Serotta, which started in Middle Grove several years ago, was sold and was merged with Blue Competition Cycles and Mad Fiber Wheels to become part of the Divine Cycling Group.
CEO Bill Watkins told BRAIN on Wednesday that at the time of the merger it was hoped the combined brands would be more attractive to investors, but that the merger actually did not bring in any more funding. In mid-July, after being told the funds would not be coming, eight employees were laid off.
Reports say that Serotta has closed its factory in Poway, California, and laid off all the employees there. Serotta’s remaining employees in Saratoga are working to complete orders.
“We still have a core group of craftsman still producing bikes, but we are not accepting orders. I’m anticipating a shutdown in two weeks. I do not know if that will be temporary or permanent while the owners figure out what to do,” he said. “I’m working to build out the runway and land this airplane gracefully and professionally.”
BRAIN reports that Watkins said: “[DCG] have not invested any capital that was required to consummate the merger, and to fuel the plans that each of the three companies had at time the merger was being discussed. Ben [Serotta] and I disclosed what we were doing, they bought into plan and said, ‘Go for it,’ and we did the plan, but the funds never came. We got official notification last week that the funds would not be coming.”
Prior to joining Serotta last fall, Watkins was a consultant with Bradway Capital, an investment group that bought an interest in Serotta in May 2012. Watkins said he did not have any equity in Serotta or DCG.