Charlottesville-based WorldStrides Files for Chapter 11
The spread of Covid-19 “decimated” the business, the company said
|Jul 21, 2020|
Back in March, Worldstides, the educational travel company headquartered in Charlottesville, began postponing trips. Today, according to Bloomberg news, "Educational travel company WorldStrides Holdings filed for Chapter 11 bankruptcy on Tuesday with plans to sell the company back to its current owners. The spread of Covid-19 “decimated” the business, the company said. Just three years ago, French private equity firm Eurazeo SE and China's Primavera Capital acquired the company through a 2017 leveraged buyout.
According to United Nations Conference on Global Tourism, the global travel industry could lose $1.2 trillion due to the due to the coronavirus pandemic.
In a press release put out today, Worldstrides put a more positive spin on things.
CHARLOTTESVILLE, Virginia – July 21, 2020 – Lakeland Tours, LLC, d/b/a WorldStrides (“WorldStrides”) today announced that it has agreed to a comprehensive recapitalization with its principal shareholders and certain lenders. This agreement is expected to reduce the company’s debt and provide access to significant new financing, which will support its business plan going forward, including navigating the COVID-19 pandemic.
Robert Gogel, President and Chief Executive Officer of WorldStrides, stated: “Our industry has been at a standstill due to the pandemic. We were on track to deliver record-level business activity across many of our brands, but COVID-19 has had a significant impact. Nevertheless, both our owners and our lenders continue to believe in the long-term opportunity for WorldStrides, and they are now reinvesting in our future. As a result, we will have significant new financing, reduced debt, and a stronger platform to continue serving our customers and growing our leadership position over the long term.”
"There will not be job losses related to our recapitalization," WorldStrides content and communications vice president Beth Campbell tells The DTM. "While we are hopeful travel resumes soon, any potential future changes to staffing will be related to the timing of when programs and travel will begin and not due to the recapitalization."
At the beginning of the year, things looked rosy for big companies in Charlottesville, and others considering a move here, and development projects like Dairy Central, 3Twenty3 and the CODE building have been going up to accommodate them. But what a difference a few months make. Back in January, Charlottesville Director of Economic Development Chris Engel told the Daily Progress that Charlottesville was "riding the wave of downtown revitalization that’s inundating cities across the country," and that Charlottesville was "in demand from tech companies, bio-tech companies and others that are looking for full-service amenities to offer their employees in an urban setting." Feels like years ago.