Serotta lays off 40% of workforce, planning shutdown

[eddief]

puts Steve Rex decals on his bikes. Maybe a tweak for Serotta would be to evolve to bikes that say Ben Serotta on the downtube. It does have a nice ring to it. Ka-ching!

[tiretrax]

Sad news.

ATMO, a big part of the problem is marketing. The brand got associated with Freds (I always heard dentists and orthodontists), but the bikes are some of the best out there. It seemed that as overhead grew, the prices got very high. There was more competitionfrom boutique builders working out of a garage with much lower overhead, and the tended to be young, hip, and developed a cult-like following, partially through social media, which Serotta did not master.

I would bet in a blind comparison, a Serotta would be as like (if not more so) than any bike from Portland, Steamboat, or Watertown.

I hope Ben picks up his torch and emulates his alumni and the young guns. The new bikes look fantastic.

[nm87710]

Current Serotta financial issues and layoffs have nothing to do with DCG. This has been brewing for a long time and it doesn't take a rocket scientist or MBA to understand what's up. Serotta is failing all on it's own do to a lack of sales revenue and expensive production/fixed costs. You don't just wake up one morning and realize you need to layoff 40% of your staff. That's a clear sign of a failed business model operating on hope rather than good leadership with a viable business plan.

[rounder]

Good luck to Ben et al. Love my Serotta bikes. Hope I never have to sell them.

[pbarry]

Originally Posted by texbike

As part of the MBA-conducted post mortem on Serotta, it would be interesting to do a compare/contrast with one of the other medium-sized brands like Moots and understand why Moots continued its meteoric rise, brand recognition, and loyal following while Serotta stumbled?Texbike

Be careful of starry eyed romantic notions of the bike business, it's like any other. Some are wildly successful, riding a trend. Others prosper with lower costs due to lower overhead. Still others succeed for decades by finding a successful niche and providing excellent customer service. A few are supported by founders/owners with large wallets who just like what they do regardless of the bottom line.

Moots has not had a meteoric rise. Kent Eriksen founded the company in 1981. They had a number of unique MTB products in the early days like a fork with two sets of fork ends, that gave effectively different rakes/fork lengths for 26 and 700c wheels. And Moots Mounts, that allowed infinite vertical adjustment of cantilever bosses. Very cool stuff, but they were a very small, yet respected, brand back in the day.

More recognition and sales resulted with Ti models and the YBB suspension. Company was sold to someone with deeper pockets, and the "new Moots" is what you see currently. Who knows if Moots actually makes any money.

Merlin had 5 employees until they adopted a corporate structure and secured venture capital in 1989. One of the founders was a DuPont trust-funder. AFAIK, they were never in the black, even when shipping 2,400 frames a year, which lead to the ABG merger and eventual demise of the brand.

Like others have mentioned, if Ben can make another go, small and simple with a complete re-think, Serottas will be available again.

Go forth and prosper all involved at Saratoga and Poway!

[I Want Sachs?]

Very sad news!

I would find it hard to buy Serotta bikes in the future, with the baggage of what it has been.

If I was offered a bike name Serotta build by Joe Star Welder with Ben at the helm, or a David Kirk or Kelly Beford all at similar price, I would find it hard to pass on the latter two and take the first one. Heck, even if Ben the torcher built the bike, I would not take it over Kirk or Bedford.

[pbarry]

Originally Posted by I Want Sachs?

Very sad news!

I would find it hard to buy Serotta bikes in the future, with the baggage of what it has been.

If I was offered a bike name Serotta build by Joe Star Welder with Ben at the helm, or a David Kirk or Kelly Beford all at similar price, I would find it hard to pass on the latter two and take the first one. Heck, even if Ben the torcher built the bike, I would not take it over Kirk or Bedford.

Sorry, your first sentence does not square with the rest of your post..

[crupshaw]

Sad news. If anyone bought a 59cm Pronto and ends up not wanting it for whatever reason, let me know.

[Jgrooms]

Originally Posted by akelman

Awesome first post! Welcome to the forum, sunshine!

Thanks brother! Unfortunately US 'higher' education cranks out useless MBas by the thousands. "Yes you too can earn this valuable 'experience' two nights a week....'" Sorry I've high jacked, but yes I've got another bunch of bean counters telling me how to run my product to some formula. Go get some glue and sticks kiddo and come back when you can make it work.

[cinema]

Originally Posted by Jgrooms

Thanks brother! Unfortunately US 'higher' education cranks out useless MBas by the thousands. "Yes you too can earn this valuable 'experience' two nights a week....'" Sorry I've high jacked, but yes I've got another bunch of bean counters telling me how to run my product to some formula. Go get some glue and sticks kiddo and come back when you can make it work.

the bikeforums.net migration is strong with this one.

please keep it decent here guys. no need for

[Jgrooms]

Originally Posted by cinema

the bikeforums.net migration is strong with this one.

please keep it decent here guys. no need for

Never been there, but i catch your drift otherwise :-)

[Chance]

Originally Posted by spierfalls

Ben will rise again. He needs to rent a small space, start building bikes with a few faithful employees and business will boom. Insane overhead is what killed the brand not the products themselves. They build awesome bikes and everyone knows it. For sure when the dust clears, Ben will come out of this back on top. I'm sure of it. This whole situation might of been the best thing for Serotta Competition Cycles to get back on their feet under the supervision of their founder.

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.

[cinema]

Originally Posted by Jgrooms

Never been there, but i catch your drift otherwise :-)

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.

[don compton]

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.

Didn't they buy the conically shaped seat and down tubes from the Reynolds?

[shovelhd]

Originally Posted by BumbleBeeDave

This IMO.

BBD

Remember that 40% of that insane overhead is now on the unemployment line.