Will more companies be shutting down in the next 12-24 months?

boozed
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11/7/2024 3:49am

I'm not really sure where to put this – it isn't about a company going to the wall – but I think it's relevant to the industry's current situation.  One of the local suspension dealers has marked down its Flight Attendant Enduro Kits by 50-55%, meaning it now costs significantly less than putting a full set of plain "dumb" Ultimate level suspension on a bike.

5
pamtbr
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11/7/2024 5:25am

NUNSPEET, The Netherlands - Once claiming to be market leader in the Netherlands, e-bike brand Stella is on the verge of bankruptcy. Despite repeated financial injections from its owner DMEP, the manufacturer has now filed for a payment extension. According to DMEP, Stella can no longer achieve sustainable profitability in its current form and requires a "substantial" capital injection.

“the millions in losses were caused by a toxic mix of declining customer demand, rising costs, and increasing price competition" 

Peaked at €130 million, currently employs 400 people and sold 38,000 bikes last year.

 

3
11/7/2024 10:08am
ballz wrote:
FWIW if you go to Jenson and add the new 2025 Bronson CC frame to your cart, the check-out price is $600 less than what it...

FWIW if you go to Jenson and add the new 2025 Bronson CC frame to your cart, the check-out price is $600 less than what it is listed at. Silent discounts on new Santa Cruz models already?

Eae903 wrote:
Are you sure it's actually the CC frame? SC was going to be selling the C frames for the Bronson and Hightower due to the backlash...

Are you sure it's actually the CC frame? SC was going to be selling the C frames for the Bronson and Hightower due to the backlash over the CC not having cable routing for a derailleur. 

ballz wrote:

We shall see soon. AFAIK Santa Cruz doesn't sell non-CC frames as a frame-only option and hasn't for a while.

I think certain dealers can get C frames though. I got my 2023 5010 C as a frame only from Jenson last year.

2
Jotegr
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11/7/2024 1:28pm Edited Date/Time 11/7/2024 1:29pm

As seen on Bicycle Retailer, TPC is back after a 1 month hiatus..

Eae903 wrote:
Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/ Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with...

Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/

 

Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with no real turnover. 

Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5 Trek Slash 9.8 (gx eagle, carbon wheels, solid suspension, etc) for $3800 CAD, down from like $8,500 (through retailers and with margin for retailers in that, mind), people, and by extension TPC are welcome to think that their used bike is somehow worth more than that.  

You'd have to think the TPC guys are getting a cash infusion that will hold off on operating at whatever their capacity is until market stabilization, whenever that might be. 

I personally hope Deviate can hang on. Someone's gotta honour my lifetime warranty!

 

2
segamethod
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11/7/2024 1:42pm

Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume for discussion that this actually happens -- anyone care to conjecture what effect such a policy would have on this industry?

7
11/7/2024 1:52pm
segamethod wrote:
Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume...

Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume for discussion that this actually happens -- anyone care to conjecture what effect such a policy would have on this industry?

I think it'll reinvigorate the used market a bit, for sure. TPC is probably drooling about it as we type/read.

5
SteveClimber
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11/7/2024 2:10pm
segamethod wrote:
Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume...

Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume for discussion that this actually happens -- anyone care to conjecture what effect such a policy would have on this industry?

Very badly. 

Makes all imported frames and parts more expensive, passes on those costs to consumers. 

Frames and parts in the country are already discounted to sell, meaning they won't be ordering any more at a 10%+ increased price as they can't already move the cheaper ones. 

A universal tariff is a horrendous economic policy

21
11/7/2024 2:47pm
segamethod wrote:
Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume...

Not to be overtly political, but the US’s once and future president has indicated he intends to impose significant tariffs on foreign manufactured goods. Let’s assume for discussion that this actually happens -- anyone care to conjecture what effect such a policy would have on this industry?

Very badly. Makes all imported frames and parts more expensive, passes on those costs to consumers. Frames and parts in the country are already discounted to sell, meaning...

