Serotta lays off 40% of workforce, planning shutdown

[CunegoFan]

Originally Posted by Charles M

You're very likely close...

DCG made agreements with 3 companies...

Serotta is just one of them and neither Blue or Madfibe are confirming that they are all set and rolling...

This could be a DCG thing more than a Serotta thing.

I think Blue had severe problems before entering the deal. I remember people complaining on Slowtwitch that they had ordered a Blue bike, expecting it to be delivered to their LBS before the start of the racing season, and deliveries were months late.

I would try to find a link but the stupidity of using a generic name like "Blue" in an age when people need to google for information makes it too much work.

[jr59]

Originally Posted by beeatnik

Someone has to be the most expensive.

Very true. but that same someone, needs to sell enough units, for enough profit, to keep the doors open.

That appears not to have happened in this case. To much overhead? OK, maybe, but who signed on for all that overhead? And who didn't change with the marketplace?

[slidey]

I don't think the problem is just the MeiVici, and I know that you didn't say it was either. I think its the entire approach of selling only superlative bikes which cater to the 1% of the biking world. Its alright for custom builders to do so as they usually operate out of their own backyard, or at least with a much smaller overhead and can also afford to spend the time to personalise this experience for the customer with little overhead on their end. It is nothing short of stupidity for a company the size of Serotta to attempt to take on the custom builders from within a bloated infrastructure. Its a fantastic ideology - to be the best, and sell the very best, but where everything falls apart is when it comes down to charging head and shoulders above the rest.

If one's customer base is the 1%, this implies that the companies revenues are also 1% of the industry total, which means that the allowable overheads can be around 1% as well, which translates to a backyard operation << a mid-sized one.
Of course, the figures here are not accurate but they represent the problem which Serotta have chosen to not address for a very long time.

Originally Posted by FlashUNC

For me, it all comes back to the Meivici as everything that was both great and terrible about Serotta.

A no-expense-sparted, top-of-the-line carbon frame that I'm sure was exquisitely manufactured and rode great.

How many people are buying $8,295 carbon frames and forks in this economy?

And given the competitive landscape, was it any better than something Mr Crumpton was turning out? Was it worth the nearly $3,000 more than a Crumpton SL road? Or $2,000 more than an Argonaut?

Or $1,200 more than a full 6.9 Trek Domane bike, with parts and wheels and stuff you could ride? Or $1,000 more than a fully-built Calfee Dragonfly?

The numbers just didn't work, and haven't for a long time.

[slidey]

The only talk of blame I saw from the parties concerned was from Ben Serotta in that note, which is now a sticky. That's what rubbed me the wrong way.

Originally Posted by shovelhd

Why does it always have to be about blame?

[T.J.]

Originally Posted by BumbleBeeDave

. . . that we simply don't know.

BBD

since when has that ever stopped anyone on a bike forum? shoot, apparently Chris Froome stuck the needle in with 45637 people in the room

[FlashUNC]

Originally Posted by slidey

I don't think the problem is just the MeiVici, and I know that you didn't say it was either. I think its the entire approach of selling only superlative bikes which cater to the 1% of the biking world. Its alright for custom builders to do so as they usually operate out of their own backyard, or at least with a much smaller overhead and can also afford to spend the time to personalise this experience for the customer with little overhead on their end. It is nothing short of stupidity for a company the size of Serotta to attempt to take on the custom builders from within a bloated infrastructure. Its a fantastic ideology - to be the best, and sell the very best, but where everything falls apart is when it comes down to charging head and shoulders above the rest.

If one's customer base is the 1%, this implies that the companies revenues are also 1% of the industry total, which means that the allowable overheads can be around 1% as well, which translates to a backyard operation << a mid-sized one.
Of course, the figures here are not accurate but they represent the problem which Serotta have chosen to not address for a very long time.

You've more eloquently stated my clumsily worded point. The bike was emblematic of everything that was both right and wrong about the company, but it's merely a symptom of the larger issue. Pursuit of the very best -- and producing a top notch product -- but at a price that many were unwilling to pay when other superlative options were out there for much less. Would Serottas have been worse if they ran, say, Enve forks instead of in-house carbon?

I can understand the mission -- and applaud it in fact -- but there also has to be some economic realities built into it as well.


But as an outsider, that

[J.Greene]

As I sit here enjoying this Twinkie I'm thinking there still may be a future with the name Serotta on the Downtube. All it takes is money, and there may be another person with some who is keen to unwisely invest in his hobby.

I wish the folks at Serotta all the best. For everyone in Saratoga this is very real and transcends nouns and verbs cheaply thrown around on the interwebs.

[Norm Swift]

Originally Posted by cinema

Good. we <3 u. long live serotta! waiting for my old one to show up in the tribute thread. it was an excellent beautiful omg red fierte with engraved 9sp veloce. wish i hadn't sold it.

Cinema,

It's still on the roads. You just motivated me to take a better photo than this low-res one from a few days ago and make the addition to the tribute thread.

[djg21]

SARATOGA SPRINGS — Serotta, the custom bike manufacturer, will close this month, but "our intention is to continue operations in Saratoga once a restructuring of the business is complete," Divine Cycling Group founder and manager Dan Devine told the Times Union on Thursday.
. . . .

