Industry Digest: Tumbling Peloton Stock, eMTB Battery Recycling & Cannondale's New US Assembly Facility
What's going on in the cycling industry this month? Industry Digest is a peek behind the curtain and showcases articles from our sister site, Bicycle Retailer and Industry News. In each installment, you might find patents, mergers, financial reports and industry gossip.
Vosper: The hidden big picture in the Pon/Dorel story
By: Rick VosperPon Holdings, parent company of Pon.Bikes, is not shy about augmenting its distributed brands by purchasing retailers. Case in point, Pon purchased the indiGO Auto Group in 2019, with 21 dealerships in California, Missouri and Texas. IndiGO dealerships sell Porsche, Bentley, Bugatti, Lamborghini, Ferrari, Rolls Royce, Aston Martin and McLaren, along with more mainstream brands like Volkswagen, BMW, Land Rover, Audi, Jaguar and others. Compared to a purchase like that, Pon’s acquisition of the 12-store Mike’s empire is just pocket change.
So we have Pon, which now controls a powerful stable of bike brands that can’t find enough premium retailers to sell their products. And Pon has a business model of acquiring retailers to sell the brands it represents. In fact, it’s already acquired one of the biggest and most successful dealer chains, and right in Specialized’s backyard, too. Now what do you suppose Pon is likely to do in this situation? That’s the question that should make Giant very, very nervous. Not to mention Trek and Specialized.
(Read more.)
Peloton stocks tumble after it lowers forecasts
By: Bicycle Retailer & Industry NewsPeloton Interactive Inc. shares were down more than 34% on Friday after the company lowered its forecasts for 2022 sales.
Peloton is now forecasting full-year fiscal sales of $4.4 billion to $4.8 billion, down from a previous forecast of $5.4 billion. Peloton also lowered its forecast for connected fitness subscriptions to 3.45 million by the end of the year, down from a previous forecast of 3.63 million. And it lowered its full-year gross margin forecast from 34% to 32%. The final result is forecast to be a loss of $475 million for the year.
Peloton is now forecasting full-year fiscal sales of $4.4 billion to $4.8 billion, down from a previous forecast of $5.4 billion. Peloton also lowered its forecast for connected fitness subscriptions to 3.45 million by the end of the year, down from a previous forecast of 3.63 million. And it lowered its full-year gross margin forecast from 34% to 32%. The final result is forecast to be a loss of $475 million for the year.
Bloomberg reported Friday that Peloton CEO founder John Foley saw his net worth fall below the $1 billion level on Friday due to the stock price decline.
(Read more.)
Police: Giron stole credit cards, confessed to murder of Jamis co-worker
By: Bicycle Retailer & Industry NewsPolice investigators say Christian Giron used a hand-held sledgehammer to kill his Jamis Bicycles co-worker Jeanette Willem at the brand's headquarters Wednesday morning.
They say he then stole Willem's credit cards as well as a company credit card, drove home and changed his clothes and then returned to the office where he called 911. They say he confessed to the crimes at the Northvale police department soon after.
They say he then stole Willem's credit cards as well as a company credit card, drove home and changed his clothes and then returned to the office where he called 911. They say he confessed to the crimes at the Northvale police department soon after.
According to a police report, video surveillance cameras showed Giron approaching Willem at the office at about 7:39 a.m. The report redacts sections that appear to describe the exact interaction between the two. It says Giron discarded the credit cards in a garbage can along the street and hid the hammer under a parked trailer in front of the business.
(Read more.)
Dorel Sports plans bike assembly factory in Georgia
By: Bicycle Retailer & Industry NewsIn a move to ease supply chain constraints, Cycling Sports Group is opening a bike assembly facility in this community outside Savannah.
Dorel Sports, CSG's parent, announced in March that it was opening the 775,000 square-foot facility as a fulfillment center for its bicycle brands including Cannondale, Schwinn, Mongoose, Kid Trax, and GT.
“The new building is much more than just a building,” Brad Gandy Sr., director of North American Operations for Pacific Cycle/Dorel Sports, said in a March statement. It’s an opportunity to cater our supply chain operations and develop a flagship facility we can use to benchmark for continual improvements throughout our Dorel Sports family.”
Dorel Sports, CSG's parent, announced in March that it was opening the 775,000 square-foot facility as a fulfillment center for its bicycle brands including Cannondale, Schwinn, Mongoose, Kid Trax, and GT.
“The new building is much more than just a building,” Brad Gandy Sr., director of North American Operations for Pacific Cycle/Dorel Sports, said in a March statement. It’s an opportunity to cater our supply chain operations and develop a flagship facility we can use to benchmark for continual improvements throughout our Dorel Sports family.”
