Serotta lays off 40% of workforce, planning shutdown
 

Serotta lays off 40% of workforce, planning shutdown

by Steve Frothingham / Bicycle Retailer

CEO says "funds never came" after merger with Blue and Mad Fiber
SARATOGA SPRINGS, NY (BRAIN) — Serotta has laid off 40 percent of its workforce and is planning to shut down production in the next two weeks, CEO Bill Watkins told BRAIN on Wednesday.

The company was recently merged with Blue Competition Cycles and Mad Fiber Wheels to become part of the Divine Cycling Group. At the time of the merger, DCG said the combined brands would be better able to attract investment and pool resources. However Watkins said the merger did not result in any immediate increase in funding, forcing him to lay off eight or nine employees on July 19.

DCG officials and company founder Ben Serotta were not immediately available to comment.

Mad Fiber spokesman Jasen Thorpe told BRAIN on Tuesday that production was continuing at the wheel company and there had been no layoffs there. Blue Competition CEO Steven Harad was not immediately available to comment.

Watkins said Serotta's bike builders were working to complete orders.

"We still have a core group of craftsman still producing bikes, but we are not accepting orders. I'm anticipating a shut down in two weeks. I do not know if that will be temporary or permanent while the owners figure out what to do," he said. "I'm working to build out the runway and land this airplane gracefully and professionally."

"(DCG) have not invested any capital that was required to consummate the merger, and to fuel the plans that each of the three companies had at time the merger was being discussed. Ben (Serotta) and I disclosed what we were doing, they bought into plan and said, 'go for it' and we did the plan ... but the funds never came. We got official notification last week that the funds would not be coming."

Prior to joining Serotta last fall, Watkins was a consultant with Bradway Capital, an investment group that bought an interest in Serotta in May 2012. Watkins said he did not have any equity in Serotta or DCG.

yes I just tried to get information so I could order a new Pronto, was informed by my LBS who retails Serotta that they are not currently taking new orders. how unfortunate!

Sad.

A sad day.

I predict 5+ pages on this thread.


Definitely a sad day.

RIP Serotta. Seems the 'Divine Cycling Group' nonsense was just that, nonsense -- they had no funding, and were hoping to combine the brands to get it. Terrible.

What a bummer...a renaissance that will never come.

wholly crap
 

what a terrible american biz debacle. can you say "ibis"? a great case to be studied by a good MBA candidate. wow.

I had heard from a couple of people that layoff's started earlier than this but this is the first confirmation I've seen.

I'm hoping that Blue and Madfiber are not in a similar situation but then they were in different situations than Serotta going into negotiating.

Hopefully those that sent deposits for new bikes will get the money returned.
If they go brankrupt...slim chance of getting any money.

All hail the Specialized/Trek oligopoly.

Sad.

Hoping my pronto is part of the bikes still being built...

Whoops - I see my comment was just repeating what eddief said.

"We still have a core group of craftsman still producing bikes, but we are not accepting orders. I'm anticipating a shut down in two weeks. I do not know if that will be temporary or permanent while the owners figure out what to do," he said. "I'm working to build out the runway and land this airplane gracefully and professionally."


Bill Watkins is a class act.

one thing is for sure, Serotta employed some fine people over the years, then and now. perhaps we'll see some f'builders strike out on their own from this situation, and carry on the skills they learned under the big S.

sad news, hope it all works out for those involved.

Ditto, very sorry to hear.

This just pisses me off.

Was Rustylion blindsided or...?

This is really sad, but could sorta see this coming. The bike biz is a tough nut to crack. When I had a bike shop, I also had a auto repair shop...Guess where I made my income.
Hopefully they can turn this around some how. I always thought Serotta should have just stayed with steel and Ti, which they were known for and had a affordable tig steel frame they would have faired well. I still have one of there first Legend Ti (1993) and IMO still as good as anything out there. When they tried to compete with all carbon frames at such a high price there was just to much competition. Just my thoughts.

SB

2009 doesn't seem all that far away...

http://www.pezcyclingnews.com/page/t...spec/?id=88924

http://www.pezcyclingnews.com/photos...creensaver.jpg

Who owns the name Serotta?

I sure hope Ben does. It's the only thing left...

Very unfortunate. The Serotta name has been such a presence on the American famebuilding scene, and losing that saddnes me even though I have never owned one. Diversity and dedication to the craft are good things, and losing some of that is sad for us all.

