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So I am certainly not retained by the shop (will sue people for bikes), nothing he told me raised a flag to an extent that I thought they had a legal dispute on their hands, at least not at this point - although like you, I am not a bankruptcy expert. It seems that Rocky is operating under the control of an appointed creditor (although it could be a bank who is not a creditor who has been appointed, I haven't checked). They ARE blowing out some models, seemingly in Canada only so far, but not blowing out anything that is a current or new platform. This means there's great deals to be had on the various ebikes, slayers, and blizzards primarily - in excess of what's shown on bikes.com.
It is an interesting strategy though. At- or near- full price instincts and new-platform altitudes seem like a tough sell now that consumer confidence in the brand is rightfully shaken. Does it seem like a more viable long-term strategy to not (yet) start blowing out newer stuff? I can't imagine that's what they're thinking, they're trying to recover as much on their dollar as they can, but one would expect an "everything must go" fire sale in this situation, or at least meeting consumers in the middle with enough of an incentive to get them in the door on the newer platforms. It might be coming, this is early days as far as both the creditor protection proceedings and the season goes.
Edit: Great to see a rocky employee here saying hopefully shipping on warranty stuff will resume. Let's work on getting that consumer confidence back up for one of Canada's favourite brands.
Picked up a Fury for $2000 at Philbricks in Dover NH. That’s their cash price, but they’re doing $2450 for credit/debit. Free shipping in the lower 48 too. She bought a bunch of the Elites. All sizes when I was there 2 weeks ago.
On the topic of WAO - does anyone have any insight on why the frame business (the Arrival) was ultimately not successful? As far as I was concerned the frames received very good reviews from a number of sites, it was made completely in house so WAO had complete control plus NA manufacturing, and it sold at a pretty high msrp (maybe not high enough?). They even recycled the front triangle for a couple different travel numbers for the bike. The only reason I didn't go ahead with a purchase was because of the superboost rear end (I did not want another standard in my garage, but that's just me), but I'm curious to hear some of your thoughts as why they axed the project now.
Well, I have seen discussions of it also having something to do that when they produce a frame - They become a OEM competitor. If they dont produce one, they might be able to sell wheels to OEM's for full builds. (Just something I read in some forum somwhere, cant remember where)
But, most likely since pricing has been discussed. It seems like the Arrival frames were priced at similar prices to other manufacturers framesets - Around $4k (Santa Cruz, Rocky Mountain, Yeti) etc. Same price, but produced in Canada, probably makes their profit on the frames way worse. I belive their price was without a shock though, so say a few hundred $ more profit.
Your point about being a potential competitor to other frame manufacturers (when it comes to OEM wheel spec) isn't invalid, but I agree it's likely pretty far from their biggest reason for cutting off frames. I worked for a boutique bike brand (eventually as a product manager) when the Arrival 152 was in full swing launch/marketing - lots of guys there, including myself, ran WR1 wheels on their personal bikes. When the time came and we began looking at new carbon wheel spec options, WR1 should have been a prime candidate (if we ignored weight, which wasn't something the brand was likely to ignore), but there was concern over the fact that they were also a frame competitor and we went elsewhere. Thankfully, I9's non-S series carbon rims are made by WR1, so we ended up getting the quality carbon wheels we wanted without the perceived conflict of interest and higher wheelset weight.
Still, I would always recommend their wheels as a high quality and cost-effective aftermarket carbon wheel upgrade to friends and customers. The team over there has been great and have my full support - including the Convergence series wheelset that just went on my new Sentinel.
Based on what I've heard from WR1 on podcasts, along with what I've experienced in the throws of the COVID and post-COVID industry, keeping up with the sale pricing of other companies is tough - especially when you don't personally have the "need" to. Not everybody was straight up overstocked coming out of the COVID demand spike (or maybe it was limited to a few select parts, SKU's, etc), but when your competitors all of a sudden start to slash prices and take a strong competitive advantage there, you have to respond in order to keep the money flowing in to run your operation and continue turning inventory, even if you don't necessarily have the same overstock issue.
However, WR1 was in a unique position. My opinion/understanding is that the Arrival was a passion project that they wanted to work out as a legitimate business expansion, and it seems to me like they very much succeeded in making a competitive, attractive, quality bike. That said, my belief is that the business was always being sustained by wheelset sales, not complete bikes. So, when they theoretically had to begin running sales on their premium, higher production cost product just to move inventory, it likely was a big hit to their ability to justify making more frames. That's not to mention the cost/effort of having to stock all of the high end components to build these bikes when they offered completes. Just my two cents!
