Pinarello to be bought by LVMH

[1centaur]

Not sure this is a wise move:

http://www.cyclingnews.com/news/louis-vuitton-set-to-buy-pinarello/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+cyclingnews%2Fnews+%28Cycling news%3A+News+%29

[echelon_john]

What the actual f!,(

[godfrey1112000]

:hello:

[Lovetoclimb]

Ok now I really want to see an F8 painted in the famous LV livery!

[oldpotatoe]

Not sure this is a wise move:

http://www.cyclingnews.com/news/louis-vuitton-set-to-buy-pinarello/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+cyclingnews%2Fnews+%28Cycling news%3A+News+%29

I wonder about Gita, Pinarello importer in the US. They used to import DeRosa and Merckx also, until sales/holders/buyers had these go away also..W/O Pinarello, Gita is with Pegoretti alone..

[Cicli]

My luggage will match my bike:hello:

Or, you can get a fake to match a fake. :bike:

[godfrey1112000]

Or, you can get a fake to match a fake. :bike:

😱🎱

[jr59]

Not sure this is a wise move:



http://www.cyclingnews.com/news/louis-vuitton-set-to-buy-pinarello/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+cyclingnews%2Fnews+%28Cycling news%3A+News+%29



Why? This group has shown in most cases, the ability to let the companies stay almost the same. They own a lot of different high end brands. More than a few watch brands that basically have stayed the same since being bought.


Sent from my iPhone using Tapatalk

[1centaur]

Why? This group has shown in most cases, the ability to let the companies stay almost the same. They own a lot of different high end brands. More than a few watch brands that basically have stayed the same since being bought.




While I could easily be wrong, my skepticism is based on the following:

1) Pinarello is not just a high-end brand. They have lots of mid-level bikes in the mix that may pay the bills. I don't perceive LVMH as having brands that lean on their mid-scale. Does that mean Pinarello phases out the mid-scale or do they try to push it up? Or do they keep them but just add a need for greater profit to pay for image marketing across the company, which would tend to drag up mid-scale prices? I don't see high-end watch brands having this mix problem.

2) When has "luxury brand" ever been what most high-end bike buyers wanted? How many of us ride Porsche bikes? High-end bike buyers are looking for the latest and greatest technology as ridden by the pros and brand names have given buyers some assurance that they were getting that. LVMH not only does not imply that story, it detracts from that story to the extent its advertising message feels like "luxe brand" rather than best bike.

3) Pinarello is already priced very high vs. the serious high-end competition, to a level that causes many to question why and if they are just paying for an Italian heritage name on generic Asian stuff. It's reasonable to wonder if LVMH would raise prices in conjunction with an image-based campaign. It would be better if there were room to raise prices before going over the edge of credibility.

4) What do luxe marketers see that Pinarello missed in building its business over the last few years? I am reminded of the PE firm that bought Chrysler from Mercedes, imagining they could extract value that apparently Mercedes did not see. When experts sell to neophytes, it does not always go well.

As with Serotta in its last few years, we can all speculate about the inner workings of a company we do not know, as well as the motivations of buyers who are not showing their hand. We can all be completely wrong. Or not, which is what makes the speculation fun.

[jr59]

While I could easily be wrong, my skepticism is based on the following:

1) Pinarello is not just a high-end brand. They have lots of mid-level bikes in the mix that may pay the bills. I don't perceive LVMH as having brands that lean on their mid-scale. Does that mean Pinarello phases out the mid-scale or do they try to push it up? Or do they keep them but just add a need for greater profit to pay for image marketing across the company, which would tend to drag up mid-scale prices? I don't see high-end watch brands having this mix problem.

2) When has "luxury brand" ever been what most high-end bike buyers wanted? How many of us ride Porsche bikes? High-end bike buyers are looking for the latest and greatest technology as ridden by the pros and brand names have given buyers some assurance that they were getting that. LVMH not only does not imply that story, it detracts from that story to the extent its advertising message feels like "luxe brand" rather than best bike.

3) Pinarello is already priced very high vs. the serious high-end competition, to a level that causes many to question why and if they are just paying for an Italian heritage name on generic Asian stuff. It's reasonable to wonder if LVMH would raise prices in conjunction with an image-based campaign. It would be better if there were room to raise prices before going over the edge of credibility.

