Hello Vital MTB Visitor,
We’re conducting a survey and would appreciate your input. Your answers will help Vital and the MTB industry better understand what riders like you want. Survey results will be used to recognize top brands. Make your voice heard!
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The Vital MTB Crew
I haven't worked bike company side, but I've seen quite a few shop accounts and a few friends work in shops and the majority of their money is made on low end bikes, parts and servicing.
High end let's say $5k+ AUD bike sales are just so rare relative to selling 10 kids bikes and helmets etc etc.
The thing I'll say is Trek Giant etc have their work cut out for them in the commuter space.
I'm in Paris currently and the brand Dance is very popular here, very sleek belt drive e-bikes that are all leased, come with theft insurance included etc. They're selling bikes like cars, it's very interesting.
A friend just took a job in London and through a partnered company can salary sacrifice to get a Cowboy ebike as a salary package (it even has upside down forks!). The old business model of selling expensive ebikes to consumers is gone, it's the Fintech revolution of rental payments with servicing and extras included, and to be honest, why would I go with Specialized when everything is bundled for free for a monthly payment?
When I was at Sea Otter last week, I asked a few brands, "What's the state of the bike industry post-COVID?" Most people's responses were broad and not super in-depth, but overall, most people are optimistic looking forward. And the brands that are feeling it the most didn't plan appropriately for the inevitable decline in demand after the COVID boom. Here is the audio from the conversations:
https://www.vitalmtb.com/features/state-mtb-industry-post-covid
Yeah, no doubt that the old model of selling a high-end toy at full price directly to an enthusiastic recreational end-user is not going to translate the same way to a transportation e-bike user. Agreed that the Big Four have a long way to go in tracking down and wooing that customer, but that customer is out there in droves and I'm confident when the Big Four see enough of their sales walking out the door towards other, more creative marketing brands, they'll catch on. My main point is that the bike sector is still very much alive and well in the long term, even if the short term outlook for firms is rough. I think we agree. Like you said, those ebikes are selling like hotcakes in Paris, a city that just put A LOT of political capital into bike lanes.
I loved the questions, but those were the expected public facing answers. PON Bike (Santa Cruz) and Trek are certainly feeling the pain. I have no idea about Transition, though they've made a deliberate choice to grow slower than they could have. Hopefully that means their balance sheet is strong enough to get through this in one piece.
Are these brands optimistic looking forward 2 years? Yeah, probably. But I'd bet my entire 2024 riding season* that they're mostly freaked out, wondering how they're going to survive for the next 18 months until inventory is cleared out and normalcy returns. Brands who run lean, with low debt, and who didn't massively over-order, will probably be OK.
* I'm off the bike, recovering
BAAS [Bicycles As A Service] could be a real thing alongside on-demand hire.
I think for commuters it absolutely will be.
There is a long running trend in economics where products shift from sole purchase upfront to utility payments, it occurs with almost everything. You go as far back as lighting, use to buy candles or wood, now rent electricity usage. Compute for companies, you use to buy your own server, now you hire via AWS or Oracle or someone. Hell even high end clothes the rental market is rapidly growing. I think for something as ubiquitous as urban transport it's inevitable that utility payments will come to dominate.
@Jason_Schroeder the podcast was great, thanks for asking the questions.
I don't think it'll be as bad for most companies as what we expect, I think a lot banked a huge profit from the boom, or maybe a small loss, but they'll just go forward. MTB isn't shrinking they'll survive.
The podcast was great, interesting to here how those companies see the future. There definitely seemed to be three types of answers: 1) no real answer, 2) a general answer about the 'industry', and 3) then a real answer about the company they work for. I think you can take some insight into the how they're doing depending on which category their answer falls in to.
The corporate entities towing the 'wall of positivity' company line whilst offloading their massive overstock at half price (insert this is fine meme).
Interesting to hear so many say the key to growth is to stop gatekeeping (because it's our fault) and welcome new riders.......whilst a midrange bike is now $6k and riding kit is $200 shorts and $100 jerseys.