Awesome deals in Europe. Just snatched a LaBomba with 60% discount.
Summing up what Dustin said in a Vital podcast, while they learned a lot from making the frame, the labor and work involved to make a finished frame that was up to their standards was so expensive that they were not really making any money from them. Even for what they were selling them for, which is why they were trying to sell them as rolling chassis, to make money from the components they make. They were going to put that extra production time into other projects.
Given that Dustin sounds like someone with their mind on growth and end product quality, its pretty in line with that and not just pumping stuff out in volume to make money.
Being on the shop side of the Rocky situation, customers seem pretty confident in the products still, it hasn't slowed down sales and they're still stoked on the brand despite what's happening. Good to heard the shipping situation is sorted, I know the shop I'm at was fortunate to get around it the other week but it would be stressful to have that happen in the middle of the current situation.
Also on the shop side, the Rocky paint shop has blown so many customers out of the water that were worries they were going to get a generic color frame, only to have their Hyper Yellow/Dark purple Slayer delivered back to them looking like nothing ever happened.
So the Arrival was like the Lexus LFA of the bike world. I can respect that.
Honestly I don't think GT is going to go away entirely. I would bet that they re launch the brand in 2026, with a stripped down more focused MTB lineup.
Not entirely bicycle related but… it seems KTM is in dire straits, it’s been discussed here before but $2.3bn!? I’m no financial wiz but uh, I don’t know how they dig out from this hole.
https://www.rideapart.com/news/748489/ktm-insolvency-creditors-2-billio…
doesnt KTM have massive stock though?
Who will want to buy any of if knowing the company might not survive past August?
Yeah thats the precise problem. They can't sell the stock they have.
The issue is they may be forced to sell the stock at a loss, as it will result in a smaller loss then not selling it at all. Either way it's goodnight for them
I did a pretty thorough analysis on the company and their options a few months back. You can see what I wrote on my blog here.
Since this post, a few major changes have occurred including...
Chapter 11: KTM entered into the European version of Chapter 11. This gave the company 90 days (ending February 25th 2025) to figure out how they might restructure things while the creditors wait on the shores. This is an important "pause" while management figures out what to do.
Reducing Costs: This one is obvious, but the company has implemented drastic cost-cutting measures which includes layoffs, production cuts, and reducing operating expense.
Excess Inventory: This is a problem but not "the" problem. To my point, if they sold through all inventory on their balance sheet, all their capital and financing problems still exist.
Divesting in Non Core Assets: While it hasn't happened, the company is exploring the sale of Felt and X-Bow.
Debt Restructuring: This is the big one. They need to figure out how to pay back 30% of their debt in 2 years to avert insolvency. Looks like creditors are aiming to claw back more than that 30% number and employees have been stiffed to the tune of $12M. LAME KTM.
New Capital: The company has received new capital injections from existing investors. I honestly didn't look to see how much and if this has gone through, but the big important thing here is the current investors have the means and they appear interested in keeping the company afloat. A quick glance appeared that this was in the form of convertible debt, which is a good instrument for both parties IMO, but I didn't go deep.
New Management: There is a new CEO (or co-CEO) in place through this period.
What I expect to see happen here is either someone completely takes them out, and they go private with entirely new owners or they are able to actually make arrangements to continue chipping away and making the existing corporate structure work. What I would expect is a different KTM to emerge out of this. As to what that looks like, I'll let y'all speculate, but I know what I'd do if they hired me as a consultant. This is a perfect fit for my background in finance, technology, CFOing, operations and "two wheeled fun".
On that note, if anyone knows anyone at KTM management, give them my contact
PS - One other thing we might see is deep discounts on 2024 KTM motorcycles that still haven't sold (and 25s). Those interested, keep your eyes peeled - I know they were discounted heavily in the fall, and I don't see this letting up.
PPS - i don't expect to see KTM go away.
The deep discounting started on leftover '23 models in early '24, at least in my area. One of the local dealers had 250 and 300 XCWs for like $2,500-$3,000 off MSRP. Just checked their inventory and it looks like they moved most of their '24 models. The few they have remaining all say "call for price" so they really must be ready to wheel and deal on those. Too bad it's nothing I want! Should have scooped up a 300 when I had the chance.
