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Taiwan is awesome and I'd consider going there a perk. The food is amazing, the people are wonderful and the riding is way better than you might think.
The downside for me personally has to do with spending that much time away from my family. My comment wasn’t meant to suggest anything negative about Taiwan itself.
I place a high value on getting to be at home with my family every night. I have spent the majority of my career in manufacturing and it’s a lesson I learned early on from fellow welders and other manufacturing/construction trades that spent time “getting the bag” on jobs that included a lot of time away. The vast majority of them regretted it and took large pay reductions (30-50%) to get away from that lifestyle. You just can’t replace the memories with family and friends with an earlier retirement and extra toys.
Well said!
As a Milwaukeean I can tell you Mequon isn't as rural as you think. Hayes was maybe a 20+min drive from downtown Milwaukee. From what I've heard, a bulk of the cuts were made on the power side of the business. That said, I do wonder about their future. Brakes have been doing well-ish, but Reynolds/Sun/and Manitou goods have been on sale for a long, long time on their site and none of those wares really show up as OE spec aside from the Junit line. Aftermarket has better margins, but OE spec is what really keeps the lights on.
Diamondback (forgot they even existed) now downsizing - https://www.bicycleretailer.com/industry-news/2024/08/30/alta-cycling-g…
Sounds like Motion Instruments might be done; just got this (I placed an order but have not received it):
That sucks, I was really looking forward to using System 2 and also helping local young racers get their suspension set up using it.
Yeah, its a massive bummer since system two seems like it would be the easiest to use. I have a v1 and its okay, but was really looking forward to what v2 brought to the table.
Seems like a whole lot of bike-related brands/companies are learning hard lessons this year about the promises made during a buyout.
This one hurts. The motion instruments system is on the shortlist of things that really elevated by understanding of suspension dynamics and setup. Telemetry may not be applicable to every rider, but at least for me, Motion Instruments made the fancy tech accessible and completely changed my bike setup for the better.
I'm right there with you, decided I wanted to learn how suspension actually works and have gotten as far as I can reading/watching vidsnand using a ShockWiz and was really looking forward to tsking the next step.
I know BYB also offers data acquisition but it's a much more significant investment; MI seemed like the sweet spot for me (for where I am).
I'm going to sit tight for a bit and keep my fingers crossed that something gets worked out. It seems bonkers to me that they have the product but aren't going to ship it...
Just go this (tl;dr they're refunding people).
Still hoping they figure out a way to ship the product at some point!
"Hi Folks,
Lolë acquires cycling apparel brand Louis Garneau Sports
Louis Garneau Sports runs three brands Garneau, Sugoi and Sombrio. Louis Garneau himself had announced on social media that he had left the company recently, having accused the apparel company bearing his name as being "toxic".
https://www.bicycleretailer.com/industry-news/2024/09/19/bankruptcy-court-approves-giant%E2%80%99s-purchase-stages
Can't remember if the Stages bankruptcy is already in this thread. If not, court approved Giant's acquisition of the assets out of bankruptcy for $20M.
Curious what that's going to mean for their OEM deals; will Giant stop speccing bikes w/ SRAM since they're now a competitor (seems unlikely?). Curious to hear from the folks who know more about how this stuff works...
Giant has been using power meters branded as their own for a while.. I'm guessing those were Stages. I think they mainly use them on Shimano Road builds..
This post just popped up on Nukeproof's IG, in all likelihood it just means CRC is selling off remaining stock, FWIW (that's where the link in their bio points to):
Given the quantites and given the models on sale if you click the 'Nukeproof' category, it does look like an old stock sale...
Good find! Pretty good deal for an incredible components package. That said, I'm seeing a few other brands discount their product to the same levels...and you'll have a frame from a company that isn't defunct.
One my my ideas going into August was supply was beginning to really meet demand. I may be partially correct, but I am seeing deals out there from a handful of brands that is mind blowing. Digging in further, what I think is happening is brands are a lot more allergic to holding stock longer into the spring. Someone in their finance department has proven out time value of money to the ops/marketing people and they seem more willing to discount the product deeply in the fall and flip it to fight another day.
The problem with this is when I see bikes with GX Transmission and top tier suspension for around $4K I'm not so willing to (ever) pay what "MSRP" would be for a bike like that. The precedent set, especially when components/frames/complete bikes aren't improving y/y is sort of a wet blanket across the whole market.
...but at least this year, unlike last, inventories around such deals seem a lot more limited.
Another example...
...what is most crazy about YT is they are preselling a lot of these bikes. Like...they aren't even at the wharehouse yet but are discounted almost $2k. While I love this from a cashflow perspective, I can't imagine their margins are remotely healthy. All can think is they are somehow manufacturing frames for nearly free to make this all work. like..$100/piece lol. I can't figure it out.
regarding the finances now vs spring - they might want to get the sales on the books for '24 instead of carrying it over another year.
Sure. That's in part what I'm saying. Its a bit intertwined to this whole thread, but time value of money is basically everything in finance (for better, and for worse). If you are unfamiliar, effectively how time value of money works is it weights near term cashflows more heavily than cashflows further in the future. The rationale is a dollar today is more valuable than a dollar tomorrow. The problem with time value of money (or discounting of cash flows) is it puts so much onus on the short term it sometimes prohibits longer term thinking.
