Pure conjecture, but the panic discounts that Specialized started this spring do not give me any confidence that they're doing OK. Maybe they were just smart/cutthroat...
Pure conjecture, but the panic discounts that Specialized started this spring do not give me any confidence that they're doing OK. Maybe they were just smart/cutthroat and got ahead of the crash, but it sure did a number on the entire market when they went off price so early in the season.
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add their 2024 bikes on it.
Trek had a very weak sale this summer that ended and now they're back with deeper discounts for fall. When I saw the first sale discount amounts I said to myself that they were very confident and it looks like it didn't worked out. They have a crazy amount of Slash gen 5 to sell.
Giant are on sale since a few months and the sale is still going on...they're fully stocked.
Specialized started discounting this fall here in Canada and it looks like they have plenty of bikes to sell.
Inventory seems to remain too high even with all of the sales going on and I'm pretty sure discounts are going to get deeper this off season.
Winter is going to be tough and these discounts are going to roll into 2024 for sure, but it's hard to pinpoint a specific company that could go under the bus. Maybe Kona & Norco are going to struggle a little bit more, but not sure how bad it could be.
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add...
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add their 2024 bikes on it.
Trek had a very weak sale this summer that ended and now they're back with deeper discounts for fall. When I saw the first sale discount amounts I said to myself that they were very confident and it looks like it didn't worked out. They have a crazy amount of Slash gen 5 to sell.
Giant are on sale since a few months and the sale is still going on...they're fully stocked.
Specialized started discounting this fall here in Canada and it looks like they have plenty of bikes to sell.
Inventory seems to remain too high even with all of the sales going on and I'm pretty sure discounts are going to get deeper this off season.
Winter is going to be tough and these discounts are going to roll into 2024 for sure, but it's hard to pinpoint a specific company that could go under the bus. Maybe Kona & Norco are going to struggle a little bit more, but not sure how bad it could be.
I've had Kona on my watch list. The abrupt pivot away from IBD's to D2C signaled, to me, that they felt they needed the revenue fast. Problem is their pricing still follows IBD levels.
The other 'big' brand that I've been concerned about is Marin. Anytime someone does a BOGO you have to wonder.
I think the other big players have enough resources and a big enough market share to ride out the next 18-24 months. It won't be pretty (layoffs, reduced product selection, etc) but they'll still be around when things get back to normal.
The smaller operations should be okay provided they managed to avoid getting in an inventory trap (correctly forecasting a soft-landing or not having had the resources to get themselves into an inventory glut) - they've always been niche and their brands (should) have enough value to still be desirable when other brands panic discount.
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add...
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add their 2024 bikes on it.
Trek had a very weak sale this summer that ended and now they're back with deeper discounts for fall. When I saw the first sale discount amounts I said to myself that they were very confident and it looks like it didn't worked out. They have a crazy amount of Slash gen 5 to sell.
Giant are on sale since a few months and the sale is still going on...they're fully stocked.
Specialized started discounting this fall here in Canada and it looks like they have plenty of bikes to sell.
Inventory seems to remain too high even with all of the sales going on and I'm pretty sure discounts are going to get deeper this off season.
Winter is going to be tough and these discounts are going to roll into 2024 for sure, but it's hard to pinpoint a specific company that could go under the bus. Maybe Kona & Norco are going to struggle a little bit more, but not sure how bad it could be.
I've had Kona on my watch list. The abrupt pivot away from IBD's to D2C signaled, to me, that they felt they needed the revenue fast...
I've had Kona on my watch list. The abrupt pivot away from IBD's to D2C signaled, to me, that they felt they needed the revenue fast. Problem is their pricing still follows IBD levels.
The other 'big' brand that I've been concerned about is Marin. Anytime someone does a BOGO you have to wonder.
I think the other big players have enough resources and a big enough market share to ride out the next 18-24 months. It won't be pretty (layoffs, reduced product selection, etc) but they'll still be around when things get back to normal.
The smaller operations should be okay provided they managed to avoid getting in an inventory trap (correctly forecasting a soft-landing or not having had the resources to get themselves into an inventory glut) - they've always been niche and their brands (should) have enough value to still be desirable when other brands panic discount.