The pandemic accelerated the crash but the downturn has been coming for a long time and is largley self inflicted by 'the industry' (nefarious amorphous conglomerate that it is /s )
You see a lot of Revels here in Colorado. Just so folks know
There's been some discussion about whether we have an oversaturation of companies making frames/bikes, but surely the pool of brands attempting to sell MTB apparel is even larger. The number of companies selling $75 "tech tees" is ridiculous. I'm sure the up-front investment required to sell a line of clothing is much smaller, and the financial position less precarious as a result. Still seems like a very, very crowded market.
afaik the whole mtb division was in bentonville, at least thats where they were hiring for when i quit right before the mtb launch
All the bike industry stuff in Bentonville has always felt precarious to me. It seems like it all hinges on the Waltons staying interested in bikes. If they loose interest, or when they get older, does the bottom just fall out from under it? I’ve never visited there, so maybe I just have a skewed outsider’s view?
The tourism industry in Bentonville has a large interest in keeping the trails coming. The people who live there (and many have moved there because of the outdoor scene) are invested in continuing keeping the trails coming. I don’t think at this point the Walton’s are a key to the industry there.
ENVE purchased by PV3 Investments - press release below
ENVE Composites Acquired by Utah-Based PV3 Investments
April 30th, 2024 Ogden, Utah - Amer Sports, parent company to ENVE Composites, has announced that ENVE has been acquired by PV3, a Utah-based private investment firm whose owners are avid cyclists and have been familiar with the brand for many years.
Amer Sports’ Chief Operating Officer Michael Hauge Sørensen said, “ENVE has gone through major changes in the past years. The brand has positive momentum, and we see that it has good potential. However, after a thorough strategic evaluation, we have concluded that the next phase of development should happen under new ownership. We believe PV3 is the most suitable owner for ENVE to realize and drive its next growth phase.”
ENVE Composites was founded in 2007 and is one of a small number of U.S. cycling brands to have American manufacturing. The company’s dedication to performance products and in-house manufacturing has allowed it to be an innovation leader in wheels, components, and bicycles while partnering with many of the best athletes in the world.
In 2016, ENVE moved into its Ogden, Utah-based headquarters. The 80,000-square-foot building houses engineering, R&D, manufacturing, sales, marketing, customer service, and finance functions that provide employment opportunities to the local community. PV3 is dedicated to maintaining ENVE’s heritage as a Utah-based manufacturer and leader in composites technology.
“We have confidence in the direction ENVE’s management team are taking the company and we want to continue building the brand’s legacy as a performance leader and U.S. manufacturer while providing the necessary support for continued growth,” said Mark Hancock, Principal of PV3.
ENVE’s General Manager Mike Stimola stated, “This is an opportunity to take ENVE to the next level through local Utah ownership. While the current bicycle market is challenging, ENVE is growing based on our product innovation and professional team partnerships.”
Mike Stimola was brought on by Amer Sports in January 2023 and will continue in his current role. With the acquisition complete, ENVE’s operations will continue as normal.
Closing is expected to take place in the next few weeks and the parties have agreed not to disclose the transaction details.
###
For further details, contact:
Neil Shirley – neil.shirley@enve.com
ENVE Composites, LLC
508 W. Stockman Way
Ogden, UT 84401
About ENVE
Located in Ogden, Utah, ENVE Composites is a manufacturer of handmade carbon fiber bicycle frames, rims, and components. Partnering with the world’s best athletes, ENVE combines the best composite technologies with real-world athlete feedback to provide our customers with the ultimate in performance,
durability, and quality. ENVE designs and manufactures 100% of their rims and the Custom Road Bike in their Ogden, Utah, USA facility.