Very badly. 

Makes all imported frames and parts more expensive, passes on those costs to consumers. 

Frames and parts in the country are already discounted to sell, meaning they won't be ordering any more at a 10%+ increased price as they can't already move the cheaper ones. 

A universal tariff is a horrendous economic policy

As much as I like some Trump's ideas, his thoughts on tariffs are definitely off base. All they end doing raising prices for us the consumer. I might feel different if we had a US company making bike shop quality bikes in large numbers here in the USA,  but we don't 

7
brash
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11/7/2024 3:21pm

on the flipside, all those goods tarrifed to shit will need to go somewhere, smoking deals for the rest of the world.

Thanks Donny boy! 

10
boozed
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11/7/2024 10:59pm

As seen on Bicycle Retailer, TPC is back after a 1 month hiatus..

Eae903 wrote:
Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/ Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with...

Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/

 

Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with no real turnover. 

Jotegr wrote:
Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5...

Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5 Trek Slash 9.8 (gx eagle, carbon wheels, solid suspension, etc) for $3800 CAD, down from like $8,500 (through retailers and with margin for retailers in that, mind), people, and by extension TPC are welcome to think that their used bike is somehow worth more than that.  

You'd have to think the TPC guys are getting a cash infusion that will hold off on operating at whatever their capacity is until market stabilization, whenever that might be. 

I personally hope Deviate can hang on. Someone's gotta honour my lifetime warranty!

 

I heard from someone at Trek Australia that at their peak they had between 75,000 and 100,000 bikes sitting in their warehouses thanks to the oversupply.

2
11/8/2024 6:23am

I think a lot of people are underestimating the quantity of "in stock" bikes at certain companies

6
11/8/2024 7:10am

I think a lot of people are underestimating the quantity of "in stock" bikes at certain companies

Look at how long Specialized has had the Levos on sale..  it's been crazy..

3
Eoin
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11/8/2024 7:28am

I think a lot of people are underestimating the quantity of "in stock" bikes at certain companies

Look at how long Specialized has had the Levos on sale..  it's been crazy..

Not sure it is being discussed here, but word from many sources is that the next gen Levo has been ready for ages and they just keep pushing back the announcement due to the amount of unsold current gen stock.

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LePigPen
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11/8/2024 8:03am

Not shut down related but Canyon has a big ebike recall that should probly go on the home page. I don't want to paste the source but hopefully Spomer gets a PR email to post up later.

4
dolface
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11/8/2024 8:42am
LePigPen wrote:
Not shut down related but Canyon has a big ebike recall that should probly go on the home page. I don't want to paste the source...

Not shut down related but Canyon has a big ebike recall that should probly go on the home page. I don't want to paste the source but hopefully Spomer gets a PR email to post up later.

4
11/8/2024 8:45am
LePigPen wrote:
Not shut down related but Canyon has a big ebike recall that should probly go on the home page. I don't want to paste the source...

Not shut down related but Canyon has a big ebike recall that should probly go on the home page. I don't want to paste the source but hopefully Spomer gets a PR email to post up later.

dolface wrote:

Canyon e-bikes: so hot right now!

Wonder how REI feels about Canyon announcing a major recall right after their team-up... 

3
11/8/2024 8:47am
Eoin wrote:
Not sure it is being discussed here, but word from many sources is that the next gen Levo has been ready for ages and they just...

Not sure it is being discussed here, but word from many sources is that the next gen Levo has been ready for ages and they just keep pushing back the announcement due to the amount of unsold current gen stock.

I wonder how many other new models have been delayed? I expected to see this.. Or, the new product gets released,  but the product is still months out..I recall seeing that a few times already..

1
Eae903
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11/8/2024 8:50am
As much as I like some Trump's ideas, his thoughts on tariffs are definitely off base. All they end doing raising prices for us the consumer...

