The Bikeconomics (Mega)Thread

sethimus wrote:

“premium“

chriskief wrote:

The founder and returning chief executive of German premium bike maker Canyon says he can raise annual revenue by a third to about €1bn within three...

The founder and returning chief executive of German premium bike maker Canyon says he can raise annual revenue by a third to about €1bn within three years, claiming that the company has lost direction because of changes in its culture.

https://www.ft.com/content/5b6e419e-cfd6-4950-9a1b-6337839c0cf2

chriskief wrote:

Lots of nuggets in this... €800mn valuation at acquisition in 2020, cut by 43% since then, €750mn annual sales in 2025, new line of "lightweight top-end...

Lots of nuggets in this... €800mn valuation at acquisition in 2020, cut by 43% since then, €750mn annual sales in 2025, new line of "lightweight top-end e-bikes at competitive prices" coming, killed off streetwear brand, reduced number of models, started selling in China, net losses in 2023 and 2024, more losses in first half of 2025, trying to get ebitda back up to 10% of sales, Arnold still owns 35% of company.

Good chance your company is in crisis if you're doing an interview with the FT and telling them you're definitely not in crisis.

j0lsrud wrote:

What defines a premium brand?

jeff.brines wrote:

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of...

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of inventory held throughout the industry, slowdown in sales and potential for consumers to be hitting the end of their "credit rope", will we see more companies in the industry hang it up for good?

I've long been skeptical of just how many capital intensive, high risk, low growth companies exist in the "specialty cycling" industry. To add, the number of very intelligent people figuring out how to make two wheels go down (or up) a dirt path better has lead to incredible gains from an enjoyment perspective, but is expensive and coming with fewer and fewer real world returns as we reach a plateau of sorts. 

So what will happen? Will there be room for the boutique manufacturers of _______ out there? Can a small operation make it work in a sea of competitors (with far more money)? 

I predicted 15 years ago we'd see a consolidation, similar to moto, but it never happened. Yes, the big players are doing "better than ever" (in quotes for a reason), but there are arguably just as many small time companies such as Reeb or up and coming companies such as WeAreOne. 

I want to be clear, this is not a hypothesis that the *industry* is in trouble. Its not. It'll be just fine. There are arguably more passionate mountain bikers in mountain biking now than any other point in history, so I feel strongly we'll continue to see the sport thrive. I'm just wondering about the competitors who don't *really* have some kind of moat (which is basically all of them).

I'm frankly not sure, but I do think it'll make for a good discussion. 

j0lsrud wrote:

What defines a premium brand?

sethimus wrote:

getting a bike that you dont need to build up yourself?

j0lsrud wrote:

If i buy the same Specialized twice, but on in a shop, and one shipped to my house and assemble my self. Will i then have...

If i buy the same Specialized twice, but on in a shop, and one shipped to my house and assemble my self. Will i then have one premium bike, and one unpremiun?

 

Now back to economics!

chriskief wrote:

The founder and returning chief executive of German premium bike maker Canyon says he can raise annual revenue by a third to about €1bn within three...

The founder and returning chief executive of German premium bike maker Canyon says he can raise annual revenue by a third to about €1bn within three years, claiming that the company has lost direction because of changes in its culture.

https://www.ft.com/content/5b6e419e-cfd6-4950-9a1b-6337839c0cf2

hamncheez2003 wrote:

"Premium" means that, despite the high price of your bike, it's still worth less than the car you rack it to.

jeff.brines wrote:

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of...

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of inventory held throughout the industry, slowdown in sales and potential for consumers to be hitting the end of their "credit rope", will we see more companies in the industry hang it up for good?

I've long been skeptical of just how many capital intensive, high risk, low growth companies exist in the "specialty cycling" industry. To add, the number of very intelligent people figuring out how to make two wheels go down (or up) a dirt path better has lead to incredible gains from an enjoyment perspective, but is expensive and coming with fewer and fewer real world returns as we reach a plateau of sorts. 

So what will happen? Will there be room for the boutique manufacturers of _______ out there? Can a small operation make it work in a sea of competitors (with far more money)? 

I predicted 15 years ago we'd see a consolidation, similar to moto, but it never happened. Yes, the big players are doing "better than ever" (in quotes for a reason), but there are arguably just as many small time companies such as Reeb or up and coming companies such as WeAreOne. 