Kona is a zombie brand right now. Their 'pivot' happened without any warning to their dealers, and they also laid off a lot of people at the same time. And prior to that, new models they'd been promising for at least a year were abruptly cancelled. The whole thing reeks of desperation. Not entirely sure who's really steering the ship at this point. Part of me would like to see the brand bounce back (not least because I still own one of their bikes, and enjoy it a lot) but I also would not be surprised if they close up shop completely in the near future.
They left independent retailers out in the cold and undercut them on pricing on existing inventory, fired their team members, and as for consumers... well, you can be the judge.
The impact on IBDs will be interesting (and sad) to see. Major brands are in survival mode and are royally screwing their loyal dealers in ways they haven't been screwed before.
The impact on IBDs will be interesting (and sad) to see. Major brands are in survival mode and are royally screwing their loyal dealers in ways...
The impact on IBDs will be interesting (and sad) to see. Major brands are in survival mode and are royally screwing their loyal dealers in ways they haven't been screwed before.
Major brands seem to be adapting to stay afloat and deal with this volatile world we are currently seeing. Hopefully bike shops will be making positive changes to maintain their business and ensure their longevity.
Major brands seem to be adapting to stay afloat and deal with this volatile world we are currently seeing. Hopefully bike shops will be making positive...
Major brands seem to be adapting to stay afloat and deal with this volatile world we are currently seeing. Hopefully bike shops will be making positive changes to maintain their business and ensure their longevity.
That was an excellent article. Shops can be their own worst enemy, and crap customer service [ESPECIALLY towards women] is enemy #1. Regardless of the unpleasantness inflicted upon the IBDs by the big brands, if a shop doesn't nail that customer experience, they're going to be roadkill eventually. Seriously, how hard is it to say hi to somebody when they walk in the door? Or treat your customers the same regardless of their appearance?
The author's other comments about growth having to come from outside the existing customer base via the mobility market also rang true for me. Lots of people ride in my town, but the local shops don't seem to be lobbying City Hall for more infrastructure. Get the City to build some separated bike lanes and more people will start riding. They'll need bikes, maintenance, bags for groceries, new pants after they lose weight, etc., might as well get them at the LBS.
It seemed like Nukeproof and Vitus were both healthy and growing. There's a Vitus DH bike development video on the Vital homepage right now. That's the downside of being owned by a big conglomerate, it doesn't always matter if your business is longterm viable so long as it's short-term helpful to gut you or shutter you. So lame.
If this is a dumb question I won't take it poorly. What exactly is a bike company, in this discussion? Like, how do you draw lines...
If this is a dumb question I won't take it poorly. What exactly is a bike company, in this discussion? Like, how do you draw lines between them in a way that one is distinct from another so that we can say one failed, one survived? Whether it was purposeful or accidental, all the North American, English language, mtb marketing I've seen has portrayed bike companies as big businesses in Morgan Hill, CA, or Hausen, Germany, or the like, with a room full of shredders at Autodesk workstations dreaming up mountain bikes when they aren't on the company pump track. All the operation in Taiwan, Japan, China, Malaysia, Indonesia, Thailand (etc) is treated like it's a giant 3-D printer the bros send their files over to and then wait for the shipping container, like they're flunkies who are willing to weld and box up bikes for less money than North America and Europe. This defies belief, right? Manufacturing must be where much of the engineering happens, in developing materials and tooling and laying out what's possible (technologically possible and business possible), and design must be, to some degree, picking from a list of choices. Does that sound too dismissive of designers -- sorry -- 'creating within a design envelope of the possible'?
Guerilla Gravity/Revved made things, so that example seems more straightforward, but I wonder about the others, or how you'd judge how much consolidation has really happened. Example right off the presses: "Engineered by KISKA on behalf of GASGAS", "DVO powered by WP". Who exactly?
Kiska is a product design agency owned by KTM which also owns WB and Husq.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same...
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same...
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on...
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
If they re-vamped the titan, it would be very high on my next bike list
Yeti is running sales on some current model year bikes. Are they just clearing out certain build with components they don't want to keep around, or is there more to it? I would not expect that brand to be having significant issues.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same...
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on...
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
my spitfire is one of the few bikes i regret selling.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same...