About Amer Sports
Amer Sports is a global group of iconic sports and outdoor brands, including Arc’teryx, Salomon, Wilson, Peak Performance, and Atomic. Our brands are known for their detailed craftsmanship, unwavering authenticity, and premium market positioning. As creators of exceptional apparel, footwear, and equipment, we pride ourselves on cutting-edge innovation, performance, and designs that allow elite athletes and everyday consumers to perform their best.
With over 11,400 employees globally, Amer Sports’ purpose is to elevate the world through sport. Our vision is to be the global leader in premium sports and outdoor brands. With corporate offices in Helsinki, Munich, Kraków, New York, and Shanghai, we have operations in 40+ countries and our products are sold in 100+ countries. Amer Sports, Inc. shares are listed on the New York Stock Exchange. For more information, visit www.amersports.com.
About PV3
PV3 is the family holding company of Mark Hancock, an experienced and successful entrepreneur and cycling enthusiast.
"'We have confidence in the direction ENVE’s management team are taking the company and we want to continue building the brand’s legacy as a performance leader and U.S. manufacturer while providing the necessary support for continued growth,' said Mark Hancock, Principal of PV3."
Stop me if you've heard this one before...
I'm gonna disagree. For better or worse, Walmart-related money is responsible for Bentonville MTB being a thing. However, I don't think there's a huge risk of that investment drying up or their interest in cycling suddenly stopping. Their headquarters are in Bentonville and they're trying to making as desirable as possible for highly-skilled tech workers (and others) to move there so they can compete with Amazon. That's why they invest in outdoor recreation, art, culture, and education.
Not saying the riding in NWA isn't good. But it wouldn't have the profile it has (or trails, events, etc.) without the direct and indirect interests of the largest company in the world (by revenue).
Just going to leave this here...
+6 Months.
ENVE composites announce management restructure and appoint ex CFO of Kickin'! Sportswear to lead the company.
+12 Months
ENVE to shut Ogden offices and production as company focus on offshore manufacturing with the loss off 150 jobs.
They looked at the company.......saw how they can cut production overheads whilst maintaining the premium price. Will dilute the brand whilst wringing it for as much as they can then dump whats left in 3-5 years.
Maybe they'll have a budget provision this time to buy off Paul Aston.
Surerly ENVE do 90% of their sales in the road space anyway? MTB is small fry for them.
Discussing brand failures, it's interesting to see Haro and Mongoose re-enter the market with affordable aluminium bikes (presuming they make it to public release).
Sounds like you're a shitty boss. Good employees aren't hard to find if you pay them reasonable wages and treat them respectfully. If minimum wage is your starting point you're already all kinds of fucked from the jump.
Insulated ponchos are sick, highly recommended!
I think Amer Sports were expecting bigger profits but Enve isn't on the level of trying to make products for everyone. They make products that appeal to a smaller audience and they aren't looking or needing the big numbers of a larger company.. I think they will be fine..
https://www.bicycleretailer.com/industry-news/2024/04/30/enve-gm-says-b…
The new env owner apparently is a newly minted/self made billionare from the company he founded who lives 20 minutes away, owns two of their bikes and whose son had a summer job building wheels there. Honestly sounds like the best buyer they could hope for.
It also seems like its not a crazy time to be investing in US manufacturing.
Probably the best thing for Enve. Once Amer sold off Mavic it left Enve as the only Amer brand in the cycling space. It would just continue to float about on its own without any support from Amer, but still be expected to contribute.
One would think after having a bulk of the world's manufacturing sector shut down a few short years ago that doing more domestic manufacturing would be viewed as a good idea... But....
I heard rumors that Walmart is buying Specialized and part of Trek? Anyone else hear this?
I saw someone on YouTube mentioning this, but I haven't heard anything solid.. Plus, it could be members of the Walton family, which isn't the same as Walmart..
Are we doing bike shops/internet shops too? Just saw going out of business ads for Colorado Cyclist and Planet Cyclery on FB. That sucks.
not the typical position you usually find listed in the swiss bike job listings:
https://www.ride-mtb.com/de/stellenangebote/scott-sports-ceo
Seems like a hostile working environment...
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