As much as I like some Trump's ideas, his thoughts on tariffs are definitely off base. All they end doing raising prices for us the consumer. I might feel different if we had a US company making bike shop quality bikes in large numbers here in the USA,  but we don't 

Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive really fast. Nothing wrong with wanting a strong self sufficient and independent economy and strong domestic manufacturing, honestly it's better that way, but a tarrif like that is putting the wagon before the horse. 

14
LePigPen
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11/8/2024 8:53am

We may need to make a separate thread for people who want to chew on politics... Unless there's some kind of off topic one already. I come here for bicycles. (And for sneak dissing Canyon whenever possible...)

2
1
Eae903
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11/8/2024 8:59am Edited Date/Time 11/8/2024 9:01am

I don't know if anyone's checked out Niner recently, but they have some insane discounts on their bikes right now, like close to 50% off. I thought the bankruptcy and purchase was supposed to help them get capital for R and D, doesn't look like it worked. 

https://www.ninerbikes.com/mountain/rip-9-rdo/

https://www.ninerbikes.com/wfo-9-rdo-4-star-shimano-xt/

1
11/8/2024 9:00am
Eae903 wrote:
Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive...

Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive really fast. Nothing wrong with wanting a strong self sufficient and independent economy and strong domestic manufacturing, honestly it's better that way, but a tarrif like that is putting the wagon before the horse. 

It's putting the contents of the wagon before the horse prior to the wagon even being built.

I hope the wagon can hold everything and has a bunch of different pockets for all the different things it'll need to train, tool up for, find real estate for, hire for, find investors for, and create new distribution chains for (before even getting a chance to learn what sorts of things it'll have to hold and how much room that stuff will take up).

4
TEAMROBOT
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11/8/2024 9:14am Edited Date/Time 11/8/2024 9:36am
Eae903 wrote:
Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive...

Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive really fast. Nothing wrong with wanting a strong self sufficient and independent economy and strong domestic manufacturing, honestly it's better that way, but a tarrif like that is putting the wagon before the horse. 

I'm one of those kooks who's a big fan of aggressive industrial policy to build up domestic industries, with the rapid growth and diversification of South Korea's industry in the 20th century as the classic textbook example, but yikes! Industrial policy is supposed to be a holistic thing, with taxes AND investment, and ideally the investment part comes BEFORE the taxes. Even in the case of South Korea the success story, it was pretty rough for a while! Like, decades. Buying a Hyundai car or Samsung refrigerator in 2024 is pretty great. But only being able to buy those products as a Korean resident... in 1974? Not so great.

One of my favorite descriptions of the post-Covid economic situation is of "the weird economy." It's been great for some people, terrible for others, great on average, but with wide disparities in impacts when you look at any specific industrial segment like housing, cars, construction, services, obviously bikes and the outdoor recreation industry in general. I was hoping things would get progressively less weird, but with the tariff thing and, you know, other stuff, I think it's gonna keep being weird for a while. If I'm an economic forecaster at Trek, Giant, or Specialized HQ right now... 

2021 and the Evolution of Business Planning - Belleview Consulting

I don't know if I'd tell the boss the truth that nobody knows, or come in real confident with my forecast and sound like I know what I'm talking about. Guess it depends on how much I trust my boss.

14
11/8/2024 12:09pm

Tariffs and manufacturing bikes the USA:
Last time Trump was in office, his tariffs on foreign made raw aluminum increased the price of domestically produced aluminum by 30% overnight.  It was a significant cost increase to manufacturing bikes in the USA.

Adding tariffs on complete bikes is a little different, but history has shown that increased import taxes (aka tariffs) increase costs for consumers and don't necessarily increase competitiveness for domestic manufacturing.  See above example.

My crystal ball says this about complete bike tariffs: if you increase the price of some things in the market, the price of all things will go up.  That's also called increased inflation.

15
ballz
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11/8/2024 12:59pm
Eae903 wrote:
Are you sure it's actually the CC frame? SC was going to be selling the C frames for the Bronson and Hightower due to the backlash...