I am sure there will be more 300 XC and XCW models going on closeout. It still remains a really good time to buy a new KTM, but a crap time to sell a new or used one. I am keeping my 350 and 300 for a long time
I don't think KTM is going anywhere, but it will be changing a lot. I think I saw that minority owner Bajaj is putting in an offer to buy the majority stake. Bajaj has been building quite a few of KTMs models like the Duke and such if I understand properly.
Where do you see Bajaj putting in an offer to buy a majority interest in the company? I don't see this.
I do agree the KTM we knew is going to change substantially with respect to capex, racing, model releases etc. They honestly made a lot (lot) of bad mistakes while seemingly forgetting how they really make money and where their real strengths lie.
It seems to me their facing the same issues as the bicycle industry only on a scale that is orders of magnitude bigger. Ramp up production during Covid time, average Joe who’s had his eye on a moto finally gets the ok from the Mrs to buy one, guys that didn’t get one during that time were either not on a financial footing to be able to or weren’t ever going to…
I would also venture to guess there are a fair few more motos being sold on credit, and average Joe who bought his during that time is either -still happy with it - not riding it since he went back to work - or just now paying the thing off. Rates go up demand goes down, and the company has already dove head first into all time high production. So many moving parts it’s like trying to stop an avalanche. Hindsight being what it is there is no doubt they made their bed 4-5 years ago…
DID THE WHEELS COME OFF THE KTM DEAL? - Dealernews
Maybe I read the article incorrectly
Terrible journalism work here. They grabbed what is on the IR page from the company, which is to be trusted. However, as far as Bajaj taking over, that seems entirely speculative. I have looked high and low and see no indication this is in fact happening. Doesn't mean it won't, but I'd put that firmly in the "rumor" category right now.
Yeah, I took the article at face value. Then when you asked where it came from, I did a simple search for more info or corroboration and found nothing. I think at best it is a rumor at this time.
Here is some less gloomy news from Sweden: https://www.vitalmtb.com/news/press-release/new-beginnings-ohlins-racings-mountain-bike-segment-under-brembos-ownership.
"More new releases are in the pipeline for 2025"
reading between the lines of this statement and the recent launch of the rfx36m3, i'm presuming some of their other forks will be getting the m3 treatment as well.
KTM isn't going anywhere.
KTM USA is a separate, and profitable business. But beyond that the brand name has incredible equity. Someone will absolutely be building and selling KTMs into the future.
Saying KTM will be gone is like saying GM will be gone after they filed BK in '99. Ain't going to happen.
KTM USA may be a seperate subsidiary but they are fully reliant on Peirer Mobility to operate. While I agree its unlikely KTM does in fact "go away", I've watched enough of these restructuring/bankrupty/insolvency events to know its unlikely the KTM that emerges out of this is the "same" KTM. Now, to counter what I just said, its unlikely any buyer or any change torches all the IP and underlying DNA of the bikes, but the rate of change, emphasis on racing (at a high dollar amount) etc may in fact change.
You might see KTM do something more akin to the other moto companies where they amortize their vehicle costs across longer periods of time. I don't think we can overlook the RMATV/Tusk effect on the business model, either. KTM is not able to monetize the aftermarket/parts side like the once were able to...
How is Yeti doing? Seems they would have had some marketing out ahead of the UCI rider info if things were going well.
When I was demoing a bike at the factory in Golden, Colorado (more of a size fit check) November 1st of 2024, all of their assembly stations except one were staffed and they were looking to hire a mechanic immediately to fill that empty station. Plus the offices near the front had staff and a few staff in the showroom to sort out demo ride folks.
I don't know what that says other than in November they weren't panicking about the number of folks on payroll. They're currently still selling all their newest model year stuff at full price. They had the last of the previous year's colors at a discount (which is how I got my sb120...no way would I pay their full asking price even if it's the nicest bike I've ridden) but all of the current stuff is at full price.
KTM isn't going anywhere but what continent they will be manufactured on remains a question.
A bunch of teams including Atherton, Mondraker, Pivot, Dunbar etc got caught out by the UCI rider rankings being updated on the 28th so I wouldn’t read anything into it.
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