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4th of July weekend Scategories with the extended family. Letter "R" and "Things that make you laugh."
Answer: "Rivian trucks." Rest of the family was getting ready to dispute, but my Dad was already laughing. I got my point.
Therw as one of the bigger mail order companies that had an in house bike brand and the rumors were that they would order bikes with the cheapest steel frames they could buy but set-up with top shelf parts.. When the bikes got here, they stripped the bikes and tossed the frames..
A former employer of mine would buy a good amount of closeout bikes, and when it came down to some sizes that didn't sell, they would strip the bikes and sell all the parts at a deep discount.. I never did a breakdown, but he probably made more money than he did selling the bikes as completes..
One more story.. When I was at Marzocchi, one of pur biggest customers was selling Shivers for about dealer price.. Didn't take long for my emails to go crazy.. The boss went online and bought one. We ran the serial number and found out which factory it was sold to and which brand of bike it was supposed to be on. I then had to make a not so fun phone call to the customer.. They found someone who was buying the over stock from the factories in Taiwan and selling them to anyone willing to buy.. Normally, those forks would go back to Marzocchi Asia. Factory owners would sell them to people like that and make a few extra bucks.. This is known as gray market.. Legit products, just not obtained through the regular channels..
I bought alot of Shimano stuff from Aliexpress (XT shifter and derailler for $80, br7120 brakeset for $150 ect) and it would always come bubble wrapped and in a plain cardboard box. I always figured it came out of some factory in some guys lunchbox Johnny Cash style.
I know how you feel. The first ever ebikes I picked up for the wife and I were Yamaha's. Then they dropped out of the American market. Then we picked up a couple Vitus bikes. Love the bikes but then they closed too. So then I picked up a Decoy SN and the wife got a Decoy MX. Now they are doing this. It make me not want to buy another bike to keep from cursing another company!
Get a Speshy ebike for yourself and a Trek ebike for the lady and REALLY test the universe...
Sounds like Death Note for bikes only works if they buy a pair.
sounds like products were getting to market with a more sensible price tag.
Im not going to complain at all.
p.s Commencal have heaps of extra stuff on their webstore for their 'A LA Carte' and its often considerably cheaper than retail.(you can buy it separately.)
e.g fox 36 factory, 1400nzd at commencal but official price is approx 2249nzd.
I bought a lyrik fork, maxxis tires, and pedals from jenson a few months back and the pedals were the only thing in real packaging. As others are pointing out the bike industry has a lot of parts to move at the moment, the fork and tires I got sounded like they were destined for complete bikes for some brand but the demand just wasn't there.
It's when thry get elevated to Thought Leader
I didnt put it in the original post just to see the reactions haha
https://www.rczbikeshop.com/ Here it is. But there are some catches, the real deals are sent via email, at the bottom there is a subscribe button but they must either confirm each one manually or have set a long delay due to the demand as a friend said few days ago he had to wait for several months before he started receiving emails. And a second thing, shipping is really expensive... (not long ago I ordered a pair of 35€ shoes and paid 20€ for shipping)
also, they don’t deduct the sales tax when shipping outside the EU and when you order they don’t ship them out directly but only several weeks later when they sold all product, probably drop shipping. afaik they buy up unsold OEM inventory for cheap. use-elitebikes from austria has a similar business model
3 full Shimano drivetrains and 3 sets of XT brakes sitting on my bikes right now all from grey market eBay. They don't appear fake, but it doesn't even matter if they are since they weigh the same and perform the same. (got 2,000 mi out of a Deore 11sp cassette with minimal maintenance)
Dude looks like a Steve-O that made better choices
It wouldn't surprise me if there are more gray market parts floating around lately... Everyone is struggling to get paid right now..
As someone, loosely, affiliated with the Bentonville Mill, we've been assured that things will go on as normal Stateside. I'm not sure how exactly that works when the parent company is in trouble regardless of which company they're operating from, but I'm hoping that's how it plays out.