Are you sure it's actually the CC frame? SC was going to be selling the C frames for the Bronson and Hightower due to the backlash over the CC not having cable routing for a derailleur. 

ballz wrote:

We shall see soon. AFAIK Santa Cruz doesn't sell non-CC frames as a frame-only option and hasn't for a while.

I think certain dealers can get C frames though. I got my 2023 5010 C as a frame only from Jenson last year.

Well, this one is a CC. The V1 Megatower is an itsy-bitsy teeny-weeny frame compared to this monster.

brash
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11/8/2024 1:46pm
Eae903 wrote:
Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/ Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with...

Yeah, absolutely crazy. https://escapecollective.com/the-pros-closet-is-back/

 

Honestly, I was hoping they would stay down. Having companies like this lead to a dramatically over valued used bike market, with no real turnover. 

Jotegr wrote:
Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5...

Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5 Trek Slash 9.8 (gx eagle, carbon wheels, solid suspension, etc) for $3800 CAD, down from like $8,500 (through retailers and with margin for retailers in that, mind), people, and by extension TPC are welcome to think that their used bike is somehow worth more than that.  

You'd have to think the TPC guys are getting a cash infusion that will hold off on operating at whatever their capacity is until market stabilization, whenever that might be. 

I personally hope Deviate can hang on. Someone's gotta honour my lifetime warranty!

 

boozed wrote:

I heard from someone at Trek Australia that at their peak they had between 75,000 and 100,000 bikes sitting in their warehouses thanks to the oversupply.

wtf, they thought 1 in 250 people in the whole of Australia was going to buy a trek mtb lol. Delusional.

 

7
SteveClimber
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11/8/2024 2:00pm Edited Date/Time 11/8/2024 2:02pm
Eae903 wrote:
Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive...

Generally speaking, imposing blanket tarrifs on imported goods without first investing significantly in domestic manufacturing is a really good way to make everything get really expensive really fast. Nothing wrong with wanting a strong self sufficient and independent economy and strong domestic manufacturing, honestly it's better that way, but a tarrif like that is putting the wagon before the horse. 

TEAMROBOT wrote:
I'm one of those kooks who's a big fan of aggressive industrial policy to build up domestic industries, with the rapid growth and diversification of South...

I'm one of those kooks who's a big fan of aggressive industrial policy to build up domestic industries, with the rapid growth and diversification of South Korea's industry in the 20th century as the classic textbook example, but yikes! Industrial policy is supposed to be a holistic thing, with taxes AND investment, and ideally the investment part comes BEFORE the taxes. Even in the case of South Korea the success story, it was pretty rough for a while! Like, decades. Buying a Hyundai car or Samsung refrigerator in 2024 is pretty great. But only being able to buy those products as a Korean resident... in 1974? Not so great.

One of my favorite descriptions of the post-Covid economic situation is of "the weird economy." It's been great for some people, terrible for others, great on average, but with wide disparities in impacts when you look at any specific industrial segment like housing, cars, construction, services, obviously bikes and the outdoor recreation industry in general. I was hoping things would get progressively less weird, but with the tariff thing and, you know, other stuff, I think it's gonna keep being weird for a while. If I'm an economic forecaster at Trek, Giant, or Specialized HQ right now... 

2021 and the Evolution of Business Planning - Belleview Consulting

I don't know if I'd tell the boss the truth that nobody knows, or come in real confident with my forecast and sound like I know what I'm talking about. Guess it depends on how much I trust my boss.

I think we all know universal tariffs will be universally bad, but the really interesting aspect is how America's truly believe their economy is in bad shape, when in reality is the envy of the told and by far the most successful over the last few years. 

If the tariffs come in hard and fast I definitely think it will push some companies over the edge, the bike companies are very precariously perched right now. Having to pay 10% extra on all Shimano/SRAM parts for OEM builds will be a massive burden, when we know the market will not tolerate price increases. 