Industry comes together for e-bike battery recycling program — what will it mean for retailers?
By: Dean YobbiNow that PeopleForBikes and Call2Recycle have established the industry's first e-bike battery recycling program for U.S. retailers, proper training and equipment will be mandatory to ensure safe storage of expired packs returned to shops, according to a micromobility consulting group.
PeopleForBikes announced the recycling program on Nov. 3, with about 20 industry suppliers and manufacturers supporting and funding the safe collection and recycling of lithium-ion e-bike batteries to help reduce overall recycling costs. Retailers can begin enrolling in the program in February to become collection sites.
PeopleForBikes announced the recycling program on Nov. 3, with about 20 industry suppliers and manufacturers supporting and funding the safe collection and recycling of lithium-ion e-bike batteries to help reduce overall recycling costs. Retailers can begin enrolling in the program in February to become collection sites.
Most shops are still unaware of the program, which is optional. Some industry experts said retailers should embrace the program but also educate themselves on battery safety and invest in safety equipment before agreeing to participate.
More than 40 bike industry leaders from 20 PeopleForBikes member companies united under a sustainability task force and e-bike committee to design the program. It aims to address the environmental concerns associated with expired, damaged, or defective lithium-ion batteries.
(Read more.)
British photographer files copyright claim against California bike shop
By: Bicycle Retailer & Industry NewsA UK-based professional photographer has filed a lawsuit against California-based Summit Bicycles, claiming photo of an e-bike on Summit's website is his copyrighted intellectual property and is being used improperly.
The lawsuit includes a screenshot that allegedly shows the photographer's photo of a Brompton folding bike on Summit's e-commerce site. The suit also includes a link to the page. On Monday, the same page included a photo of a different model Brompton (see photo at bottom of this article).
When reached by BRAIN on Tuesday, Summit Bicycles CEO Ian Christie said he was unaware of the suit before BRAIN told him about it and said he never received a cease-and-desist notice from Thorn or the law firm.
The lawsuit includes a screenshot that allegedly shows the photographer's photo of a Brompton folding bike on Summit's e-commerce site. The suit also includes a link to the page. On Monday, the same page included a photo of a different model Brompton (see photo at bottom of this article).
When reached by BRAIN on Tuesday, Summit Bicycles CEO Ian Christie said he was unaware of the suit before BRAIN told him about it and said he never received a cease-and-desist notice from Thorn or the law firm.
A screenshot of the photograph on the Summit website as it appeared Monday October 18
The photographer, Robin Thorn — the director of Thorn Cycles Ltd. in Bridgwater, England — told BRAIN he uses a web-based service, Copytrack, to monitor the use of his company's images. He told BRAIN he signed up with the service because his company employs two full-time photographers and has discovered "thousands" of cases of their photos being used without permission.
(Read more.)
Is Rad Power the $329-million gorilla of the e-bike world?
By: Steve FrothinghamOn Thursday Rad Power announced that with its latest $154 million financing round, it has brought in a total of $329 million in investments since its inception. The company claims that makes it the world's best-funded e-bike brand, at least in the direct-to-consumer market. While strictly speaking that's likely true, there are some other mega players in the e-bike space with the power to further disrupt the market for regular and electric bikes if they choose.
But there are participants in the e-bike industry and around it that already wield considerable power, and could have even more potentially — more than Rad Power and more than some of the largest companies currently in the bike industry.
But there are participants in the e-bike industry and around it that already wield considerable power, and could have even more potentially — more than Rad Power and more than some of the largest companies currently in the bike industry.
Within this industry, Shimano (annual revenue about $4 billion) and Giant Group (annual revenue about $3 billion) are each investing heavily in e-bikes, with the electric-assist machines accounting for about a third of Giant's revenues this year.
(Read more.)
Biden's compromise legislation platform returns e-bike tax credit to original rate
By: Bicycle Retailer & Industry NewsPresident Joe Biden released a revamped climate-change plan Thursday as part of his Build Back Better Act that includes restoring the originally proposed e-bike tax credit percentage while keeping the bicycle commuter benefit unchanged.
The tax credit for the purchase of an e-bike originally was proposed at 30% when Congressmen Jimmy Panetta (D-Calif.) and Earl Blumenauer (D-Ore.) created the E-BIKE Act. However, in September, the House Ways and Means Committee reduced the credit in half.
