Coeur d'Alene-based Seven Oaks Motor Sports, through which Greg and Beth Ernst own and operate the two-year-old Lone Wolf Harley-Davidson dealership there, has agreed to buy the assets of Shumate Harley-Davidson in Spokane Valley and Lewiston, and hopes to reopen those shuttered stores.
Seven Oaks would pay about $3.17 million for those assets, plus assume about $2 million in debt, if its offer holds up through a still-pending bankruptcy auction process aimed at attracting the highest possible bid, Greg Ernst says. The assets include new and used motorcycles at the stores, parts, accessories, clothing, collectibles, and furnishings, but not the buildings, which are leased.
"I'm excited as can be," Ernst says. "It's kind of tough, because you don't know what's going to happen, but I'm excited."
If the transaction is approved, Lone Wolf would keep open its 21,000-square-foot Coeur d'Alene store, at 722 W. Appleway, where it has about 30 full-time employees, he says.
"We'd be adding a lot of people" to staff the stores here and in Lewiston, he says, adding, "My guess is we'd have more than we have here. Obviously, the intent would be to bring the experienced crew (that formerly had worked at those stores) in right away."
It wasn't clear last week exactly when the bankruptcy auction would be held, but Ernst says the prime motorcycle selling season began in February, so he's eager to finalize the deal and reopen the stores as soon as possible.
Seven Oaks' emergence as a prospective buyer for the Shumate dealerships' assets represents a surprising twist from early bankruptcy documents that indicated Arizona-based Ride Now Properties LLC, which is affiliated with an Arizona-based motorcycle dealership chain, had made an offer to buy the assets. Ernst says Ride Now apparently decided during the due-diligence, or pre-purchase asset evaluation, phase to withdraw its offer.
The Shumate dealership here had occupied a 27,000-square-foot building at 6815 E. Trent that former local Harley-Davidson dealer George Latus owns, and the Lewiston store was located in a building at 2408 North-South Highway there that Latus' ex-wife owns. Both dealerships have been closed for a number of months. John Michial Shumate and his wife, Jennifer, also owned a Tri-Cities motorcycle dealership that closed, but Ernst says that dealership reportedly also has a prospective buyer.
The Shumates already owned the Tri-Cities dealership six years ago when they bought the Spokane Valley dealership. Hit hard by declining revenues due to the recession, they and their companies filed for reorganization in U.S. Bankruptcy Court here last September, listing total debts of more than $10 million and a similar amount of assets. In court documents filed the following month, the couple alleged that Harley-Davidson Motor Co. and two affiliates committed unlawful acts that accelerated the financial deterioration of their business enterprises.
Ernst says he and his wife aren't intimidated by the prospect of operating a business enterprise that has several locations. Before moving here, he says, they operated a floor-covering business in the St. Louis area that they grew to nine outlets before it was acquired by a large global floor-covering cooperative.
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