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This is too off topic but I'll give one last reply then move on.
If you seriously believe that America is a worse place on minimum wage than south Africa et al you should take a flight to Joburg. Yes America has an enormous poverty rate, however we're not discussing that, were talking minimum wage employment.
The fact you don't understand is large parts of the G20 don't even have stable water or electricity, let alone health care. The average life expectancy of a male in south Africa is 15 years less than USA (59 vs 74).
A Chinese factory worker is a migrant living in a dormitory 1000km from home working 6 days a week 10+ hour shifts with 1 national holiday where he can go see his children.
US healthcare sucks, US poverty is just sad, but even then, your god damn lucky to have not been born elsewhere.
Surely SRAM will look at apparel shortly no? It's a big money market for the industry
Sram already bought Velocio in 2022.
https://www.bicycleretailer.com/industry-news/2022/03/09/sram-acquires-apparel-brand-velocio
(not) sorry to keep beating this dead horse, but this comparison gets tricky with exchange rates, inflation, cost of living, etc. So here are some interesting stats:
Every State except Mississippi has an average take-home consumption rate (the total of all income, government benefits, etc) higher than every single country in Europe, including the Nordic countries. The average income of the lowest quintile in the USA is roughly equal to the 2nd highest quintile in the EU (before Brexit). The average house size in the USA is 2,200 square feet, in Europe its 1,300 square feet. The USA averages 860 cars per 1,000 people, while in Europe, the #1 country for car ownership is Poland, with 761. Most Western Euro countries are at or below 500 (Like Finland, at 577 per 1,000). Americans also eat more meat, work longer hours, work harder (efficiency per hour), travel more, have larger families, etc.
The USA has lots of problems, yes. Much of the economic advantages Americans enjoy comes from the PetroDollar making imports cheaper, essentially having other countries subsidize the cheap crap we import. Sustaining the PetroDollar requires the USA's military to wreak havoc around the world, its true. We also prop up dictators for access to their natural resources, and on and on. We also have an obesity/health/mental health crisis (probably all diet related). The food is dramatically less healthy and tastes worse.
However, when it comes to the economic comparisons only, there really isn't a comparison.
@Spomer Is there a forum topic for economics? I love these conversations, whether about government economic policies or the cost of manufacture in different countries, or why unrefined titanium is so expensive. But we've kinda derailed this one.
we have the "off the bike" forum area that can be found here - https://www.vitalmtb.com/forums/main
https://www.cyclingnews.com/news/surprise-specialized-sale-slashes-hund…
Big S hurting as well ?
They have so much inventory to go through, it's not even funny.
As seen on this very website, you can get a Status frame + shock for $750. Insane.
It’ll be interesting to see if they can make it through this without relinquishing majority, or complete, ownership to Merida.
Specialized has had pretty much everything on sale for more than a year now..
https://www.cyclingweekly.com/news/rapha-lays-off-employees-closes-nort…
I'm sure I read somewhere that Rapha has not made an operating profit since their acquisition.
I'm ready to buy their stuff on deep discount. Superb quality, but $$$
Eh, I'd be absolutely shocked if Specialized shows any real weakness through this period of time. While its true they have significantly discounted product for ~12 months, they also have ~40 white collar positions open throughout the world. Usually you see companies go on a full hiring freeze if there are real material weaknesses. To add, Id also bet you pull all high dollar racing efforts if cashflow is really bad.
I think we sincerely underestimate the margins a vertically integrated brand like Specialized has the ability to sell at. While they may not be making a lot right now, I'd bet they are at least selling at their hurdle rate, which is to say they can kick this can down the road for as long as they need to.
Specialized bought the 49% ownership back from Merida in the early 2000's.
When profits were increasing 20% or more every quarter from 2005 to 2012, they operated like the Catholic church and bought tons of property all over the world, including their own factories in China, and built a wind tunnel.
They may downsize the workforce, but Specialized has the capital to survive the COVID bubble collapse.
Margins on $300+ bibs and $200 jerseys must be nice though.
I put Rapha in the same category as Kitsbow. I spend a lot of money on bike, I have no less than 6 bikes right now and enough frames and spare parts to build 5-6 more, I usually travel multiple times a year to ride, Pisgah, Kingdom Trails, Sedona, PNW, 10 day Icelandic mountain bike tour etc. All that to say, I spend a lot of money on mountain biking. But when it comes to clothes, I’m not super picky or bougie. I usually buy clothes when they are on sale or when I see something on the clearance rack at REI. I don’t really have brand loyalty with clothes the way I do with tires, grips, drivetrains etc. I probably have 10-15 different brands of riding clothes and I don’t wear matching “kits”, I mix and match brands on nearly every ride.