The tax credit for the purchase of an e-bike originally was proposed at 30% when Congressmen Jimmy Panetta (D-Calif.) and Earl Blumenauer (D-Ore.) created the E-BIKE Act. However, in September, the House Ways and Means Committee reduced the credit in half.
As part of the revamped bill announced Thursday, it's back to 30% but over five years — not 10 — with the same means-testing price caps previously. The Build Back Better Act — formerly the GREEN Act — proposes $7.4 billion for e-bike tax credits. It also would establish an $81 a month pre-tax benefit for biking to work that could be used with parking and transit and bike share, micromobility and e-bike costs.
(Read more.)
Must Read This Week
168 Comments
Be the best/worst gravel curly bar ever!!! @hamncheez:
The 26" Scalpel from the 2000s was a true flex pivot- no pivot anywhere except the shock link. The chainstay pivot and "main" pivot are both flex stays.
In 2008 I put drop bars, disc brakes, and 35c tires on my Surly Karate Monkey. Everyone thought it was a dumb idea.
Fast forward 10 years...Gravel bikes are just rebranded old school 29ers
And 145mm cranks.
I am not going to ride my bike indoors anyway but if I would, I wouldn't use pooploton.
I'm sure you'll just go tell to watch some YouTube videos next so I can be as "woke" as you.
Like being a vegan. Life brag.
Its easy for people to sit here and say "go outside and ride", but in the winter with the short days, plus the winter weather, that's just not possible. Having that bike I can just jump on it with any free time I have and get a solid 30-45 minute workout.
Also, it is in no way the same as any old stationary bike. The instructor format, music, etc all make it much easier to stomach than a regular stationary bike. As someone else pointed out above, for many people just having a program to follow with a person (even if pre recorded) yelling at you to do something makes it much easier to do. I've had gym memberships for years, and had a regular stationary bike in my house for a while, and you could count on one hand the times I got on that bike or one at the gym.
It's the first time I ever heard that this group even exist.
Zwift is pretty much enough for me.
Direct drive trainer connected to it is enough and it's cheaper and takes less space than anything else.
When you actually have a training plan for anything everything else is obsolete , zwift programs, Strava , peleton and so on because no one will beat the real all in one plan from an actual coach.
@cmi85
I don't agree, a lot of craftsman and other Jobs where you working hard physical come home kinda exhausted. Most of us don't want to go out after we are done when there is no sunshine and trails are even closed because of snow and ice. If you have fun with flat boring trails so be it but I rather much do my HIT just 30min after I got home to f*ck up anyone who does nothing when trail's are free again.
But the business is so grossly overinflated it's crazy. The company valuation multiple is insane, they're still losing money after making billions in revenue and what is arguably a very modest miss resulted in a 1/3 of the value being dumped. And they missed a growth number, after an exceptional year with return to work in full swing. Shows how unhinged investors are in today's bubble market.
www.google.com/amp/s/www.dcrainmaker.com/2021/09/gopro-hero-10-black-in-depth-review.html/amp
Case in point, friend's wife said 'I want a Peloton!' and he thought ohhhh no, not spending money on that, especially since they were still in the middle of a 3 year gym contract to the 'fancy gym' that was going absolutely unused. So he made her a deal--he bought her a very well-reviewed stationary bike from Amazon, and she has a tablet, computer, or a smart TV in the basement to set the bike up in front of. If she used it and liked it, he would buy her a Peloton. She's ridden it twice in 8 months, heh. She wanted the Peloton to have the thing everyone else has.
There are *tons* of free spin workouts on YT, there are apps.. I don't think you're brainwashed if you ride a Peloton, but for those considering indoor exercise options just realize there are cheaper ways to get 95% of the experience if you can make due with calling it your stationary bike instead of your Peloton.
Most action cam review dudes wont cover this enough for me. No one is riding with kind of a bad light source around nor do I see the type of MTB dude who really review it to cover this particular topic.
My coment was primarily about what Peloton is selling to the investor community and their valuation. They're seling recurring revenue and a sticky social media platform to drive their valuation. The ultimate issue that Peloton will have, however, is exactly what drives the economics of gym membership- the vast majority of people who sign up for a gym end up dropping out within a year. That churn model works for gyms because there is an annual seasonal surge in sign-ups. But that model is problemmatic for Peloton because of the cost of the hardware they have to sell along with the monthly subscription, so the transaction costs to the consumer are much higher than a gym membership, which really limits the new sign ups. So they'll see slower customer acquisition on the front end combined with constant atttrition from their existing customer base, resulting in the revenue squeeze they're seeing right now.