I want to be clear, this is not a hypothesis that the *industry* is in trouble. Its not. It'll be just fine. There are arguably more passionate mountain bikers in mountain biking now than any other point in history, so I feel strongly we'll continue to see the sport thrive. I'm just wondering about the competitors who don't *really* have some kind of moat (which is basically all of them).

I'm frankly not sure, but I do think it'll make for a good discussion. 

Digit Bikes wrote:

Rein4ced, the European thermoplastic factory whose technology goals resemble Guerilla Gravity's declared bankruptcy and closing today. They'd worked with Focus, Ghost, Kellys...

Rein4ced, the European thermoplastic factory whose technology goals resemble Guerilla Gravity's declared bankruptcy and closing today. They'd worked with Focus, Ghost, Kellys, possibly others.

Here's a word salad of thoughts: Focus is Pon, Ghost is Accell, I'm not sure if Kellys has corporate overlords. Thermoplastics are perhaps still not ready for prime time. Reshoring to the West is hard. The robots failed to take over this time, or perhaps Asian robots were more efficient than these European robots.

bicycle019 wrote:

Looks like Endura is lettting people go amid rumor they are leaving Scotland.  They have made a big push in the US the last few years...

Looks like Endura is lettting people go amid rumor they are leaving Scotland.  They have made a big push in the US the last few years as the bigger technical cycling apparel players (PI, Specialized, Rapha) have struggled or are pulling the pin on the category.  

Multiple long-serving Endura employees announce redundancies amid reports troubled cycling apparel brand is “leaving Scotland” | road.cc

jeff.brines wrote:

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.Private equity is generally not structured to “swing and miss”...

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.

Private equity is generally not structured to “swing and miss” the way venture is. In a traditional buyout strategy, you’re underwriting to avoid permanent capital loss, even if you’re using leverage. That said, bankruptcies do happen. Depending on the dataset, the strategy (mega buyout vs middle market vs distressed), the industry mix, and the time period you measure, you’ll see something like mid single digits up to the teens as a reasonable range for bankruptcy outcomes across portfolios. The more “risk on” the underwriting and the more cyclical the sectors, the higher that number can go.

What happens to people internally varies a lot. If a deal blows up because of bad underwriting or avoidable operational mistakes, you can absolutely see turnover. But a bankruptcy doesn’t automatically mean heads roll. If the broader portfolio is performing, or if the loss is clearly tied to macro factors (rates, a recession, an industry shock), firms can largely move on. Firm size and politics matter too. When the key decision makers are the GPs themselves, they are rarely “fired” in any real sense. The real consequence is economic: unhappy LPs, reputational damage, and much lower (or zero) carried interest. They still collect management fees, but the wealth creation is supposed to come from the carry, and that’s what disappears when performance is weak.

The more important point is that bankruptcy is just the visible tail risk. The bigger story over the last few years is multiple compression and impaired equity returns even without formal insolvencies. There is a whole vintage of PE and VC funds that are underperforming because entry multiples were high and the cost of capital moved up dramatically. That change hits valuation in a very unforgiving way.

A simple example makes it obvious. If you bought a company at 12x EBITDA and later the market only pays 7x (which mirrors today), you need EBITDA to grow enough that: 

7x * (New EBITDA) = 12x * (Old EBITDA)

That implies EBITDA has to increase by about 71%, just to break even on enterprise value. And that is before transaction fees, integration costs, and the reality that not all EBITDA turns into cash. This is closer to what’s actually playing out than most people realize: even “good” companies can look mediocre when they were simply bought at the wrong price in the wrong rate regime.

So what’s the outcome? The asset class gets less attractive at the margin. Some LPs reduce allocations, some funds struggle to raise, certain shops shut down or consolidate, and eventually the market finds a new equilibrium through lower entry multiples, more conservative leverage, and (hopefully) better discipline on underwriting.

 

Anyone interested in the state of private equity, told through the lens of a (more) layman - this episode is excellent https://freakonomics.com/podcast/is-the-public-ready-for-private-equity/

 

 

jeff.brines wrote:

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.Private equity is generally not structured to “swing and miss”...

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.

