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I'd be interested in that analysis, both on it's own and in contrast to some of the brands that are on a less stable footing right now...
From what I can gather, almost all D2C and online fulfillment will eventually be consolidated into that massive warehouse in SLC they picked up roughly a year or so ago. Along with many other things like all warranties, wheel/suspension services, and their internal schooling.
As for all the well wishes…thank you. I’ve been turning wrenches for almost 20 years, and this is the first time I’ve had the rug pulled out from under me. I’ve already poked my head around locally and pinged some friends and things don’t look horribly bleak, so I got that going for me…which is nice.
Sorry... it always sucks. I don't believe in the silver lining bullshit stuff, but things will get better.
The only thing that sucks worse than working for a PE is working for a publicly traded company, we're reduced to numbers in quarterly SEC reports.
Link to blog post (too long to post here). I did this really fast and will clean it up in the morning. Long story short, Fox is in worse shape than I thought, but I do not believe they'll be the next Pierer Mobility or similar. In fact, this appears to be a case study in good management, with a team making adjustments as the underlying market dynamics move and shift.
As a side point, I wanted to contrast the company against others in the space or what we might call "good" but there really wasn't anything appropriate.
I'm confident they'll be around well into the future but am am not a buyer of the stock for a handful of reasons including broad consumer weakness, elasticity of their product mix and tariffs.
Hope that helps!
There was a mas exodus of competent staff to greener pastures/alternative industries over COVID because it was probably the worst time our lifetime to be a bike shop employee (in the sense that this is a 'lifestyle' industry and most competent people could be making more using their competencies elsewhere and COVID sucked 95% of the fun and perks away). While the industry is still 'down', I'd have to think an experienced wrench could get picked up without too much issues these days in anticipation of service and general spring recovery. In my locale almost all the seasoned vets are now doing something else. I'm sure you'll manage to find something and hopefully in a week or two so you can enjoy some enforced paid time off before starting somewhere new.
Finally found time to give the post the attention it deserved, thank you for taking the time to research and write it.
Are the two items below why profits dropped almost 100% (from $116.8M to $6.7M y/y)? That seems like a crazy decline...
Powersports and automotive saw a pullback in top line; automotive appears to be a problem child atm.
The company is eating some charges related to some restructuring/other matters that is hurting (but not completely killing) profitability.
Good read as always Jeff 👍
Ta
It looks like Wrench Science is closing their doors - https://www.bicycleretailer.com/retail-news/2025/02/08/suppliers-wary-wrench-science-informs-them-closure
I've never purchased anything from them, but when I was younger and dreamed about custom building a really nice new MTB, I always enjoyed experimenting on their website. My dream is to basically be what they (and others like Fanatik) are - someone who helps people build cool/custom bikes for a living. Definitely a bummer to see places like that not make it.
This is correct. We’ll get more clarity when they report FY earnings in a few weeks, but restructuring-related charges have impacted profitability significantly. However, since these are one-time expenses, they’re not as concerning as they might seem.
Wall Street typically overlooks one-time events—whether positive or negative—unless they’re significant enough to threaten the company’s viability. After all, in theory, a company’s stock price reflects the net present value of all future cash flows discounted to today.
That said, the stock has taken a substantial hit over the past year (or really 2). I unpacked the main drivers to this in my blog post, but the TL;DR is the company is not as strong as it once was. The main catalyst for this really isn't COVID or mismanagement of inventory however. Its higher rates, softening consumer spending, and (from what I can tell) a tough automotive market.
Lets see what Q4 brings!
More layoffs at Outside, coinciding w/ the purchase of https://www.bicycleretailer.com/announcements/2025/02/06/outside-intera…
not sure why insta embed isn't working, so here's screenshot and text of caption. bummer for staff there : ( the "outdoor vertical experts" paragraph is gross.
caption - The parent company of @outsidemagazine has laid off 20 members of the magazine’s editorial and business staffs, leaving doubt about the ongoing viability of the publication in print and online. The news came in a companywide email last Thursday from CEO Robin Thurston announcing the purchase of Inntopia, travel booking software used by Vail, Alterra Mountain Company, and others. Employees affected by the mass firing said one print editor and three online editors remain. Those who lost their jobs include longtime top editor Chris Keyes, thirty-year veteran and head of sustainability Kristin Hostetter, and brand director Mary Turner.
Robin Thurston did not respond directly to a request for comment, but a member of Outside’s external public relations firm emailed this statement:
“With the acquisition of Inntopia, we decided to restructure some of our editorial team to allow our outdoor vertical experts to own their categories across the entire platform. Focusing on categories like Snow, Cycling, Hiking + Camping, Wellness, MTB, Tri/Run, Climbing, and Food + Fitness enables our content creators to contribute their expertise across our portfolio and grow critical areas of audience engagement like video, mapping, and our activity feed platform. Our editorial team across all of the Outside Inc. brands remains one of our largest groups of full-time employees, in addition to freelancers and contributors who support our beloved content and storytelling. Last week’s layoffs impacted 20 individuals across the Editorial, Product, Marketing, Sales, and Finance teams, eight of which were local to Colorado.”