4) What do luxe marketers see that Pinarello missed in building its business over the last few years? I am reminded of the PE firm that bought Chrysler from Mercedes, imagining they could extract value that apparently Mercedes did not see. When experts sell to neophytes, it does not always go well.

As with Serotta in its last few years, we can all speculate about the inner workings of a company we do not know, as well as the motivations of buyers who are not showing their hand. We can all be completely wrong. Or not, which is what makes the speculation fun.

No offense meant, but I think you need to look into what LVHM has done with the other companies it has bought in the last 15 years or so.

Granted I do not understand their business plan, but historically the companies have not changed all that much, from a customer stand point. You calling LVHM a neophyte is simply not so. Not in what they do, which is very high end stuff.

Time will tell.

[RedRider]

I wonder about Gita, Pinarello importer in the US. They used to import DeRosa and Merckx also, until sales/holders/buyers had these go away also..W/O Pinarello, Gita is with Pegoretti alone..

Gita = Giordana. The LVMH purchase does not necessarily mean they will change distributors. There has been a history of "designer" bikes; Gucci, Channel, Fendi as well as Louis Vuitton...
We'll see what happens but it's not necessarily a bad thing...

[sandyrs]

They also own Moet. Will the newest Pinarello TT bike include an integrated champagne bladder? Where can I preorder one?

[54ny77]

Kardashian would be proud.

http://velojoy.com/wp-content/uploads/2013/10/LVBikeSaddle.jpg

http://velojoy.com/wp-content/uploads/2013/10/LVBars.jpg

[kittytrail]

mmmm... i'd say LVMH usually does have quite meticulously calculated plans for any brand they buy. these plans might very well involve the chinese market now that PR of China really gets on the cycling map.

[guido]

Bling is bling.

[wheelhouse]

Or, you can get a fake to match a fake. :bike:

I'll get my next bike from Mary Pong at the swap meet. :cool:

[goonster]

You calling LVHM a neophyte is simply not so.

They are a neophyte to the bike business.

You tell me. What LVMH brand is even remotely analogous to Pinarello?

When organizations have a long, successful track record of doing one kind of thing, I do not see that as a guarantee for success doing other things. I see a recipe for hubris.

My prognosis: midrange models go away, prices for everything else go up, retail moves to Pinarello boutiques, marketing staff and budget quintuple.

[MattTuck]

Interesting. LVMH owns luxury lifestyle brands. I would not think that a bike would fit into that category. They do own some watch brands (like Tag Heuer and Zenith and Hublot), that would probably be most similar in terms of the 'performance' branding.

But really, a bicycle is not a luxury item in the same way an expensive tie, or perfume, or a glass of Dom Perignon is. Almost anything else in their portfolio can be bought and used by anyone. perfume, scotch, wine, clothes, fashion, etc. By owning and using the product, you have attached yourself to the luxury lifestyle. You can drink your $150 bottle of wine, believing (even if you don't have the pallet to tell the difference) that it is better than cheaper wines, because price is a strong signal in the market.

On a bike, you can own the best bike out there, but still get passed by a guy on a Scattante frame, who is devoted to cycling. Cycling is the great equalizer. It is a meritocracy. Even if the bike comes with a ready supply of EPO and inhalers, you cannot buy a 'luxury' bicycle. The term 'luxury bicycle' is an oxymoron -- in my opinion.

So, I agree with the above that find this a little strange.

[torquer]

Kardashian would be proud.

http://velojoy.com/wp-content/uploads/2013/10/LVBikeSaddle.jpg

http://velojoy.com/wp-content/uploads/2013/10/LVBars.jpg

Shimano (and 7700, at that)???
Obviously a Canal Street knock-off..
Even after the jewelry heist, Ms. K should be able to afford the real deal.
Maybe this will work for her followers, however.

[velotrack]

Fwiw, 7800. ^

[chiasticon]

But really, a bicycle is not a luxury item in the same way an expensive tie, or perfume, or a glass of Dom Perignon is. Almost anything else in their portfolio can be bought and used by anyone. perfume, scotch, wine, clothes, fashion, etc. By owning and using the product, you have attached yourself to the luxury lifestyle. You can drink your $150 bottle of wine, believing (even if you don't have the pallet to tell the difference) that it is better than cheaper wines, because price is a strong signal in the market. while this is true, I think that high end bikes are absolutely luxury items/status symbols to some people. and similarly, many who purchase them lack the background to know whether or not they're indeed better than the cheaper competition. if you have the money for a $10k bike, you get a $10k bike. having it be a luxury level brand/halo bike is certainly desirable to such purchasers. true, not everyone that wants a Dogma or an S-Works McClaren falls into this category, but some absolutely do.

