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While I work in a different industry, Construction/Custom Homebuilding, I saw a similar thing happen in my field. People getting decks built, bathroom renovations, buying a new home, etc. earlier than they would have under normal circumstances, pulling sales from the future into the present. The major difference I noticed was that none of my suppliers or contractors ramped up their production or workforce to meet demand. General contractors just had to accept longer lead times for everything. I went from ordering cabinets 5-6 weeks out to 10-12 weeks, garage doors went from 3 weeks to 16 weeks. Even scheduling contractors increased, I used to schedule my electricians 2 weeks out, but then it jumped to 6 to 7 weeks. Most of the higher-ups at the companies told me the demand was unsustainable and would eventually normalize. I'm sure some of my contractors could have increased their workforce and crammed more projects/profit into the 1.5 - 2 year window when things were crazy but most chose not to.
The construction industry is not filled with MENSA members, so what is it about the Bike Industry that made their handling of pandemic and post-pandemic so poor?
Does someone did a list of defunct brand for the past 24 months ?
BMC asked authorities for approval of potential work time reduction
https://www.grenchnertagblatt.ch/solothurn/grenchen/kurzarbeit-bei-bmc-…
evil lays off some employees. mega bummer
It might be as simple as the fact that construction is a more mature industry and also more naturally cyclical, so they could make a better guess at what was on the other side just based on experience. Or just didn't panic/get carried away.
Definitely not the last announcement we will see like this. I will go on record saying there is a lot more pain coming unfortunately. Inflation seems to be rebounding and consumers are no longer sitting on large piles of savings.
I give this a thumbs up, not because of the situation, but the honesty that Evil is handling a very unfortunate situation. Its nice to see while they maybe Evil in name, they have a bigger heart than some other brands.
what inflation?
How long can Pinkbike last in its current form? Staff heavy and their original content has low viewership. At what point does Outside just convert it to a bike brand PR hosting platform and they start sharing the mega influencers content.
I think there might have been a thread for this elsewhere, but I can't spot it in and amongst all those Quickbooks threads...
https://www.cyclingweekly.com/news/almost-every-member-of-staff-axed-at-wigglecrc-as-company-hits-rock-bottom
WiggleCRC has been bought up, seemingly by Mike Ashley - aka the worst case scenario. Not sure where they go from here, but that's the end of Wiggle, CRC, Nukeproof, Vitus, etc. as we know it.
Not familiar w/ Mike Ashley's previous business ventures or reputation (I assume he's better known in the UK, but not a broadly recognized name here in the US). Why do you consider him the worst case scenario?
His group is accused of bad corporate practises, paying below minimum wage, putting companies they own into administration to avoid redundancy payments, buying shares in rival companies in an attempt to destabilize them, changing locks on business companies they've bought into, not paying rent due on premises. The list goes on.
Obviously he denies all these accusations (apart from the one about minimum wage, he happily admits that), but he can't deny what a shitshow he turned Newcastle FC into when he was the owner. There's an eye opening article here for anyone interested.
https://www.theguardian.com/commentisfree/2016/jun/07/mike-ashley-sport…
All in all he's a pretty hard guy to like.
Few thoughts...
1) Trailforks is a great cash flowing app. I know its adjacent to PB but its important to note Outside is likely making real money from the space.
2) I see traffic numbers all over the place for PB, but I hear they do 70-100M page views per month. Do the math on a CPM basis even running something like AdSense. When you ad up all their revenue streams (adsense, brand specific ad packages, youtube, podcast advertising etc etc), I'd guess they are doing something like $3-8M/yr
3) Expenses are relatively low, even with all their "content overhead" (again, so long as they are actually doing 70-100M page views per month).
I'm way oversimplifying here, but I would be shocked to find out the business isn't being run at a healthy profit.
Thanks for the explanation. Disappointing to hear.
That's pretty much what the revamped Bike Mag has been doing. Definitely a bummer. I hope not all bike media goes this route
So true. It blows my mind what Bike has gone to. Literally feels like AI generated clickbait retitles for already existing content.
Very good reporting going on at Escape Collective on how we got heree:
https://escapecollective.com/how-did-the-bike-industry-get-into-such-de…
Interviews a guy from Wiggle and has too many good quotes to list here. Ep. 3 is what I am sending to folks who are tangential to the industry; it really shows what kind of position we are in. One guy mentions that Kona laid off its entire sales staff.....