Private equity is generally not structured to “swing and miss” the way venture is. In a traditional buyout strategy, you’re underwriting to avoid permanent capital loss, even if you’re using leverage. That said, bankruptcies do happen. Depending on the dataset, the strategy (mega buyout vs middle market vs distressed), the industry mix, and the time period you measure, you’ll see something like mid single digits up to the teens as a reasonable range for bankruptcy outcomes across portfolios. The more “risk on” the underwriting and the more cyclical the sectors, the higher that number can go.

What happens to people internally varies a lot. If a deal blows up because of bad underwriting or avoidable operational mistakes, you can absolutely see turnover. But a bankruptcy doesn’t automatically mean heads roll. If the broader portfolio is performing, or if the loss is clearly tied to macro factors (rates, a recession, an industry shock), firms can largely move on. Firm size and politics matter too. When the key decision makers are the GPs themselves, they are rarely “fired” in any real sense. The real consequence is economic: unhappy LPs, reputational damage, and much lower (or zero) carried interest. They still collect management fees, but the wealth creation is supposed to come from the carry, and that’s what disappears when performance is weak.

The more important point is that bankruptcy is just the visible tail risk. The bigger story over the last few years is multiple compression and impaired equity returns even without formal insolvencies. There is a whole vintage of PE and VC funds that are underperforming because entry multiples were high and the cost of capital moved up dramatically. That change hits valuation in a very unforgiving way.

A simple example makes it obvious. If you bought a company at 12x EBITDA and later the market only pays 7x (which mirrors today), you need EBITDA to grow enough that: 

7x * (New EBITDA) = 12x * (Old EBITDA)

That implies EBITDA has to increase by about 71%, just to break even on enterprise value. And that is before transaction fees, integration costs, and the reality that not all EBITDA turns into cash. This is closer to what’s actually playing out than most people realize: even “good” companies can look mediocre when they were simply bought at the wrong price in the wrong rate regime.

So what’s the outcome? The asset class gets less attractive at the margin. Some LPs reduce allocations, some funds struggle to raise, certain shops shut down or consolidate, and eventually the market finds a new equilibrium through lower entry multiples, more conservative leverage, and (hopefully) better discipline on underwriting.

 

Anyone interested in the state of private equity, told through the lens of a (more) layman - this episode is excellent https://freakonomics.com/podcast/is-the-public-ready-for-private-equity/

 

 

ebikepartyshirt wrote:

Well that completely clears that up. :|

jeff.brines wrote:

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.Private equity is generally not structured to “swing and miss”...

Super good question. The honest answer is: it depends, but we can frame it pretty cleanly.

Private equity is generally not structured to “swing and miss” the way venture is. In a traditional buyout strategy, you’re underwriting to avoid permanent capital loss, even if you’re using leverage. That said, bankruptcies do happen. Depending on the dataset, the strategy (mega buyout vs middle market vs distressed), the industry mix, and the time period you measure, you’ll see something like mid single digits up to the teens as a reasonable range for bankruptcy outcomes across portfolios. The more “risk on” the underwriting and the more cyclical the sectors, the higher that number can go.

What happens to people internally varies a lot. If a deal blows up because of bad underwriting or avoidable operational mistakes, you can absolutely see turnover. But a bankruptcy doesn’t automatically mean heads roll. If the broader portfolio is performing, or if the loss is clearly tied to macro factors (rates, a recession, an industry shock), firms can largely move on. Firm size and politics matter too. When the key decision makers are the GPs themselves, they are rarely “fired” in any real sense. The real consequence is economic: unhappy LPs, reputational damage, and much lower (or zero) carried interest. They still collect management fees, but the wealth creation is supposed to come from the carry, and that’s what disappears when performance is weak.

The more important point is that bankruptcy is just the visible tail risk. The bigger story over the last few years is multiple compression and impaired equity returns even without formal insolvencies. There is a whole vintage of PE and VC funds that are underperforming because entry multiples were high and the cost of capital moved up dramatically. That change hits valuation in a very unforgiving way.

A simple example makes it obvious. If you bought a company at 12x EBITDA and later the market only pays 7x (which mirrors today), you need EBITDA to grow enough that: 

7x * (New EBITDA) = 12x * (Old EBITDA)

That implies EBITDA has to increase by about 71%, just to break even on enterprise value. And that is before transaction fees, integration costs, and the reality that not all EBITDA turns into cash. This is closer to what’s actually playing out than most people realize: even “good” companies can look mediocre when they were simply bought at the wrong price in the wrong rate regime.