Now, there may be tax advantages to booking revenue now vs the future depending on the company, but basically everything I do is on a pretax basis so I'm the wrong guy to comment on that side of things
Shameless plug - more on time value money/DCF/NPV here https://jeffbrines.com/2024/01/07/net-present-value-is-ruining-real-est…
The other thing of course is what revenue/profit targets have investors (whether institutional or otherwise) imposed, and what are the incentives for achievement or penalties for missing them. I've been in a few PE/VC backed enterprises over the years where that's a play, and sometimes even midpoint in the year, we'd have to go on a forward booking frenzy (almost no matter how harmful to longer term opportunities!) to tick that arbitrary box.
You then end up with "consumer conditioning" as you mentioned earlier, and brand/product perception of value declining, so MSRP becomes a distant mythical creature, not the norm.
Fair point. This goes to illustrated one of the big problems when you have private equity involved - short time horizons type of strategy can often trump long term sustainability.
Any investor really concerned about long term value creation wouldn't care about any one particular quarter as much as they'd care about the overall health of the company and the company's ability to drive durable profits well into the future. Many private equity firms are more interested in telling a growth story and selling the company (which they have to do within their investment time horizon) at an "attractive multiple" - which can include some "lipstick on the pig" type behavior, which is what you are describing.
If I was on the other side of the table and a PE firm was trying to sell me a bike company that had demonstrated top/bottom line growth BUT their margins were going down, I'd be asking a lot of questions. Margins are an easy signal to parse and often tells a story as to what is really happening within a company, what the market dynamics actually look like and how big of a moat they really have. If margins (especially gross margins) come down substantially as they sell more product, I'm sincerely questioning the size and durability of the company's moat. As a result, the multiple I assign to the company will also come down. There are exceptions, but this is a general rule.
Fun fact, Wall St goes out of its way to try and parse the non-core, non repeatable events from a company's quarterly earnings. I'm not saying bargain basement blowouts would count as an "ex items" type of thing, but the big point I'm trying to make is as short term and greedy as Wall St may be, they generally are more interested in what the company can do into the future not just for "this quarter" or "that quarter". After all, the value of the asset is based on all future cashflows and discounting them back to today...Changing timing by a hair doesn't impact really anything.
Escape Collective reporting that The Pro's Closet appears to be up shit creek without a paddle:
"TPC has paused acquisition of any new bikes and also stopped booking service appointments at its shop. The company reportedly went through a deep round of layoffs late last week, with remaining staff told the business could close as soon as October 2.
Two former employees told Escape Collective that The Pro’s Closet is in dire financial shape and at imminent risk of going out of business."
https://escapecollective.com/the-pros-closet-may-be-in-deep-trouble/
My personal opinion is that TPC tried to grow way beyond their original niche and it turned out to be a bad business plan. Sucks for the employees but one of the more predictable failures, IMHO. Trying to be too many things at once instead of doing one thing well.
Some great deals over there right now. Just got a pretty mint used bike for 1/4 of retail. They'll even knock some cash off if you message them.
Hey Jeff, enjoyed your thoughts on short-term thinking and the time value of money. Left comments on your post and subscribed to comments if you want to banter about asset valuation on your site.
The Pro’s Closet Announces Closure After 18 Incredible Years
Louisville, CO – 9/26/24 – After 18 remarkable years of serving the cycling community, The Pro’s Closet (TPC) will close its doors in October. Since our founding, we’ve had the privilege of helping over 160,000 customers find their perfect ride and have sold more than 46,000 bikes. It’s been a hell of a ride, and we couldn’t be more thankful to the customers, employees, and vendors who made this journey possible.
"This has been an extraordinary chapter in the world of cycling, and we’re incredibly grateful to everyone who has been a part of it," said Jonathan Czaja, CEO of The Pro’s Closet. "From our dedicated team to the loyal riders and industry partners, your support allowed us to grow and create a lasting impact. While this is the end of the road for TPC, as it operates today, we are proud of what we’ve accomplished together."
The Pro’s Closet began with a vision to make cycling more accessible by offering a better way to buy and sell used bikes while becoming the first true “certified pre-owned” bike offering in the cycling industry. Over the years, we’ve remained committed to providing exceptional service and spreading the joy of cycling. As we close this chapter, we reflect on the community we’ve built and the countless miles our customers have ridden.
Because at the end of the day, Bikes make it better—and we still believe, Bikes are meant to be used.
Excerpt from a Bike EU article:
HARD, Austria - Business has not always gone smoothly at Austria's second largest bicycle manufacturer, Simplon Fahrrad GmbH. How big these problems were, became public when the shareholders replaced the management at the end of 2023. This year's industry-wide double-digit sales drop left a real skid mark on Simplon's revenue, forcing them to apply for a Chapter 11 status this week to support the ongoing restructuring process.
No Park Tool T-handle wrenches at 75% off in that Pros Closet sell off. Dookie!
They bought EVERYTHING they were offered post-covid and had no one to sell it to the past 2 years, didn't they?
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