[jr59]

They are a neophyte to the bike business.

You tell me. What LVMH brand is even remotely analogous to Pinarello?

When organizations have a long, successful track record of doing one kind of thing, I do not see that as a guarantee for success doing other things. I see a recipe for hubris.

My prognosis: midrange models go away, prices for everything else go up, retail moves to Pinarello boutiques, marketing staff and budget quintuple.

Pretty simple. Tag! Their mid priced models did not go away! They have tried to upgrade their top end.

Since when is having marketing a bad thing? Isn't that what they sponsor team Sky for?

This organization does Many things,NOT just one thing. Again a bit of research would help your argument.

[sonicCows]

*

[goonster]

Their mid priced models did not go away!

What do you mean by "did?" The sale has not been finalized.

Since when is having marketing a bad thing?

It's a bad thing when it (very successfully) creates an alternate reality in which a $48,000 handbag (http://us.louisvuitton.com/eng-us/products/capucines-mm-crocodilien-mat-007727) is rational.

[PQJ]

I've never been a Pinarello fan. Now, even less so. If I'm going with big box Italian bike manufacturer, it's Colnago or nothing.

[RedRider]

With the exception of a pure commuter or commercial vehicle, all bicycles are luxury, lifestyle goods. They are marketed and sold a such.
What can a "bicycle industry outsider" that has been extremely successful managing brands offer Pinarello?
When was the last time you saw Louis Vuitton on sale?

[jr59]

What do you mean by "did?" The sale has not been finalized.

Speaking of Tag watches.


It's a bad thing when it (very successfully) creates an alternate reality in which a $48,000 handbag (http://us.louisvuitton.com/eng-us/products/capucines-mm-crocodilien-mat-007727) is rational.

.

[jr59]

With the exception of a pure commuter or commercial vehicle, all bicycles are luxury, lifestyle goods. They are marketed and sold a such.
What can a "bicycle industry outsider" that has been extremely successful managing brands offer Pinarello?
When was the last time you saw Louis Vuitton on sale?


Indeed, but don't let facts get in the way!

[thirdgenbird]

What do you mean by "did?" The sale has not been finalized.

The Tag sale? every reference I have found lists 1999.

[mistermo]

Kardashian would be proud.

http://velojoy.com/wp-content/uploads/2013/10/LVBikeSaddle.jpg

http://velojoy.com/wp-content/uploads/2013/10/LVBars.jpg

Shimano (and 7700, at that)???
Obviously a Canal Street knock-off..
Even after the jewelry heist, Ms. K should be able to afford the real deal.
Maybe this will work for her followers, however.

I'm going to NYC tomorrow. Staying in Soho. Anyone want a LV bag from Canal St? Group buy?? This tape would look good on the black/gold C'dale Black Inc.

[godfrey1112000]

I'm going to NYC tomorrow. Staying in Soho. Anyone want a LV bag from Canal St? Group buy?? This tape would look good on the black/gold C'dale Black Inc.

Don't forget about the "jewelers selling the Rolex watches":no::cool:

[Joel]

Having worked in the luxury segment previously and having studied LVMH a lot, be aware that they just don't throw money around at brands to bring them on.

From the research I've done, and again a lot of it, they are very smart branding folks who understand and appreciate the gesalt of a luxury brand.

Make no mistake, we'll be seeing even higher end offerings that will likely leverage other equities they own, or similar partnerships.

These guys are good.

[MattTuck]

Having worked in the luxury segment previously and having studied LVMH a lot, be aware that they just don't throw money around at brands to bring them on.

From the research I've done, and again a lot of it, they are very smart branding folks who understand and appreciate the gesalt of a luxury brand.

Make no mistake, we'll be seeing even higher end offerings that will likely leverage other equities they own, or similar partnerships.

These guys are good.

Point taken. I know these guys are good at what they do. I guess that is why it is sort of fun trying to figure out what they're going to do.