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on...
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
The problem in a nutshell. No bikes selling = no money for shops to buy bikes. No bike brands can sell bikes. So they can't pay factories to make their new bikes. So everything is at a hard stop. Good news is there are plenty of New bikes available at insane pricing. And participation in the sport is still at a record high. It's a great time to be a bike mechanic and to be an aftermarket company who has upgrade parts. It's a bad time to be an OE provider of bike parts or a bike brand. Road and Gravel are not as impacted as Mountain.
enjoy the super sales!!! Downside is you can't sell your used bike. If you can't. Repurpose that bike as a something else or upgrade it and don't worry about a new bike.
Ebikes are still flying off the shelves. End of Enduro is here.
Since there's a lot of speculation with GG, I'll add some clarity from a pretty reliable source. The GG demise is somewhat different from a lot...
Since there's a lot of speculation with GG, I'll add some clarity from a pretty reliable source. The GG demise is somewhat different from a lot of the other issues (i.e. overstock) the other brands are facing. The investor came in with a ton of money, some ideas and zero manufacturing experience. He loaded up management with loyalist, then made a left turn with the direction of the company. All the eggs were in that basket and they didn't hatch. I'm not sure if the chance to pivot had pasted or he just lost interest but the cash flow ended.
As for the industry in general, in my view, there are two types of boutique bike companies post pandemic:
A. Companies that had solid investors pre-pandemic and just stuck with them through the pandemic. These investors are mostly likely there because they have a passion or deep connection to the industry.
B. Companies that took on new investors during the boom. My feeling is that these investors don't have the same connection to the industry and could be more focused returns.
At the end of the day I don't think company A or B is more or less likely to fold. There are millions factors to running a business and it really just depends on management.
As a CFO (outside of the bike industry), and a lifelong mountain biker, I've been following the current boom/bust cycle in the bike industry. I have very reliable sources at GG and banker friends who lend to multiple bike companies or their parent companies.
@whitesq comments on GG are basically correct, they sold a majority equity position to a private individual investor. Initially they believed that investor had a shared vision for the company which included developing high end bikes and ebikes, in addition to growing their in house domestic revved carbon manufacturing as a contract manufacturer to other bike companies and other companies outside the bike industry. When it came to investing in new bike development, including an ebike, the investor decided that the ROI on new bike sales didn't make sense. He unilaterally moved the company focus to contract manufacturing. The GG company still exists, they just stopped making bikes. The decision to not develop new bikes occurred during the height of the bike boom, way before they stopped selling their current models this year.
The 2020-2023 boom/bust cycle of the bike industry, (and all specialty/luxury consumer good industries), is a perfect example of Keynesian economics. Low interest rates (almost free money) drive increased consumer borrowing/spending. Which drive increased capital/inventory investment by companies. Which eventually drive an excess inventory induced recession when interest rates increase to curb inflation. The only difference was this time we had COVID manufacturing shutdowns combined with lockdown induced demand inflation. These factors only exacerbated the inventory build up across the industry.
Most smaller bike company owners (including GG) were smart and capitalized (literally) on the crazy investment demand across all outdoor product industries from VC, institutional investors and individual angel investors. They leveraged the extremally high market valuations (EBITDA multiples) by selling equity stakes and they got richer than was ever previously possible. Unfortunately, when the irrational exuberance by the investors ended, many bike companies could never keep up with their new owner's return expectations.
Most bike companies didn't over extend on the debt facilities during the pandemic induced bubble, but they are trying to borrow now from banks in order to fund their massive inventory levels (working capital) while they try to weather the current storm.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same...
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on...
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
Yeti is running sales on some current model year bikes. Are they just clearing out certain build with components they don't want to keep around, or...
Yeti is running sales on some current model year bikes. Are they just clearing out certain build with components they don't want to keep around, or is there more to it? I would not expect that brand to be having significant issues.
It was not publicly announced but yes, RideFast Racing has closed the business.
Well that's going to make this wheel set hard to sell.
Anyone want some 29" ridefast mainlines?
Thanks for the update.
Santa Cruz were on sale for the whole summer and it's still going on, I guess it is just a matter of time before they add their 2024 bikes on it.
