clearly a Chapter 7 filing and no previous Chapter 13 is on record which means the owner simply got in too deep to believe he could fix the mess and come out the other side. That's just bad planning, but when you're busy at your software day job, who's got time to pay close attention?
This took a toll on a number of people. Here's a few of the ways it affected people across the community:
1) Lost Jobs - about 100 people lost their jobs. We're glad to see some of them already finding work at surrounding dealers, but for others it may be a while before they work again.
2) Locked Up Property - Some customers had paid cash for new bikes that had yet to be delivered. Some customers had bikes in these shops for service. Others had bikes in showrooms on consignment as used inventory. It took several days for employees to get access to the shops, at no pay, to begin calling customers to arrange pick-up of their property. A week out there were still a lot of loose ends. In the case of bikes in for service, parts were gathered up and provided back to the customer with the half-repaired unit. Call in a tow truck and then what?
3) Unused Gift Cards - Anyone holding a gift card for one of the five locations is basically S.O.L. You could take it as a loss on your taxes which will get you a small write-off not near the value of the card. One customer was holding a $500 gift card.
4) Extended Warranty - Dealers love to sell customers an extended warranty. Often times, if these are not direct from the manufacturer, then they are dealer specific and can't be used elsewhere. Again, these customers are S.O.L.
5) Where to now? - Thousands of customers/riders were affected by the closures. Many asking, "now where do I take my bike?" Each OEM has a listing of dealers on their website, and we took the time to update our dealer directory on Sound RIDER! as well.
6) The land owners - All the shops were on leased property. By the time the bank gets itself paid back, will there be any money left to cover unpaid rent?
7) Former owners - Several of the former owners had extended private loans on the purchase of their businesses. Will they ever see the money owed to them. That's unlikely.
Within the social media post we published, nearly every independent tech was posting their services. Customers need to be leery about using a non-certified tech by the OEM for several reasons. Many bikes sold over the last two decades, in particular European models, require special training and, just as importantly, special tools to do the job correctly. One thing a rider can do is purchase the shop manual and refer to it before service. That way they'd know the ins and out of the upcoming service to be done and what special tools may be required. Then, by all means, query the tech and see if they actually have those tools and diagnostic devices on hand. Valve adjustments ain't what they used to be.
Poor communication prevailed throughout the 7-year legacy of NobleRush, but it really showed itself when the stores were closed. Employees were simply told to go home. No mention about getting final paychecks and commissions owed to them. For customers looking for answers on the company's websites and social media pages, forget it, nothing was ever posted. We think that's simply an irresponsible way to drop a bomb showing no integrity. But if you didn't care about employees and customers, you could not have done a much better job.
Profit is important. Did you get the best deal ever on your last bike? Is that dealer still around today? Dealers do need to be profitable to stay in business. If they're giving the lowest price every day on the showroom floor thinking they'll make it up later in service, just look at what happened here. Didn't work out that way. Consider paying full price for your next helmet, jacket, boots or bike. If you don't, how far will you have to ride for your next service?
Something that disappeared when Ride West BMW was purchased was its flair for inspiration. That shop, more than any other shop in the PNW, inspired riders to go further. It helped connect the dots for those seeking information to make their transcontinental dreams come true. Again, this is one of those dynamic aspects that sets a great dealership apart from the rest. And it translates into more miles ridden, more service needed, more tires bought, and ultimately the next bike purchase.
Sadly, Howard Crow seemed to be in search of specific metrics that pointed to a sale. It doesn't work that way, there's a lot more that makes a sale happen than a post on social media, an email showing used inventory over and over again, or simply standing at the door waiting for someone to pull out their wallet.
When all the bean counters do is count beans, it's over.
SR!/October 2019