I don't think the companies have the capital to order now and stock up before the tariffs hit to mitigate the damage 

 

For those interested in economics, this is a great piece of the tariffs applied to washer dryers in the US and how it achieved nothing (in fact it made it worse) https://www.apricitas.io/p/universal-tariffs-are-universally

17
11/8/2024 3:04pm
I think we all know universal tariffs will be universally bad, but the really interesting aspect is how America's truly believe their economy is in bad...

I think we all know universal tariffs will be universally bad, but the really interesting aspect is how America's truly believe their economy is in bad shape, when in reality is the envy of the told and by far the most successful over the last few years. 

If the tariffs come in hard and fast I definitely think it will push some companies over the edge, the bike companies are very precariously perched right now. Having to pay 10% extra on all Shimano/SRAM parts for OEM builds will be a massive burden, when we know the market will not tolerate price increases. 

I don't think the companies have the capital to order now and stock up before the tariffs hit to mitigate the damage 

 

For those interested in economics, this is a great piece of the tariffs applied to washer dryers in the US and how it achieved nothing (in fact it made it worse) https://www.apricitas.io/p/universal-tariffs-are-universally

"...the really interesting aspect is how America's truly believe their economy is in bad shape, when in reality is the envy of the [world] and by far the most successful over the last few years."

I've been yelling this at the top of my lungs to people around me. No one in my corner of the US would believe it or acknowledge it.

I THINK it's a short memory and a lack of A-to-C (and beyond) critical thinking. "It was really good and now it's worse?" They can understand that. But they can't understand "It was really good and now it's worse but much better than it could have been (and has been for many others) but also is poised to be back in a good position much sooner."

The destruction of the education system hasn't just been for funsies. It's because a lack of practice thinking critically leads to an electorate who puts a bandaid on roadrash thinking it'll heal up just fine but leaves the gravel in the wound because it hurts to dig it out.

Bringing it back to bikes:

All of that stiff is LITERALLY why I just hurried up and purchased a new bike on Nov 4th. It's a sick bike at a discounted price that I know I'll never see again. All of the components on it can be replaced with my current bike's components (aside from the hardtail vs fs shock stuff) so I have one complete turnover of the bike's parts. Was it exactly the bike I wanted? Not 100%. But it's a really sick bike, it's at a decent price, and I think companies are going to start raising even the discounted prices a little now in an effort to squirrel some cash into their pockets to absorb the price increases they'll have to front the money for in the near future.

Many US brands are going to be staring down the barrel of a further slowing economy with the majority of their supply chain getting instantly more expensive. That to me says we'll see more US-based brands closing and the brands in the rest of the world having less competition and growing. The US still hasn't recovered from the soybean tariffs but we refused to learn from that...and we're about to do that to how many of the pieces used the bike industry (and the rest of our lives)?

16
boozed
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AU
11/8/2024 3:23pm
Jotegr wrote:
Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5...

Yeah well, I know I'm a couple days late on this one but like Deviate pointed out... When Trek is dumping all sizes of Gen 5 Trek Slash 9.8 (gx eagle, carbon wheels, solid suspension, etc) for $3800 CAD, down from like $8,500 (through retailers and with margin for retailers in that, mind), people, and by extension TPC are welcome to think that their used bike is somehow worth more than that.  

You'd have to think the TPC guys are getting a cash infusion that will hold off on operating at whatever their capacity is until market stabilization, whenever that might be. 

I personally hope Deviate can hang on. Someone's gotta honour my lifetime warranty!

 

boozed wrote:

I heard from someone at Trek Australia that at their peak they had between 75,000 and 100,000 bikes sitting in their warehouses thanks to the oversupply.

brash wrote:

wtf, they thought 1 in 250 people in the whole of Australia was going to buy a trek mtb lol. Delusional.

 

To clarify, it was all types, not just MTBs, but I think your point still stands, more or less.

3

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