Trek had a very weak sale this summer that ended and now they're back with deeper discounts for fall. When I saw the first sale discount amounts I said to myself that they were very confident and it looks like it didn't worked out. They have a crazy amount of Slash gen 5 to sell.
Giant are on sale since a few months and the sale is still going on...they're fully stocked.
Specialized started discounting this fall here in Canada and it looks like they have plenty of bikes to sell.
Inventory seems to remain too high even with all of the sales going on and I'm pretty sure discounts are going to get deeper this off season.
Winter is going to be tough and these discounts are going to roll into 2024 for sure, but it's hard to pinpoint a specific company that could go under the bus. Maybe Kona & Norco are going to struggle a little bit more, but not sure how bad it could be.
I've had Kona on my watch list. The abrupt pivot away from IBD's to D2C signaled, to me, that they felt they needed the revenue fast. Problem is their pricing still follows IBD levels.
The other 'big' brand that I've been concerned about is Marin. Anytime someone does a BOGO you have to wonder.
I think the other big players have enough resources and a big enough market share to ride out the next 18-24 months. It won't be pretty (layoffs, reduced product selection, etc) but they'll still be around when things get back to normal.
The smaller operations should be okay provided they managed to avoid getting in an inventory trap (correctly forecasting a soft-landing or not having had the resources to get themselves into an inventory glut) - they've always been niche and their brands (should) have enough value to still be desirable when other brands panic discount.
Kona is a zombie brand right now. Their 'pivot' happened without any warning to their dealers, and they also laid off a lot of people at the same time. And prior to that, new models they'd been promising for at least a year were abruptly cancelled. The whole thing reeks of desperation. Not entirely sure who's really steering the ship at this point. Part of me would like to see the brand bounce back (not least because I still own one of their bikes, and enjoy it a lot) but I also would not be surprised if they close up shop completely in the near future.
Wasn’t Kona bought out by an investment firm amid all the Covid driven company sale craziness.
Yes. With all the usual promises of respecting the brand's legacy, expanding on its strengths, etc.
"Kent’s investment will enable Kona to invest more meaningfully behind these goals to better serve our independent retailers, team members, and consumers worldwide." (https://www.bicycleretailer.com/industry-news/2022/01/19/kona-bicycles-…)
They left independent retailers out in the cold and undercut them on pricing on existing inventory, fired their team members, and as for consumers... well, you can be the judge.
EDIT: more details available here - https://www.bicycleretailer.com/retail-news/2023/06/26/retailers-unimpr…
Wow. This is some great stuff in here. Keep it coming!
One of the most interesting (and civil!) threads I've seen here, thanks for kicking it off!
The impact on IBDs will be interesting (and sad) to see. Major brands are in survival mode and are royally screwing their loyal dealers in ways they haven't been screwed before.
Bump for some (not so good but) foreshadowed news. https://www.bicycleretailer.com/industry-news/2023/10/17/signa-sports-u…
Looks like Nukeproof and Vitus having some difficulties.
Nukeproof not so nuke proof after all? Too soon?
Major brands seem to be adapting to stay afloat and deal with this volatile world we are currently seeing. Hopefully bike shops will be making positive changes to maintain their business and ensure their longevity.
Here is an interesting read:
https://cyclingindustry.news/comment-uncomfortable-truths-and-the-opportunities-they-present/
That was an excellent article. Shops can be their own worst enemy, and crap customer service [ESPECIALLY towards women] is enemy #1. Regardless of the unpleasantness inflicted upon the IBDs by the big brands, if a shop doesn't nail that customer experience, they're going to be roadkill eventually. Seriously, how hard is it to say hi to somebody when they walk in the door? Or treat your customers the same regardless of their appearance?
The author's other comments about growth having to come from outside the existing customer base via the mobility market also rang true for me. Lots of people ride in my town, but the local shops don't seem to be lobbying City Hall for more infrastructure. Get the City to build some separated bike lanes and more people will start riding. They'll need bikes, maintenance, bags for groceries, new pants after they lose weight, etc., might as well get them at the LBS.