Maybe I’m in the minority when it comes to riding clothes, but I can’t bring myself to spend more than 75-80 dollars on shorts and 40-50 dollars on a jersey. I’ll spring for slightly nicer Bibs but even then I don’t spend more than 120-130.
Ha, you must not have kids.
I have 2.
I think we'll be seeing more "right sizing " from both Giant and Specialized in the upcoming years.. The only difference is that the plan got leaked on the Trek side.. Unless some cut future orders before Trek, which given the Shimano Q1 report, i suspect that is happening..
I think we're in an ugly couple years right now due to Covid forecasting, but if I'm Specialized, Trek, or Giant, I'm really bullish about the next decade or three. The world is moving into cities, oftentimes mega cities, and bikes are a powerful way to get around cities, especially now that e-bikes are an option. Cars in cities are an urban planning disaster and cities around the world are scrambling to integrate better bike infrastructure as fast as they can. In addition to that, outdoor recreation continues to be a growing segment across all ages, genders, and demographics and traditional stick and ball sports continue to drop in participation (in western countries at least, I don't know statistics for traditional ball sports in the global south). I think we're going to see year-to-year increases in bike participation for a long, long time. Increases in participation = sales.
I did and have no regrets about the purchase, aside from finding the longer reach more agreeable than on my Trance X.
Anyone who downvoted this, has only signed the back of a paycheck, and has never had to sign the front (lower right side).
Minimum wage in SeaTac is USD 19.71.
And then try to get employees, who could just sit at home and make more money from American Disability.
The Rapha in Bentonville thing made no sense. I can't think of a less "Rapha" place than Arkansas (billionaires and hangers-on excepted). As with a lot of things in Bentonville, once the folks holding the money lose interest, the money dries up, and the business withers on the vine of the actual free market without benefactors to sustain it.
We all know the majority of money is made on basic low end models and commuter bikes going forward.
As an industry insider, how much do you think the brands value the cool marketing material and brand value from mountain biking, to sell their commuters and bulk bikes?
I think for the big brands that's a very key part, and unfortunately it means they take the profit from boring bikes and squeeze the enthusiast MTB market and remove innovating small brands by using that capital.
Great question. I'll answer your bike industry question with a car industry analogy: Toyota sells a lot more Corollas and Rav4s than Tacomas and Tundras, but it advertises the trucks a lot more than cars or crossovers. It's not impossible to advertise a Corolla but it's a hell of a lot easier to advertise the Toyota brand and get the "T" in people's eyeballs with aspirational images like a big pickup truck driving over piles of gravel and rebar with a bed full of BBQ grills draped in the American flag. I think the same applies to bikes. I can't think of a time I've ever seen an advertisement from Specialized, Trek, or Giant for their non-electric commuter bikes.
Not to be a ninny, but I'd love to see what the product mix really looks like (at Specialized especially) against margins and profitability. While I wouldn't bet against the idea that the lowest end of the mix is the biggest moneymaker, I also would want "basic low end" to be defined before I took that bet. Hell, in some ways, the bikes I ride may be considered "basic" or "low(er) end" (GX, GRIP 1, alloy etc)
That said, taking your hypothesis at face value, I am not sure it matters much. The market is *always* going to be competitive, especially something sexy and cool like bicycles. Sure, a smaller company won't have the same economies of scale that a larger company will have. These advantages include more access to capital at significantly lower rates, volume discounts from vendors, better vendor terms, more access to talent, better access to certain types of manufacturing etc etc etc. This is always the case across most industries, no matter how a company prices their products against market demands.
Semi related, haven't a few car companies sold their flagship supercars at a loss just because they can? IE, I know Bugatti did this with the Veyron, I think the NSX ended up a massive loss etc.
Fer sher... But what if........... https://youtu.be/NF0lmraNOMk?feature=shared&t=23
Preaching to the choir. I'm all in on the Gen 1 Sienna, but we're not the average customer
Nothing that "we" ride is basic in their portfolio, think $400 FX with rim brakes. It's an upgrade to discs, and they might still be cable. They sell the hell out of those things.
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