Maybe they could sell the name to the guys who own Motobecane, Tommaso, etc.

I'm definitely not surprised that this is happening, but it does suck.

Texbike

The timeline from Bradway to DCG would be interesting to hear. How much of that move was giving up vs. having insufficient capital to deliver the plan? If Bradway had the money would they have spent it for the projections they were seeing? Doing a deal with a company that does not deliver the money suggests a weak hand somewhere and in this case probably on both sides.

Small business is both the backbone of jobs in America AND ferociously risky. We should thank our lucky stars every day for the people crazy enough to take those chances. And as hard as it is to succeed, it's even harder to keep succeeding after the early energy and momentum have dissipated.

Huge sympathy for the Serotta workers who turned out a great product and won't get to keep doing that after months and years of worry that exactly this unwinding was in the cards.

I'm quite surprised by this news, since Ben's blog post last week about the Pronto sounded very optimistic:

http://serotta.com/launching-the-pronto-part-2/

I'm sitting here thinking "I've had 6 bikes from Serotta and or people that came through there...

It just seems so INCREDIBLY weird.

I don't know too many nicer people than Ben and his wife.

It's been nothing but my pleasure in every contact I've had.

After the dust settles, I may go pitch this very idea to some faculty here. I'd enjoy (sort of) writing the case study.


Nick, I was thinking this very thing. The frame building industry does not have high barriers to entry (relatively) for individuals with the skill. I hope we see some new frame builders out of this, and that former serotta fans patronize them.




+1

Limited ediition indeed:

http://serotta.com/limited-edition-s...now-available/

Sad
 

Crazy news. :(

Lot's of promises. So little delivery. I've had a couple of Serotta's in my day too. Sad to see the company go through what it did and become what it became.

I think this would make a good case. Has all the things to make it interesting and useful for a bunch of classes...marketing, corporate communications, supply chain, strategy (e.g. judo strategy), operations, probably even managerial accounting.

Sad indeed. I love my Serotta. But the older I get the more I tend to think that a nice bike is just a nice bike, whether it be brand x, y or z. Maybe that's where they went wrong, what with insane pricing, myriad options and all.

What a rollercoaster... I can only imagine the ups and downs. Must be so freaking emotionally draining to all involved.

I just got a late nineties CSi and could not be more appreciative of the high quality of Serotta's workmanship. Hopefully there'd be a way?

So sad. Sucks for me and all of us, but even more so for all the employees. I can't ever imagine getting rid of my CSi. Still the bike I ride the most.

What I wonder though is what the company will become. Hard to believe the name will completely go away. Someone will buy it, but then is it really a Serotta... and for that matter has it been for awhile? Hopefully Ben can find a way to make sure the legacy lives on, but real hard to imagine that happening at this time. Seems more likely to just find some Serotta stickers on a Taiwan mass produced carbon bike.

Oh well. Hope the employees get taken care of as well as possible.

Does this mean I can buy a MeiVici SG at close out price?

I'm not sure what will happen to the name, but the legacy lives on. Dave Kirk, Kelly Bedford and others... All those bikes out there that people are riding.

I agree Matt, but am just a little worried that the name will be bought and slapped on some lower quality frames, thus diminishing that legacy. I would rather see the name disappear. Luckily there are now many wonderful smaller frame builders, many of which got some time with the Serotta crew.

I am very sad.

I had been working with the company recently in a very limited capacity but was excited to see a way forward. Then after the merger was announced and the work stopped, I figured something was up.

Serotta has been a big part of my recent cycling life. When I broke my neck/back and was laid up for nearly a year many moons ago, I came across the old Gary (Kahuna) forum and discovered the brand. While still unable to ride, I bought my first frame (an Atlanta), built it up and fell in lust. Through the Atlanta to the CSi to the Concours to the new LaCorsa to the Atlanta again to another Atlanta again and finally a CIII for the wife, I have been a proud Serottan and will continue to be.

Ben is a legend. Bill Watkins is a class act. I wish them and all those in Saratoga Springs, Poway and elsewhere nothing but the best.

Whatever happens to the company, I wish the people who are and have been a part of it well. They all deserve a safe landing, and more. My Serotta has given me more happiness, pleasure, and health, than ANYTHING else I've ever spent money on.