So what’s the outcome? The asset class gets less attractive at the margin. Some LPs reduce allocations, some funds struggle to raise, certain shops shut down or consolidate, and eventually the market finds a new equilibrium through lower entry multiples, more conservative leverage, and (hopefully) better discipline on underwriting.

 

Anyone interested in the state of private equity, told through the lens of a (more) layman - this episode is excellent https://freakonomics.com/podcast/is-the-public-ready-for-private-equity/

 

 

ebikepartyshirt wrote:

Well that completely clears that up. :|

Rhetti_2_Ride wrote:

Trek and QBP just had layoffs (again) today. This is the third time at Trek in the last 18 months and I believe at least the...

Trek and QBP just had layoffs (again) today. This is the third time at Trek in the last 18 months and I believe at least the second time at QBP since COVID. I just exited the bike industry myself (started a new job this week!), it’s definitely rough out there! 

Rhetti_2_Ride wrote:

Trek and QBP just had layoffs (again) today. This is the third time at Trek in the last 18 months and I believe at least the...

Trek and QBP just had layoffs (again) today. This is the third time at Trek in the last 18 months and I believe at least the second time at QBP since COVID. I just exited the bike industry myself (started a new job this week!), it’s definitely rough out there! 

jbfiets wrote:

is there a public announcement on this, or just knowing people who work there? I didn't see anything on Bicycleretailer.com or Trek's dealer website.

dolface wrote:

Yikes: Canyon to lay off up to 20% of its HQ staff 

dolface wrote:

Yikes: Canyon to lay off up to 20% of its HQ staff 

jeff.brines wrote:

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of...

With the "semi-official" announcement of Guerilla Gravity shutting down on the other site today (yes, I know, Vital had it a month ago), the glut of inventory held throughout the industry, slowdown in sales and potential for consumers to be hitting the end of their "credit rope", will we see more companies in the industry hang it up for good?

I've long been skeptical of just how many capital intensive, high risk, low growth companies exist in the "specialty cycling" industry. To add, the number of very intelligent people figuring out how to make two wheels go down (or up) a dirt path better has lead to incredible gains from an enjoyment perspective, but is expensive and coming with fewer and fewer real world returns as we reach a plateau of sorts. 

So what will happen? Will there be room for the boutique manufacturers of _______ out there? Can a small operation make it work in a sea of competitors (with far more money)? 

I predicted 15 years ago we'd see a consolidation, similar to moto, but it never happened. Yes, the big players are doing "better than ever" (in quotes for a reason), but there are arguably just as many small time companies such as Reeb or up and coming companies such as WeAreOne. 

I want to be clear, this is not a hypothesis that the *industry* is in trouble. Its not. It'll be just fine. There are arguably more passionate mountain bikers in mountain biking now than any other point in history, so I feel strongly we'll continue to see the sport thrive. I'm just wondering about the competitors who don't *really* have some kind of moat (which is basically all of them).

I'm frankly not sure, but I do think it'll make for a good discussion. 

Digit Bikes wrote:

Rein4ced, the European thermoplastic factory whose technology goals resemble Guerilla Gravity's declared bankruptcy and closing today. They'd worked with Focus, Ghost, Kellys...

Rein4ced, the European thermoplastic factory whose technology goals resemble Guerilla Gravity's declared bankruptcy and closing today. They'd worked with Focus, Ghost, Kellys, possibly others.

Here's a word salad of thoughts: Focus is Pon, Ghost is Accell, I'm not sure if Kellys has corporate overlords. Thermoplastics are perhaps still not ready for prime time. Reshoring to the West is hard. The robots failed to take over this time, or perhaps Asian robots were more efficient than these European robots.

Eae903 wrote:

This is the only place I can think of to ask about this. I just saw a marketing email from Evil about how they are teamed...

This is the only place I can think of to ask about this. I just saw a marketing email from Evil about how they are teamed up with a company that will allow you to pay for your bike using funds from an HSA or FSA if you're medically qualified. How would that work? How do you justify that kind of expense as a medical/health one? It's not like the ride to work schemes outside the US, it smells really fishy to me. 

 

Here's a link 

https://evil-bikes.com/pages/hsa