Will Wilderness Experience ever get out of the woods?
It won't be easy. Last week, the troubled Chatsworth-based maker of camping gear and clothing disclosed that Los Angeles-based Union Bank is suing in Los Angeles Superior Court to get its hands on Wilderness Experience's accounts receivable, inventory, equipment, furniture and fixtures.
Those items secure $1.7 million in bank debt. And if it is not refinanced, Wilderness Experience said, the company may seek protection from creditors in U.S. Bankruptcy Court.
Earlier this year, Price Waterhouse, the company's accountant issued a letter saying that the company "may be unable to continue in existence."
Still, Bernard Kramer, Wilderness Experience's president and chief executive, said he's optimistic that negotiations with a private investment group for an infusion of money will succeed. He said he expects to have an agreement negotiated this week.
"We are still a well-known name with the dealers and with the consumers. If we can get past this hurdle, we can turn the entire company around," Kramer said.
The disclosures are the latest in a long list of problems affecting the company, which specializes in selling to retailers camping clothing, ski wear, sportswear and backpacks.
In 1985, former president Gregory Thomsen survived a proxy fight launched against him by his older brother, Jim, with whom he built the company during the 1970s. Gregory Thomsen resigned as chief executive last November and quit his post as director in March. Kramer, who once headed the company's sales and marketing, took over as company president.
Effective control of the company now rests with MarBen, a Los Angeles investment group, which owns 31.6% of Wilderness' stock.
In the last two years, the company has struggled through a huge plunge in sales brought on by lack of money to buy products from its vendors and also by price markdowns.
The company makes about 80% of its products, with the remainder from contractors in the United States and overseas. Wilderness Experience sells primarily to retailers, although it has a factory outlet store in Draper, Utah, and has made day packs and luggage for the L. L. Bean mail-order company.
About 15 firms make similar equipment and clothing, and in a Securities and Exchange Commission filing, Wilderness Experience noted that another 45 firms are potential competitors because they also make similar goods.
In the fiscal year ended last Oct. 31, Wilderness' sales fell 45% to $3.8 million and the company lost $1.1 million. In the past five fiscal years, the company has lost a total of $2.4 million and has reported only two profitable fiscal years.
Shareholders' equity fell from a high of $1.93 million in the year ended Oct. 31, 1984, to $138,900 as of Jan. 31. The stock trades at less than 20 cents a share now, down from more than $1 in 1985.
The company's financial problems are so severe that last winter it was unable to import most of its ski wear made overseas because it lacked funds, according to documents filed in March with the SEC.
As a result, sales fell 47% to $608,800 in the first quarter ended Jan. 31. The company lost $183,500, or 3 cents a share, compared to a loss of $163,800, or 2 cents a share, a year earlier.
In SEC filings, the company said Union Bank requested $500,000 by Jan. 31, but that it was only able to pay $250,000.
Kramer said that Union Bank has agreed to withdraw the lawsuit if an acceptable agreement is reached.