Parts ID Inc. filed for Chapter 11 bankruptcy on Dec. 26, moving forward with plans to restructure and reduce debt.
The ecommerce retailer sells automotive parts through CarID.com, TruckID.com and CamperID.com. Parts ID is No. 479 in Top 1000. The Digital Commerce 360 database ranks North America’s leading online retailers by their web sales.
Parts ID went public in 2020 through a special purpose acquisitions company (SPAC), Legacy Acquisition Corp.
Why did Parts ID file for bankruptcy?
Parts ID’s bankruptcy is due in part to challenging elements in the economy, according to the retailer’s filing with the U.S. Bankruptcy Court.
“Recent economic conditions have caused fluctuations in business and consumer confidence, which has impacted spending on automotive parts and accessories,” CEO Lev Peker said in the filing. “These economic conditions include supply chain challenges, an inflationary environment, overall economic uncertainty and the potential for economic slowdown or recession, which have impacted consumer confidence and spending.”
As of the filing, Parts ID lists $55 million in debts and $18.7 million in assets.
Will Parts ID shut down?
The Cranbury, N.J.-based auto parts retailer plans to continue operating normally with the bankruptcy in motion, the filing states. In the meantime, Parts ID will negotiate a repayment plan for its debt. The ecommerce company outlined a restructuring plan for the debt in the filing, which it says has support from vendors and lenders who hold the debt.
Investment firm Fifth Star committed to financing for Parts ID through the bankruptcy, the filing shows. Fifth Star will provide up to $32 million for payments to vendors and creditors. The firm is also a likely top bidder in a future sale process, The Wall Street Journal reported.
“After years of financial challenges due to the global impact of COVID-19 and an uncertain economy, the Plan Restructuring will position the recapitalized Debtors to execute on its strategic initiatives and deliver on the promise of its proprietary digital commerce platform while prioritizing the Debtors’ commitment to Vendors, the filing says of the proposed plan.
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