Did anyone have Nuke Proof on their bingo card? I didn't.
https://singletrackworld.com/2023/10/signa-sports-financial-woes-future…
It seemed like Nukeproof and Vitus were both healthy and growing. There's a Vitus DH bike development video on the Vital homepage right now. That's the downside of being owned by a big conglomerate, it doesn't always matter if your business is longterm viable so long as it's short-term helpful to gut you or shutter you. So lame.
Working for a business that traditionally supplies product to Wiggle, yes.
Kiska is a product design agency owned by KTM which also owns WB and Husq.
I would be curious about Banshee and their survival. Nice bikes but no marketing, not so often refreshed collection, a few dealers and mostly the same fan base can be a hard place to be at this time.
Thats an interesting one, but Keith has been pretty open about the brand and surely has an account here as well (he answers customer questions on some other forums, not sure if mtbr or nsmb, but one of those) and always said they keep everything pretty minimum and optimised and there are like 5 people empoyed by Banshee in total. And IIRC they operate in batches so they dont order a lot of bikes to be kept in storage which reduces the risk. They have been around for a long time too so they must have been through thick and thin. I used to ride Rune and was an amazing bike so a Banshee is always an option for me.
If they re-vamped the titan, it would be very high on my next bike list
I would think Whyte Bikes would be pretty marginal about now. They took on more outside investment but that only keeps the lights on for so long.
Yeti is running sales on some current model year bikes. Are they just clearing out certain build with components they don't want to keep around, or is there more to it? I would not expect that brand to be having significant issues.
my spitfire is one of the few bikes i regret selling.
Ditto for my Prime. Such a good bike.
The problem in a nutshell. No bikes selling = no money for shops to buy bikes. No bike brands can sell bikes. So they can't pay factories to make their new bikes. So everything is at a hard stop. Good news is there are plenty of New bikes available at insane pricing. And participation in the sport is still at a record high. It's a great time to be a bike mechanic and to be an aftermarket company who has upgrade parts. It's a bad time to be an OE provider of bike parts or a bike brand. Road and Gravel are not as impacted as Mountain.
enjoy the super sales!!! Downside is you can't sell your used bike. If you can't. Repurpose that bike as a something else or upgrade it and don't worry about a new bike.
Ebikes are still flying off the shelves. End of Enduro is here.
As a CFO (outside of the bike industry), and a lifelong mountain biker, I've been following the current boom/bust cycle in the bike industry. I have very reliable sources at GG and banker friends who lend to multiple bike companies or their parent companies.
@whitesq comments on GG are basically correct, they sold a majority equity position to a private individual investor. Initially they believed that investor had a shared vision for the company which included developing high end bikes and ebikes, in addition to growing their in house domestic revved carbon manufacturing as a contract manufacturer to other bike companies and other companies outside the bike industry. When it came to investing in new bike development, including an ebike, the investor decided that the ROI on new bike sales didn't make sense. He unilaterally moved the company focus to contract manufacturing. The GG company still exists, they just stopped making bikes. The decision to not develop new bikes occurred during the height of the bike boom, way before they stopped selling their current models this year.
The 2020-2023 boom/bust cycle of the bike industry, (and all specialty/luxury consumer good industries), is a perfect example of Keynesian economics. Low interest rates (almost free money) drive increased consumer borrowing/spending. Which drive increased capital/inventory investment by companies. Which eventually drive an excess inventory induced recession when interest rates increase to curb inflation. The only difference was this time we had COVID manufacturing shutdowns combined with lockdown induced demand inflation. These factors only exacerbated the inventory build up across the industry.
Most smaller bike company owners (including GG) were smart and capitalized (literally) on the crazy investment demand across all outdoor product industries from VC, institutional investors and individual angel investors. They leveraged the extremally high market valuations (EBITDA multiples) by selling equity stakes and they got richer than was ever previously possible. Unfortunately, when the irrational exuberance by the investors ended, many bike companies could never keep up with their new owner's return expectations.
Most bike companies didn't over extend on the debt facilities during the pandemic induced bubble, but they are trying to borrow now from banks in order to fund their massive inventory levels (working capital) while they try to weather the current storm.
https://www.pinkbike.com/news/nukeproof-vitus-chain-reaction-cycles-and…
Uh oh
they did last year?
And just went DTC.
Post a reply to: Will more companies be shutting down in the next 12-24 months?