Trek and Specialized on the LBS prowl, cont'd

[GregL]

Already discussed in two other threads: Trek isn’t just purchasing bike shop chains, they’re also picking up strong independent dealers in smaller markets. I’d love to be a fly on the wall in their boardroom to fully understand the strategy.

Greg

[Velocipede]

Originally Posted by GregL

Already discussed in two other threads: Trek isn’t just purchasing bike shop chains, they’re also picking up strong independent dealers in smaller markets. I’d love to be a fly on the wall in their boardroom to fully understand the strategy.

Greg

Trek has been wanting to go public for some time now. They shifted from China and Taiwan to Vietnam to avoid the common issues with buying from there. The manufacturing costs are the same but the tariffs are lower. Same reason others are moving there. If they make it look attractive enough and have a large enough share, they can do the IPO and clean up. Plus with a ton of time behind the Lance affair, it's easier. They wanted to back then and things blew up in their faces. It's pretty easy to see where things are going for them. SRAM wanted to do an IPO and it was announced many times that things were in the works but the brake and dropper and suspension post issues stopped it. It's part of the reason they moved everything to Indy and changed the HQ in Chicago.

[Velocipede]

Originally Posted by zap

So, Jim Strang sold. Indeed, interesting times.

And Jim Hogan at Geneva Bicycle Center in NY just sold to Trek as well.

[.RJ]

Rumor mill is the spokes shops sold @ $1.5M each. I have no idea how profitable the shops are but it sounds like a damn nice exit and it locks out the biggest specialized dealer in the area.

I guess any remaining brand-S dealers gonna get a good deal if they are trying to retain any territory around here.

[EB]

As I’ve said on other threads, this is really all about ebikes, which is still a big growth business. These companies are trying to catch the wave as it crests and I agree that an IPO cash-out is part of that strategy.

[GregL]

Originally Posted by Velocipede

And Jim Hogan at Geneva Bicycle Center in NY just sold to Trek as well.

This is the one that made me sad. GBC was the best independent LBS in central NY. Great selection, knowledgeable & pleasant staff, and a very friendly vibe. I stopped in there nearly every time I visited my daughter in Geneva. Even if the great staff stays on, the only products in the store will be Trek & Bontrager. No more Cervelo, Giant, Co-Motion, or Salsa products in the shop.

Greg

[unterhausen]

We have a really great lbs here, but when we moved here that wasn't really the case. I think I could live with a spesh only or trek only dealer, but if it was factory owned I would have nothing stopping me from doing most of my bike buying online. OTOH, there is a Giant only dealer 60 miles from here and Giant's accessory line just doesn't seem to meet my needs very well. Or it could just be that shop.

[titans]

High Gear in NJ was bought out by Trek too. I walked in the other day just to check it out and like the other poster said above, nothing but Trek products.

[sjbraun]

In Tucson, we have at least one Trek store, maybe two. I'm curious to see how this plays out for the premiere Tucson bike shop, Fairwheel Bikes. Somehow they continue to offer bikes from bith Trek and Specialized. Sounds like they are somewhat of a rarity among bike shops.

[54ny77]

Fairwheel sells Trek and Specialized bikes?

Wow. Didn't know that one.

Best place for the fancy stuff, hands down. Terrific service.

Originally Posted by sjbraun

In Tucson, we have at least one Trek store, maybe two. I'm curious to see how this plays out for the premiere Tucson bike shop, Fairwheel Bikes. Somehow they continue to offer bikes from bith Trek and Specialized. Sounds like they are somewhat of a rarity among bike shops.

[klasse]

Trek took over the local Helens Cycles in Marina Del Rey, I think.

[peanutgallery]

There is no single shop worth that kinda cash in the US. Much less 6 in the same market

Maybe $1.5 million for all 6, Trek would have to assume a bunch of Expensive rent, too. They already own stores within a mile or 3 of a few locations to boot

Unless a rich uncle is coming along with a wad of cash....

Commercial real estate in the are is just too expensive to sell enough bike stuff to cover that nut

Originally Posted by .RJ

Rumor mill is the spokes shops sold @ $1.5M each. I have no idea how profitable the shops are but it sounds like a damn nice exit and it locks out the biggest specialized dealer in the area.

I guess any remaining brand-S dealers gonna get a good deal if they are trying to retain any territory around here.

[b33]

I was thinking the exact same thing and I've done acquisitions.

Originally Posted by peanutgallery

There is no single shop worth that kinda cash in the US. Much less 6 in the same market

Maybe $1.5 million for all 6, Trek would have to assume a bunch of Expensive rent, too. They already own stores within a mile or 3 of a few locations to boot

Unless a rich uncle is coming along with a wad of cash....

Commercial real estate in the are is just too expensive to sell enough bike stuff to cover that nut

[peanutgallery]

Any shop owner with a Sturmey Archer tattoo is the best

J Wag is a character, that's for sure

Originally Posted by unterhausen

We have a really great lbs here, but when we moved here that wasn't really the case. I think I could live with a spesh only or trek only dealer, but if it was factory owned I would have nothing stopping me from doing most of my bike buying online. OTOH, there is a Giant only dealer 60 miles from here and Giant's accessory line just doesn't seem to meet my needs very well. Or it could just be that shop.

[Velocipede]

Originally Posted by peanutgallery

There is no single shop worth that kinda cash in the US. Much less 6 in the same market

Maybe $1.5 million for all 6, Trek would have to assume a bunch of Expensive rent, too. They already own stores within a mile or 3 of a few locations to boot

Unless a rich uncle is coming along with a wad of cash....

Commercial real estate in the are is just too expensive to sell enough bike stuff to cover that nut

I think a cook of the shops are owned, not rented. I think the Ballston Spa location is owned by Spokes.