In your research, or knowledge of any luxury retailer, how do they handle products that integrate multiple brands (that they do not control)? I'm thinking of things like wheels, drive trains, components, etc. Other than maybe watches that use mechanical movements produced by other firms, I don't see another brand in their portfolio that has this characteristic.

I'm sure they have a plan for it, and probably understand the high end clientele better than I do (clearly, I am not one). So it will be fun to see what they do. I really question though, whether their 'play book' that works for alcohol, fashion and fragrance, is going to work for bikes.

[Joel]

Matt,

Good question! The consumer value in true luxury goods is much more than the "stuff" the item is made from. It is assumed that the physical good will be of the highest quality (to your point on drive trains and such e.g. Campy - Dura Ace).

What sets many luxury goods apart is the "story value" of the item. The luxury consumer lives in a "story economy". And it is that ability to tell the story from the consumer standpoint that drives many purchases.

Full up - it's the rare consumer who will admit to this! It's something we find in the research.

Anyway, hope this makes some sense, and apologies if it does not.

Joel

[bthornt]

If you think they're expensive now . . .

[goonster]

Speaking of Tag watches.

Sorry, I misunderstood.

It so happens that my snobbery pre-dates LVMH's purchase of the TAG-purchased Heuer.

An actual conversation that happened in 1983:

"Dad, who are these "TAG!" geniuses who built that amazing engine in Niki Lauda's unreliable car?"

"Oh, that's just the rich guy who paid for it."

(brief outline of sponsorship-funded motorsports ventures ensues . . .)

[jlwdm]

LVMH has some great brands and does a lot of great marketing, but in my mind their image took a hit with TAG and Pinarello makes no sense. I have never seen Pinarello as something special.

Jeff

[ojingoh]

I think it's a great move for both Pinarello and LVMH. Pinarello has spent years cultivating a high end market, luxury or otherwise. If it's appearance or actual greatness is your opinion and your right.

I'd also like to point out that a lot of middle aged men (most of us) get uncomfortable about buying 'luxury goods' yet somehow will still buy a $10K bike is precisely the reason LVMH is pursuing the deal.

So this deal makes sense.

[MattTuck]

Perhaps part of their criteria for buying a new brand is that it has to have a healthy counterfeit market.... ;)

Literally my only brand association with Pinarello is "Chinarello". And that is probably why I am so skeptical of this move.

I have never seen Pinarello as something special.

That's because their marketing hasn't started to work on us, yet. :cool:

[fuzzalow]

The addition of Pinarello could bring as much to the image and cross-marketing of the LVMH group rather than simply looking at Pinarello as a stand-alone brand that needs to generate its own profitability. Profitability may not be the driver or even the strategy for why Pinarello is in talks to be acquired.

From the news blurb:
Negotiations for the purchase began several months ago by a firm in Milan between the Treviso-based Pinarello and LVMH Group, and what needs to be settled on is only the final sale price, however, the deal could be complete soon.
The purchase price means everything because there will be pricing multiples that have to be met, or not met, depending on what, why and how LVMH intends to use the Pinarello acquisition within their strategic plans going forward. In the same sense not all Rolex wearers are tennis players for how Rolex uses Federer neither does Pinarello entail the Belgian hard-man imagery as used by Rapha. The imagery is neither wanted or needed to be hard-limnked to the sporting activity.

We don't know how Pinarello is contemplated to be used by LVMH. My point being not all business dealings are driven by profitability. Aand based on the pricing of the deal, may not even be a parameter for why this is being done.

[verbs4us]

An interesting point is that the bicycle environment has gotten to the point where a brand like LVMH even considers the potential of the business. 15 or 20 years ago, I doubt it would have even been a possibility. When I was growing up, my dad would take rides around the neighborhood after work and at his funeral, one of my friends said "your dad was the only adult I ever saw on a bike." That was the 1970s. Now LVMH sees nothing but adults on bikes, flush with cash and wanting the bike to make a statement about who they are and what they value. I think we have changed the bike ecosystem.

[managerx]

When I read this a couple days ago - I will admit I was a bit shocked, but then I thought about it a bit more and it does make sense.

Cycling hits lots of boxes in the luxury market - I am sure the average income/net worth and education attainment is amongst the highest of sports. People have little trouble justifying spending huge sums on bikes - and with the rise of more high end clothing (e.g. Rapha) we're seeing people drop equally big sums on clothing.

