I don't get why Trek bought a LBS?

[merlinmurph]

Originally Posted by tomato coupe

Those issues existed for the previous owner as well, and they made money.

Maybe.

Then again, maybe the owner drew a salary, made a living, got a few write-offs, he kinda liked running the shop, and the business broke even.

[Big Dan]

The previous owners made money..........

maybe.

[robt57]

Originally Posted by tomato coupe

view it as a threat to their "monopoly"?

Seems easy to see it would be contrary to the plan, no?

[tomato coupe]

Originally Posted by merlinmurph

Maybe.

Then again, maybe the owner drew a salary, made a living, got a few write-offs, he kinda liked running the shop, and the business broke even.

If the owner drew a salary and the business broke even, it was a profitable business for the owner.

Originally Posted by Big Dan

The previous owners made money..........

maybe.

You think the previous owner ran the shop for many years, even though they didn't make any money?

[tomato coupe]

Originally Posted by robt57

Seems easy to see it would be contrary to the plan, no?

You think Trek is worried about a small town bike shop threatening their "monopoly", when there are a few other things like, Specialized, that might be of more concern?

[unterhausen]

I think it's true that most bike shops barely break even. If Trek/spesh only break even on a shop, it's not going to last that long. If there isn't competition from the other big companies, they are going to put it out of its misery pretty quickly. Our town is like that, no trek dealer closer than the aforementioned lawnmower shop in Altoona. Somehow I don't think Spesh is going to worry about that here 50 miles away.

I'm sure both Trek and Specialized refuse to understand that their company stores are boring as hell to enthusiasts. I certainly wouldn't have much loyalty to a store like that either. I suppose they probably don't care. Hard to know if they should. It's funny when they try to force a well-known IBD into being a company store though, the reason that store is well known is probably because they are not boring. So changing that is a bad idea.

[BrazAd]

Originally Posted by CAAD

Trek just bought the largest Trek retailer in the US. David's world cycle, they were #1 in the country. 21 stores in total. Happened a couple of months ago. The big keep getting bigger. These large companies will have us all by the balls soon enough once they absorb the competition.

I bought a Salsa Warbird from David’s World Cycle in December. I was shocked when heard this news a month or two ago!

Gary


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[superbowlpats]

My LBS is now a Trek store. Former owner barely made a living and was spending way too many hours there and missing out on his young family. so good for him,

Only go there now to buy my grandkids bikes for their birthdays.

[robt57]

Originally Posted by tomato coupe

You think Trek is worried about a small town bike shop threatening their "monopoly", when there are a few other things like, Specialized, that might be of more concern?

No, only what I said. I think the guy that inked the purchases, or too many that loose Trek money beyond what ever the acceptable time window may be is the one worried.

How many years of Trek loosing money at a purchase is acceptable I do wonder.

I remember reading the Home Depot figures in the the case of the NJ Rickles/Channel buy outs. I do not recall what the time window is though...

[RoosterCogset]

Originally Posted by tomato coupe

You think Trek is worried about a small town bike shop threatening their "monopoly", when there are a few other things like, Specialized, that might be of more concern?

Didn't Specialized sue a cafe up in Canada for using the roubaix name. Big guys shouldn't be worried about individual little guys, but they as a whole they apparently are.

[tomato coupe]

Originally Posted by RoosterCogset

Didn't Specialized sue a cafe up in Canada for using the roubaix name. Big guys shouldn't be worried about individual little guys, but they as a whole they apparently are.

That had nothing to do with the cafe being perceived as a threat to their business.

[tomato coupe]

Originally Posted by robt57

Seems easy to see it would be contrary to the plan, no?

Originally Posted by robt57

No, only what I said. I think the guy that inked the purchases, or too many that loose Trek money beyond what ever the acceptable time window may be is the one worried.

Sorry, but I don't know what "the plan" is, and I can't decipher your last statement. I don't know what point you're trying to make.

[robt57]

If reading between my lines is too vague for some [all] i take the blame.

But I am done..

[batman1425]

Originally Posted by Pegoready

My theory about all these purchases is they're only purchases on paper, but no real money exchanges hands.

Trek/Spec spends years jamming product down a shop's throat, giving them terms, and homogenizing their sales floor.

They are both the shops biggest supplier and lender.

That leads to shops being so indebted to Trek or Specialized that they have no choice but to "sell." I'm sure the terms are favorable to Trek, and they're left with no choice but to absorb the store.

I can’t speak the bleed them out plan being intentional, but Spec sure seemed to be trying to do that early in COVID with the purchase terms changes. That said - I agree that if they are going to force the shop to carry the whole product range anyway, it makes sense just to be the retailer and buying an existing business is cheaper and easier than starting new ones. Fixed costs are the same, margins are way better and depending on the business there may be equity assets involved - buildings, property etc. The dealership model makes total sense for the brands. If LBS want to stay afloat and not get bought out they have to reprogram to fit in that scheme.

Something we all seem to glaze over - the folks on this board represent a SMALL fraction of LBS patrons. While we may be highly discerning of brands, product ranges, service, etc, the average person takes their bike to the shop that is most convenient for them buys the goods they stock and pays what they charge for service. That person doesn’t care of Trek owns the shop or somebody else. They came needing a new bike or have a broken part and want to leave with a working one. In fact, for many, they’ll see the brand ownership as legitimization or representation of quality, particularly those new to the sport.


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[tomato coupe]

Originally Posted by batman1425

I can’t speak the bleed them out plan being intentional, but Spec sure seemed to be trying to do that early in COVID with the purchase terms changes. That said - I agree that if they are going to force the shop to carry the whole product range anyway, it makes sense just to be the retailer and buying an existing business is cheaper and easier than starting new ones. Fixed costs are the same, margins are way better and depending on the business there may be equity assets involved - buildings, property etc. The dealership model makes total sense for the brands. If LBS want to stay afloat and not get bought out they have to reprogram to fit in that scheme.

Something we all seem to glaze over - the folks on this board represent a SMALL fraction of LBS patrons. While we may be highly discerning of brands, product ranges, service, etc, the average person takes their bike to the shop that is most convenient for them buys the goods they stock and pays what they charge for service. That person doesn’t care of Trek owns the shop or somebody else. They came needing a new bike or have a broken part and want to leave with a working one. In fact, for many, they’ll see the brand ownership as legitimization or representation of quality, particularly those new to the sport.

You nailed it. It's the same reason Schwinn shops were so successful in their day, despite being boring for "enthusiasts."