The Serotta website, www.serotta.com, cited outsourcing of manufacturing to Asia as a major obstacle for American-made bicycles. But, "Serotta's DNA – its commitment to high quality, complete control and its American roots – left us no Asian option. We had to keep manufacturing our own bikes here, using parts we design and build ourselves."

http://www.timesunion.com/business/a...ys-4700263.php

[Charles M]

Guys,

The problem isn't that Serotta was larger than a back yard operation...

The problem wasn't offering stock bikes...

The problem wasn't carbon fiber...

And it's not a price point issue.


There is a larger market than some would think here for high end bikes... You have guys like Cervelo selling R5ca and there are a slew of people selling in the 5-8000 range or complete bikes for 10k+...



Parlee are pretty damn healthy. They're not small. And the line is out the door and around the block for the carbon Z Zero at $8k+... You also have Crumpton and Guru and Cyfac and Alchemy and Calfee and a dozen others (heck, Sarto build for a half dozen alone).


The "market collapse" that people mention has been very good for well run custom companies with controlled growth and reasonable expectations. It's been harder on others.

[BumbleBeeDave]

Originally Posted by djg21

http://www.timesunion.com/business/a...ys-4700263.php

. . . with about a million grains of salt.

BBD

[spierfalls]

Originally Posted by Chance

It’s mostly one and the same. The product is a reflection of the insane overhead – or should we say that overhead probably grew out of proportion due to the product’s design. Seems clear to me. Without the insane overhead Serotta can’t build the insanely expensive bike that “IS” presently Serotta. You can’t separate the two without talking about a totally different product that would not be what we know “today” as a Serotta bike.

Much of the Serotta design and quality mystique was based on utilizing manufacturing processes to shape tubes and other parts in a very custom way. That takes a lot of very expensive equipment, and higher-paid people to run them. Can we say “higher overhead”?

All the smaller one- or two-men shops I’ve visited purchase most of their materials nearly ready to be welded into a frame. They can fit the entire shop into a home garage because they don’t have tons of fancy equipment to do all kinds of machining.

“IF” Serotta goes back to welding standard tubes and using stock dropouts and so on so it can be manufactured in a very small space, would it still be the same Serotta bike? Would it ride the same? And how would it compare to a similar bike made in Asia for a fraction of the cost?

Granted it’s sad all around; particularly for the employees who will have to find new jobs. And for the older ones it may be much tougher yet. But the announcement shouldn’t come by surprise to anyone who has been reading the forum for years.

0

The multi million dollar facility in Saratoga Springs, with the fancy farmhouse was what I was referring to. The same Bikes could have been built in the low overhead shop in South Glens Falls. They had plenty of space, plenty of business without the huge mortgage every month. Maybe if the economy stayed strong, then the Saratoga plant would of worked out better, but obviously not the case.

[sfscott]

I bought my first Serotta around 2003. It was a Legend. At that time, I could tell you about Colorado Concept, ST dropouts, characteristic of the carbon fork etc. The point is that Serotta had a story to tell from a R&D and tech perspective, not just a racing legacy or "reputation for quality."

This continued with the Ottrot, and I bought one of those in 2008. Right after that, things changed with the Mevici. Oh sure, it was full custom carbon, which at the time was unique. But other than that, the brand stopped innovating, talking about what made it a special bike (at any price) and focused on the Porsche model of charging a lot to a few for elaborate cosmetic upgrades.

Whether you agree with such "innovations" as oversized BBs, tapered head tubes, different tube shapes as being worthwhile, other brands did, be it for marketing or actual performance. Serotta? Nada. They knew better than you what worked and what you want. Drilling for electronic gruppos? Nope, they are purists. Instead, they invested in their own carbon production because there could not be *any* possible supplier that was satisfactory? Toray in Japan that builds CF for Ferarri F1 cars? Nope, better to vertically integrate and charge more for it.

All the while, cycling in the US was in a Renaissance due to Lance Armstrong making the sport cool and an affluent boomer population looking for a new fitness option. Rather than make the brand accessible with some gateway models, Serotta cut back and raised prices. So that new rider looking to spend $3-$4k? Sorry, no soup for you.

Porsche saw the light even. They created models like the Boxster and Cayman that allowed a broader set of customers to buy into the brand..and then move them up to a 911 later.

Meanwhile, while no one was looking, Taiwan actually started to make some really good bikes. Many manufacturers had their own takes on frame design which could engage the consumer in a discussion and evaluation. They created price points to broaden the market. They expanded their sizing to enable better fits off of stock bikes. They created brand identities that appealed to many people, not just those who remember Lemonde, let alone Merckx and Coppi. Serotta in this period? Raise prices, offer the same frames and don't even operate a web store for swag.

What about fit, custom tube selection and aesthetics? Didn't Serotta always have that advantage? Well, maybe once. The FitCycle was an innovation. Now, what fitter doesn't use some combination of Specialized Body Geometry, Retul or other systems? You say those are all smoke and mirrors? Maybe, but the industry has moved on, more vendors are offering personalization if not customization.