If I was an analyst looking to pitch new avenues for growth - cycling would have to be on the list - and Pinarello with their Team Sky affiliation is probably the most lux main stream brand their is...

[559Rando]

Bling is bling.
Expect to see Pinarellos in rap videos...

Sent from my Nexus 5X using Tapatalk

[breukelenvr6]

Technically it's L Catterton that would be the acquirer of a majority stake in Pinarello, which is the combined entity of private equity firm Catterton Partners and LVMH's investment arm. The acquisition may or may not have any strategic ties to the parent LVMH, so it could continue to be run independently though not without a good deal of say-so from the new owner :beer:

[1centaur]

Note Peloton among L Catterton's many, many brands.

http://www.lcatterton.com/Brands.html#!/current

[MattTuck]

Note Peloton among L Catterton's many, many brands.

http://www.lcatterton.com/Brands.html#!/current

Thanks for posting that. Those brands are definitely not on par with the other brands of LVMH, their so called 'houses'.

So, Pinarello makes more sense as a high end bicycle company in this portfolio of brands. Much more so than adding Pinarello to the portfolio of LVMH brands.

[charliedid]

People still ride Pinarellos?

[happycampyer]

It does make more sense to add Pinarello to the flotsam and jetsam of L Catterton than to LVMH.

[mistermo]

http://www.yachtsandyachting.com/photos/ac45/yandy131632.jpg

What do high end purses & luggage have to do with sailing? Yet the LVACWS is the F1 of sailingand make no mistake, they are entrenched.

So what does Pinarello have to do with ________? (Fill in the blank.)

[happycampyer]

When I read this a couple days ago - I will admit I was a bit shocked, but then I thought about it a bit more and it does make sense.

Cycling hits lots of boxes in the luxury market - I am sure the average income/net worth and education attainment is amongst the highest of sports. People have little trouble justifying spending huge sums on bikes - and with the rise of more high end clothing (e.g. Rapha) we're seeing people drop equally big sums on clothing.

If I was an analyst looking to pitch new avenues for growth - cycling would have to be on the list - and Pinarello with their Team Sky affiliation is probably the most lux main stream brand their is...
When I read the story about Pinarello, I thought at the time that Rapha would be a more natural fit for LVMH. Now it looks as if Rapha is in play.

[cmg]

Pinarello has been sold. http://www.bicycleretailer.com/international/2016/12/06/pinarello-sold-private-equity-firm-involving-lvmh#.WEdp67nCZdg

UPDATED. Company plans to open concept stores in prestigious capital cities.

GREENWICH, Conn. (BRAIN) — Italy's Pinarello bike brand has been purchased by L Catterton, a U.S.-based private equity firm. The luxury brand conglomerate LVMH, the owner of Louis Vuitton and other brands, is a part owner of L Catteron. A purchase price was not released.

The Pinarello management team will continue to be led by CEO Fausto Pinarello out of the brand's Treviso headquarters. Fausto Pinarello retains a "signifcant" minority stake in the brand.

so minority that at the first sign of conflict he'll be fired. this sounds like the serotta story all over again. they'll slowly move production out of italy, stop sponsorship and reduce the brand to just a label.

[jr59]

Pinarello has been sold. http://www.bicycleretailer.com/international/2016/12/06/pinarello-sold-private-equity-firm-involving-lvmh#.WEdp67nCZdg

UPDATED. Company plans to open concept stores in prestigious capital cities.

GREENWICH, Conn. (BRAIN) — Italy's Pinarello bike brand has been purchased by L Catterton, a U.S.-based private equity firm. The luxury brand conglomerate LVMH, the owner of Louis Vuitton and other brands, is a part owner of L Catteron. A purchase price was not released.

The Pinarello management team will continue to be led by CEO Fausto Pinarello out of the brand's Treviso headquarters. Fausto Pinarello retains a "signifcant" minority stake in the brand.

so minority that at the first sign of conflict he'll be fired. this sounds like the serotta story all over again. they'll slowly move production out of italy, stop sponsorship and reduce the brand to just a label.


Highly doubt it! That is NOT the way LVMH normally works. Their history with other companies have not shown such, but time will tell.

Comparing this to Serotta is apples to oranges. Both are bikes, as are both are fruit.