Schweitzer Tries To Dig Out From A Mountain Of Debt
Schweitzer Mountain Resort’s two lackluster ski seasons, a shortage of cash and a mountain of debt have prompted a reorganization of top executives at Pack River Management.
Bobbie Huguenin will step out of her 10-year role as chief executive officer for Pack River and Schweitzer next week.
She will remain as chairman of the board for both family owned corporations, but said it’s time to bring in some “business expertise.”
“This is a big business and it takes a lot of money to be who we are. We need someone who is going to crack a meaner whip than I do,” Huguenin said. “We need a little more know-how and are trying to get into a new level of sophistication all the way around.”
By hiring a new CEO, Brad Mead, and financial officer, Gordon Zimmerman, Huguenin hopes to restructure some of the resort’s debt, pay off creditors and coax more developers and investors to the mountain.
The resort is not near bankruptcy or seeking a buyer, but Huguenin said a partnership is possible in the near future.
“We are being courted by some investors who are talking about a joint venture. It’s possible and we are looking at that option.”
Huguenin, 53, was frank about the resort’s financial shape, saying the corporation owes creditors money and has had a dismal cash flow the past two years. With roughly 500 employees during the ski season, Schweitzer is among Bonner County’s largest employers and also provides work for many local venders.
“We have been short of cash and I’m embarrassed and saddened by it. I’m aware of the problems this causes and the domino effect on other businesses,” she said. “That’s partly why I instigated this move. I think it is going to be good for the company, employees and the community.”
Mead owns an investment banking firm in Avon, Conn., which specializes in financial restructuring of corporations. He’s consulted with Pack River for more than year and will take over as CEO next month.
In an interview Thursday, Mead said Pack River’s assets, mainly land, far outweigh the resort’s debts. The idea now is to turn some of those assets into cash to carry out Pack River’s other business plans and development at the resort. Pack River is a holding company for family owned timber and real estate, as well as the ski hill.
“We want to put the resort back on track and realize the vision that has been put out in various plans over the years - to go from a regional to a destination resort,” Mead said.
Schweitzer launched a 10-year, multimillion-dollar expansion plan in 1990. The project put a new hotel, day lodge and high-speed quad chairlift on the mountain. It also attracted investors who bought land and built homes and condominiums at the resort.
But Schweitzer is still in debt from the initial expansion project.
Resort officials would not specify how much it set them back financially, but sources familiar with the project said the company borrowed roughly $20 million from U.S. Bank.
Mead is confident Pack River can lower some of that debt in the next few years.
“The bank has worked with us for five years and continues to work with us on this,” he said. “The ski industry is a tough business and when all the dust clears there are not going to be a whole lot of resorts standing. But Schweitzer will be standing and will be ahead of the pack.”
Huguenin will back out of handling day-to-day operations and concentrate on long-range planning, marketing and special projects. Pack River and Schweitzer will still be family controlled, she said.
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