I'm pretty sure that's exactly what it is. The first news article on there now is titled "Rider Crashes Face First On Challenging Trail Feature"
It seems I was wrong - apparently he's just bought the IP, not the businesses, hence everyone being laid off now. I imagine he'll just use Nukeproof, Vitus, etc brand names on generic bikes in the same way he has with Muddy Fox.
Bad times.
Deviate Cycles has launched a crowdfunding campaign to fuel the next part of its growth, citing goals such as the introduction of an e-bike and eventually moving production to their home country Scotland: https://www.deviatecycles.com/become-part-deviate. Interesting times, these...
Deal confirmed, seemingly the IP and brand names were acquired for less than 10m GBP, as reported by retailgazette in the UK.
"Frasers Group has saved bike retailer Wiggle from administration, with the retail company thought to have paid under £10m for its brand and intellectual property.
The group has agreed a deal to snap up the brand and intellectual property* of both Wiggle and Chain Reaction Cycles, adding to its existing cycling companies, including Evans Cycles."
*this includes Nukeproof, Ragley, Vitus
RIP Nukeproof, Ragley, and Vitus
F
If you want some crazy backstory on how the whole SIGNA sports background and how it collapsed, this is a great read. You can skim some if you're not into the business nerdery: https://www.linkedin.com/pulse/postmortem-signa-sports-united-jacob-dud…
It's from the VP of NA expansion and explains who the background financing/ownership was.
This quote hit hard, for folks on bothsides of the collapse.
"Today, at least for the U.S. bike business unit, there is a laundry list of unpaid vendors. Some have even attempted to hit employee’s personal credit cards with $80k charges because we weren’t allowed to put a corporate credit card plan in place (note to self: this is a bright red flag). Incentive-based compensation plans were restructured in June to substantially delay the timing of payouts so that value has been vaporized (note to self: this is also a bright red flag). Accrued paid time off hasn’t been paid out yet, although I know there are some good-hearted people trying to make that happen. As of October 25th, back pay for wages/salaries has at least been resolved due to these people that are fighting for us."
Seconding this (and thanks for posting that Escape Collective podcast too, which is where I found the LinkedIn post).
Fezzari’s rebrand doesn’t fill me with confidence. Their bikes have been on hefty discounts for a loooong time now, and suddenly they decide that a new obscure name is a better way forward than a name that has recognition across the industry.
Further staff, spending and SKU cuts at Trek.
Overall spending cut by 10% with cuts to programs and positions.
Trek would substantially reduce its stock keeping units (SKUs), Trek’s model year 2026 SKUs will be 40% lower than model year 2024. This means that model year 2026 inventory will be 20% lower, measured in days in stock, than they were before the pandemic bike boom.
Read all about it here.
About reducing SKUs- I've always wondered how the big companies could offer so many varieties of essentially the same bike.
For example Fuel EX is currently listed with 22 variants, most have 2 color options and 7! sizes.
308 possible skus for one model of bike. That can’t be cheap or easy to manage, stock, warranty etc.
If there is one big overarching idea I would base my entire bicycle industry consulting business off of its this ^^^. Reduce SKUs - ALWAYS.
Unless you can show me a compelling reason you need the extra SKU, and it actually adds *real* value (not just choice) to the consumer, kill it.
My hypothesis is based off many of my favorite companies...
Tesla, Chipotle, Apple etc
You're not wrong but I think there's nuance depending on where you are in the supply chain.
If you're a retailer, you want to keep a curated selection of product available for your customers - enough that they don't feel the need to shop online but not so much that you're not getting healthy turns on your inventory. Your only real competitor is the Internet and you're always going to lose from a product diversity perspective but you can offer things the Internet cannot.
If you're a distributor then only thing you have going for you is the diversity of your product. You want to have everything a retailer could possibly need so that they don't split their orders and you win the market share competition.
Trek is technically a manufacturer... but I think you could treat them as a distributor in this situation. They want to have everything so that the retailer has little to no reason to go anywhere else. Which is why I'm frankly shocked by the SKU reduction. They're potentially giving back market share... but they wouldn't do that if they thought it would be a significant hit to their revenue.
I don't know what Trek is like in the European or Asian markets but Stateside, with all their shop acquisitions, I wonder if they can afford to drop 40% of their SKU's because they can mandate that these retail fronts only carry their product anyway... so they're not necessarily losing floorspace? Pair this with more restrictive dealer agreements for the shops that they don't own and they could strong-arm their way into not losing market share?
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