Could I get a janky stationary bike and use my Ipad with some free spin classes I find on the internet? Sure I could. But that's not the same experience in terms of quality and convenience. Unless we all have the basic base model of everything we own, we are all guilty of spending too much on certain things.
I would say most people in the comment section here probably have a pretty decent bike (or five). But they could probably get 95% of the experience or whatever bike they ride with a model that's a few years older, few pounds heavier, and quite a bit cheaper. That being the case, unless someone has the base model of everything they own, coming here and crapping on Peloton is a bit hypocritical.
I've ridden a Peloton bike, have friends who have them. They are not impressive in terms of build quality. They are just fine. They have a screen built in. And? It seems that you are looking for a justification to spend more than you needed to to get 95% of the same function. No one said go buy some Walmart junk bike, or anything 'janky' as you put it, yeesh. And in terms of 'convenience', I don't have to run a windmill to power up YT or download an app, so I don't know what you're on about. Just ride your Peloton and be happy dude, you don't need anyone's approval, even if you appear to be seeking it.
This would apply to almost anything. TV's sure. Thats an easy one. A $400 4K smart TV would absolutely give you 95% of the benefits of the $1500 one.
Refrigerators of the same size range anywhere from around $1200 to $3500. I bet they all keep your food cold and frozen just the same though.
An Iphone SE costs $400 vs $1100 for a 13 pro. Does it text, make calls, and take pics? Then it does 95% of what the more expensive one does.
Bikes? Does buying a top spec carbon bike for $7K really provide that much different of an experience than the aluminum version of the same bike for $2500? The answer is no. The upgrades are nice, but are they necessary to have a good time out on the trails? No they are not.
Cars? Tools? Furniture? Anything really. There are levels of luxury and convenience for almost everything. People choose to spend their money on things where they see benefit.
Like I said, unless someone buys the budget version of everything they own, then picking and choosing to call out others for buying a more expensive item that they don't really need is hypocritical.
Enjoy your Peloton dude. Not going to argue with you any further.
That is unless you can show me where I actually called you a name?
And yes, you can edit a comment for what, like 3 minutes after you post it? Do you think this is a big 'gotcha' or something? But seeing as how you say I *added* to it, not deleted it, what is the issue? Feel free to screen grab and post a link to the image of where I called you anything, would LOVE to see this dude.. spoiler, you can't. Because it never happened.
Any other goalposts you would like to move, or are you going to take some responsibility in the fact that I've never been the person you thought you were arguing with this whole time?
Around 15 years ago Cannondale top management decided they were not getting rich enough, and closed the C-dale factory in Pennsylvania, hundreds lost their jobs, and cannondale became yet another anonymous, contract made bike brand sourcing frames from China and Taiwan.
Fast forward to current times, and C-dale bosses decide they are not getting rich enough due to current logistics limitations and build another new factory in Georgia, as well as a new assembly facility in Holland.
I wonder how long it be until they decide they can maximize profits by moving again? I hope any new cannondale employees at these new location know the backstory before they buy a house.
They have shown zero respect for their employees, zero respect for any place of business....not commiting to any location for any longer than it takes to squeeze every last drop out of it, before they take off, always looking for the next small to mid sized town who is willing to give them a tax break in order to attract their business, in form of a new factory or office and the jobs that go with ( however tomporary they many be).
If you have any place in your heart for the worker, the common man or woman who works payday to payday, I suggest you dont support cannondale.
Not sure about US laws but here in Canada "country of origin" is value based, i.e. wherever majority of the value is added to a product is where it can be labelled as having originated. Is it the same in the US? I wonder if that is why they've chosen US-based assembly.
Interesting times in the industry, that's for sure!
As for Trek, they've gone from offering US made (from US tubing) bikes from $600 in the 1990's to making ZERO bikes in-house. They have to contract all of their manufacturing with Giant, Merida, or Ideal because no other vendors can meet their volume needs. Having a rival like Pon to fight for limited production volume may hurt them, Being unable to rely on manufacturing revenue building for other brands limits them. They could get squeezed as the bike industry consolidates. It'd be a shame, but they decided to make this bed over 20 years ago.
If you want to actually understand how shareholders exert influence, you'd have to look at proxy voting and Board Membership. Two points here. Vanguard does not elect anyone within the organization to Board seats like you might see from an activist strategy. In addition, Vanguard does not control the proxy voting of a large chunk of their assets that are managed by a subadvisor. They allow the subadvisor to vote on their behalf.
Anyways. Let me know if you want me to keep tearing you apart.
I'm hoping they dont requires pedals.
I want an electric motion trials