I bought a fox dropper and tires from Jensen one time and they came unpackaged. The tires were white letter maxxis so I know they were OEM.
I tried to order a fox float x for $75 and was informed they didn't ship to the USA. I was disappointed because they seem to have good deals if you have the patience.
Use a forwarder…
https://www.forward2me.com
Quick, finger-in-the-wind take:
Timing: They sold at the absolute peak. The bike industry was booming, and the broader financial world was drunk on cheap capital. People were taking wild risks (ask me how I know).
EBITDA vs Earnings: Most PE guys I know price deals off EBITDA, not net income, which makes back-of-the-napkin math tricky (because we don't have that number). If net earnings were EUR2M, I’d peg EBITDA around EUR6M, though that’d mean an ugly 8.5% margin. More likely, if they were doing 15% EBITDA margins (still conservative for D2C bikes), that’s EUR10.5M EBITDA.
Apply a 10x multiple and you get a EUR100M enterprise value.
But… they had EUR72M in shareholder loans at close. If nearly 100% of the company was sold, that implies a EUR28M equity value.
Some research I've found suggest part of the debt was “tied to the founder,” hinting he may have been leveraging the company for personal borrowing. Speculative, but notable.
More to come in a full blog post. I’m going (to try to) go deep.
A business like YT with minimal differentiation on scaling COGs (it's virtually all vendor negotiation with no owned assets) to reduce expense will trade at 5-7X EBITDA for a capital partner right now. A strategic who is veritcal on the COG side may push this to 6-8 because they have more levers to pull.
PE still has a lot of capital to deploy but for this business they probably only want to do 2-3 turns for debt ($20-30M) for an acquisition.
I see zero signs of excessive personal spending which may or may not have been funded by company debt.
Some good analysis here and I'm grateful for everyone's insights.
One thing I have not seen discussed is the race team, according to the UCI site it's a factory team (owned by YT) but unsure if it's a separate entity and therefore not directly impacted? Obviously there will be an impact as YT is the company financing the race team, but wonder if it's 'otherwise business as usual ' for the team.
I repeat... zero signs.
This is so lame. The CEO equivalent of athletes posting #freeshitbro posts on IG. COOL DUDE
Louis Vuitton carbon fibre? Why can't I massively overpay for a bike with that? Come on bike manufacturers!!!
I'm not sure YT would even be valued at a 5-7X EBITDA now. Though it wasn't that long ago, the multiples being given to "high growth D2C" businesses in 2021 was next level. My finger in the wind guess of 10x seemed in the ballpark, and this research report does back this up (though I've never cited or read them before 😬).
...Camping and Hiking targets led M&A pricing, with an average multiple of 12.6x EV/EBITDA from 2017 to the year-to-date 2023. The Sporting Goods segment followed with an average multiple of 10.8x EV/EBITDA, then Tactical & Hunting with 10.2x; Outdoor Power Sports at 8.9x and Boating & Watercraft at 7.2x.
Fun fact, if anyone remembers Solo Brands (portfolio of D2C companies), they were trading at something like $800 in 2021 and are now at $25. Ouch. While this is probably a bit dramatic, it does a great job showing how interest was high in D2C companies during a pandemic when money was free and how poorly these businesses really performed relative to price being paid and how little interest there is in them now.
Lets also not forget how drunk people were in the private funds world in 2020-2022 and how much more sobriety and austerity there is now.
Wait, so you will not be staying tuned? 🤣
The Flossman definitely be flossin'
Didn't PE buy majority share? Or no? And Markus was brought back in as CEO?
Unless I'm missing other sources for his personal income, of course, I don't see how this dude's ENTIRE persona is double fisted red flags on fire waving around. Unless it's one of those deals where every single thing is fake/rented/staged to give off that perception. Which is STILL two red flags waving just they are not on fire this time...
I feel like finding a CEO who did nothing could somehow be better than what this guy is doing to this company. How much benefit can you even add to offset all the weirdness lol...
Holy moly that is nuts. 96% drop in 5y.
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