So, with all those former competitive edges gone, you would think a company would evolve or shift strategy. How about focus on service? Why not be like the high-end clothing store that has less selection and higher prices than Nordstrom but gives the best service and goes the extra mile? They did not do that, either.

Instead, those few who valued the interaction with a builder went to Dario, Kirk, Kellogg or whomever. Those that wanted more faddish high-tech rides could get great stuff from mass production or shop IF, Crumpton, Guru or any other boutique. Don't like Asian manufacturing? Time and Look come right out of the Alps.

The point is that is you aren't getting better, you're getting worse. It took Ben about 8 years to figure that out.

I, like everyone, am saddened. Long hours on my Legend Ti gave me respite from a very difficult period in my life. I took pride in riding something cutting edge, special and coveted.

I bought a new bike last year. I wanted something with a new design, good fit, quality manufacturing and some panache. I bought a Colnago C59. I liked that one the best, but Ernesto had a nice range of frames to choose from, all with pretty great quality-even if from Asia. I could find a fit and certainly picked up a bike with a great pedigree and panache. It cost about $4K less than a Meivci.

We can lament the death of a friend and the people that friend's death impacted. The sad truth is that our friend smoked 5 packs of cigs a day, drank too much, ate every meal at McDonalds and never exercised. We should not be surprised that he dropped dead.

[firerescuefin]

One of the better takes I've seen on the subject.

Originally Posted by sfscott

I bought my first Serotta around 2003. It was a Legend. At that time, I could tell you about Colorado Concept, ST dropouts, characteristic of the carbon fork etc. The point is that Serotta had a story to tell from a R&D and tech perspective, not just a racing legacy or "reputation for quality."

This continued with the Ottrot, and I bought one of those in 2008. Right after that, things changed with the Mevici. Oh sure, it was full custom carbon, which at the time was unique. But other than that, the brand stopped innovating, talking about what made it a special bike (at any price) and focused on the Porsche model of charging a lot to a few for elaborate cosmetic upgrades.

Whether you agree with such "innovations" as oversized BBs, tapered head tubes, different tube shapes as being worthwhile, other brands did, be it for marketing or actual performance. Serotta? Nada. They knew better than you what worked and what you want. Drilling for electronic gruppos? Nope, they are purists. Instead, they invested in their own carbon production because there could not be *any* possible supplier that was satisfactory? Toray in Japan that builds CF for Ferarri F1 cars? Nope, better to vertically integrate and charge more for it.

All the while, cycling in the US was in a Renaissance due to Lance Armstrong making the sport cool and an affluent boomer population looking for a new fitness option. Rather than make the brand accessible with some gateway models, Serotta cut back and raised prices. So that new rider looking to spend $3-$4k? Sorry, no soup for you.

Porsche saw the light even. They created models like the Boxster and Cayman that allowed a broader set of customers to buy into the brand..and then move them up to a 911 later.

Meanwhile, while no one was looking, Taiwan actually started to make some really good bikes. Many manufacturers had their own takes on frame design which could engage the consumer in a discussion and evaluation. They created price points to broaden the market. They expanded their sizing to enable better fits off of stock bikes. They created brand identities that appealed to many people, not just those who remember Lemonde, let alone Merckx and Coppi. Serotta in this period? Raise prices, offer the same frames and don't even operate a web store for swag.

What about fit, custom tube selection and aesthetics? Didn't Serotta always have that advantage? Well, maybe once. The FitCycle was an innovation. Now, what fitter doesn't use some combination of Specialized Body Geometry, Retul or other systems? You say those are all smoke and mirrors? Maybe, but the industry has moved on, more vendors are offering personalization if not customization.

So, with all those former competitive edges gone, you would think a company would evolve or shift strategy. How about focus on service? Why not be like the high-end clothing store that has less selection and higher prices than Nordstrom but gives the best service and goes the extra mile? They did not do that, either.

Instead, those few who valued the interaction with a builder went to Dario, Kirk, Kellogg or whomever. Those that wanted more faddish high-tech rides could get great stuff from mass production or shop IF, Crumpton, Guru or any other boutique. Don't like Asian manufacturing? Time and Look come right out of the Alps.

The point is that is you aren't getting better, you're getting worse. It took Ben about 8 years to figure that out.

I, like everyone, am saddened. Long hours on my Legend Ti gave me respite from a very difficult period in my life. I took pride in riding something cutting edge, special and coveted.

I bought a new bike last year. I wanted something with a new design, good fit, quality manufacturing and some panache. I bought a Colnago C59. I liked that one the best, but Ernesto had a nice range of frames to choose from, all with pretty great quality-even if from Asia. I could find a fit and certainly picked up a bike with a great pedigree and panache. It cost about $4K less than a Meivci.

We can lament the death of a friend and the people that friend's death impacted. The sad truth is that our friend smoked 5 packs of cigs a day, drank too much, ate every meal at McDonalds and never exercised. We should not be surprised that he dropped dead.

[rnhood]

Originally Posted by firerescuefin

One of the better takes I've seen on the subject.

I agree, very well stated and I agree with "sfscott" 100%.