Thurston did comment to A Media Operator, which covers online publishing. He said, “Many people come to our properties, they want to know where to go, right? They want to know what to do. If we write a story about the top five ski resorts in North America, we don’t guide you after that into the travel booking. We just kind of say, ‘Hey, here’s some great information from a travel writer, good luck on your own, go find how to book that. Go find the ski instructor. Go figure out how to buy tickets.’”
Backed by venture capital, Thurston’s Pocket Media bought three divisions from Active Interest Media in 2020 (including Backpacker, SKI, Climbing, and other titles) and then purchased Outside from longtime owner Larry Burke in 2021. It also bought Pinkbike, Gaia mapping service, and numerous outdoor-recreation publications. Since then, it has funneled editorial content into subscription-based Outside+ and gone through two previous rounds of major layoffs.
This recent round of layoffs has left employees reeling. Those we spoke to were granted anonymity to speak candidly. Many are negotiating their severance; the one offered by the company was “weak,” said one.
Positions that were eliminated include the vice president and general manager of Outdoors, the VP of data and analytics, senior brand director, editor in chief, head of sustainability, managing editor, three senior editors, two associate editors, assistant editor, senior photo editor, and group creative director. Other business side layoffs include the director of sales operations, director of SEO, associate director, technical ad ops, social media analyst, and digital production senior manager.
I wonder how long we will be left on the grandfathered cheaper Trailforks subscription...
100% just officially announced they will be discontinuing their Helmet and Protectives lines.... in a letter sent to their dealers this AM
Shimano released earnings today and continues to churn along "doing just fine". No surprise. https://www.bicycleretailer.com/international/2025/02/12/shimano-2024-s…
I heard rumors that they were doing some sketchy stuff, in the end, to stay in business, which is unfortunate. I too was a grom that thought Wrench Science was sick.
In regards to Outside- this is why i now pay for Escape Collective(which has a lot of the old cycling tips folks). The media landscape has changed and for the amount of media i consume, I want it to be good well-written content. I boycott outside as much as I can. Sent them a nasty email once Trailforks was purchased. Outside is just a data company now; they no longer care about good media or journalism.
Little bit late to respond here but thanks for writing this up! I think its good for people to be somewhat informed on how stable these companies are - from the outside it can appear like a company is crushing it but behind the scenes is in chaos and that makes it even harder when they appear to fall out of the blue. The Fox stuff isn't surprising - there has been a big shift in spending on high end product so its reassuring that they seem to have pivoted to deal with that and I think its a good thing they aren't trying to make completely new products every few years.
Conversely it appears like shimano is doing just fine by being the "boring" company and not rushing to bring out the latest and greatest - they may make some missteps here and there but over the long term it seems to serve them well
Kinda crazy, I thought that would be a substantial part of their revenue. What are they now? A goggles company?
Goggles and clothes maybe ?
99% goggles and clothes the rest
If you look at their history, they started out with a crazy minimalist line of t-shirts and stickers…basically just a brand for the sake of a brand. The eyewear is what took them into the mainstream. The helmet and protection line never really grabbed a substantial market share, so while this may seem like a drastic cutback, it’s actually aligned with their core strength I would think.
Yea, I agree. Back to their strength. T-shirts and Stickers.
No diffirent than ford saying no to sedans. If you have a good market share in the high margin space why bother with the low margin space.
Low margin and high cost of liability insurance to be in the protection space especially helmets. Not so much with clothes and eyewear.
Fully agree. We'll see how 2025 pans out, but 2024 seems to be at the trendline of pre-covid era growth, with the added revenue that those years brought in. I'm curious about how much they're putting into R&D on the cycling business, because as you say, their product line continues quite boring, and gladly so
Hopefully still a Brisker gloves company.
Oh shit I have to go out and buy 3-4 pairs of briskers like right now following this announcement. Thanks for reminding me!
Shimano is the bike industry equivalent to a '95-2000 Toyota Camry.
My other car is a Saint Derailleur
Glad I scooped a Trajecta full face for $80 shipped last year
RIP deals
We are really guessing about Commencal without seeing their books. I get the feeling they are doing just fine, overall. I do agree they aren't quiet as good of a deal as they were a handful of years ago. I do feel its hard to parse how much of an impact inflation really has had across brands like Commencal. $5,500 for a top tier spec bike feels somehow less as good of a deal compared to to 2020 when the same bike might have been $4,500, but inflation tells that entire story. I also looked into foreign exchange as possible rationale, but the dollar is relatively stronger, not weaker, so that's not it.
In any case, here is a google search trends of the big brands over time. I don't feel Commencal has fallen off all that much.
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