SSU insolvency and the bike industry generally

[toast2266]

In BC Kona was always a big name brand like Rocky or Brodie

Same in the U.S. In the 00's through maybe 2014 or so, I'd bet they were the 4th biggest brand in the country (behind trek, specialized, and giant), at least in terms of quality mountain bikes.

Seemed like they floundered a bit as bikes started changing, and then private equity swooped in to seal the deal.

[MarsB]

I heard rumor that Kona had just set up their tents at Sea Otter when they got the word to pack up and head home.

[east or bust]

Same in the U.S. In the 00's through maybe 2014 or so, I'd bet they were the 4th biggest brand in the country (behind trek, specialized, and giant), at least in terms of quality mountain bikes.

Seemed like they floundered a bit as bikes started changing, and then private equity swooped in to seal the deal.

Totally agree with your timeline. When I really got into mountain biking in the mid 2000s, Kona was huge. Any mtb movie you watched you’d see those big stencil block letters on the side of the frame and knew exactly what you were looking at.

Didn’t realize Jake and Dan sold to Kent in 2022 until looking it up recently. For some reason I thought they had sold much earlier. No offense but those guys really fucked the dog, Kona was on the fritz long before that sale went through.

I heard rumor that Kona had just set up their tents at Sea Otter when they got the word to pack up and head home.

Yep, also heard/read that somewhere. Just speaks to the discontinuity going on there.

[geomorph]

Looks like Planet Cyclery/Colorado Cyclist is closing up shop. Some good deals to be had on the carcass of the bubble, like this GX cassette that I just paid full freight for now at 104$
https://planetcyclery.com/components...10-52-12-speed

[Eluder]

Can't find it in quick searches and don't want to start a rumor but I heard that Adam Miller was pushed out by investors at Revel. Confirm or deny?

Edit, found it: https://www.linkedin.com/posts/adam-...192665088-IM8o

[SKIP IN7RO]

^Paying Carbondale wages to a staff of 28 doesn't seem possible for a brand like Revel, maybe 27 is more doable.

[Tailwind]

Revel is a company I’m curious about.

Trendy, mostly consumer direct, quality is more B+ range so maybe a but cheaper to produce… but unsure of if they’ve hit a point where they’re profitable or still carving out at niche.

They did a “warehouse moving sale” a few months ago which made me wonder if they’re moving locally or further afield.

They are the type of company I want to stick around as they’re building bikes not just designed around winch and plummet PNW riding. We bought my wife a ranger on their Black Friday sale and it seems solid.

Sad to see Adam go. I’ve bumped into him a few times and he seems solid.

Can't find it in quick searches and don't want to start a rumor but I heard that Adam Miller was pushed out by investors at Revel. Confirm or deny?

Edit, found it: https://www.linkedin.com/posts/adam-...192665088-IM8o

[nickwm21]

I listened to that 4 part Escape Collective podcast mentioned above. Great listen.

I was surprised at how unsophisticated the bike industry is. I understand these companies are not run by squads Wharton MBAs in their khakis and fleece vests… But it was eye opening for sure.

QBP forecasting their purchasing with email surveys…

Reps being paid commission when product hits shop floors, not customers hands…

I feel like half the drama could have been avoided if the shops, brands, distributors, manufacturers picked up the phone and talked to each other outside of “I need more stuff”. Do they not schedule weekly / monthly touch points?

Also - several of the interviewees said “It was crazy! We were so busy! We were working 50 hour weeks!” A little out of touch… how the fuck do they think people can afford to buy the shit they sell?


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[Eluder]

I listened to that 4 part Escape Collective podcast mentioned above. Great listen.

I was surprised at how unsophisticated the bike industry is. I understand these companies are not run by squads Wharton MBAs in their khakis and fleece vests… But it was eye opening for sure.

QBP forecasting their purchasing with email surveys…

Reps being paid commission when product hits shop floors, not customers hands…

I feel like half the drama could have been avoided if the shops, brands, distributors, manufacturers picked up the phone and talked to each other outside of “I need more stuff”. Do they not schedule weekly / monthly touch points?

Also - several of the interviewees said “It was crazy! We were so busy! We were working 50 hour weeks!” A little out of touch… how the fuck do they think people can afford to buy the shit they sell?


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I'll admit I have yet to listen to the podcast, but this discussion has me ready to. I apologize if this is redundant.

I agree the bike industry could be more sophisticated, but trust me, we were calling and talking to people daily. You have to remember that everyone on the retail side of the phone was saying, if you get me a bike, I will sell it in days, no matter the cost.

My two cents on things that factored in:
1. Most companies in the industry have fewer people than you think working for them.
2. You often have an agent working in Asia. They can be a company employee, but they are just on contract for many.
3. You couldn't visit Taiwan or China for well over a year; the COVID restrictions were crazy. This meant you trusted people outside your company more than you should have.
4. Lead times went from 2-3 months to 9-12 months. Shipping times went from 1-2 months to 5-8 months. This meant your deposits went from 3-5 months to 12-15 months before you could earn any revenue from them, all while prices skyrocketed.
5. Often, 1-2 parts were unavailable, so you couldn't sell a $6,000 good because you didn't have something you paid for months ago. Often, this was a derailleur, cassette, or chain, but there were months in a row when a 20mm brake adapter didn't exist.
6. Much of the glut was caused by 5-6 large companies over purchasing. Many smaller companies increased purchases only at normal growth rates.

You had to have some faith in your partners' ability to deliver when they said they could. As you can imagine, things can spiral very quickly when you have 7-10 vendors you rely on per finished good, with most relying on Asian products during rolling COVID lockdowns.

I was working way more than 50 hours a week at times. It's a 14-hour difference to Taipei, so if I was skyping anyone, that was at 10-11pm...

[SchralphMacchio]

I can see how a smaller brand who was able to increase shipments during the wave would be thinking, “we are taking business away from big brand _____ and we can sustain this” in developing their purchasing forecasts. Or, in Kona’s case, new buyers at the top of the wave who want to push numbers to see their return pay off, without understanding any of the underlying market dynamics (obvious assumption, I have zero insight).

Sad to see brands both big and small committing too much cash at the tail end of the wave without a good conversion cycle, and at worse margins. What a junkshow of an era.

[stuckathuntermtn]

I'm still gutted about GG. I guess no one wants to do carbon in America unless it's fancy handlebars.

[Tailwind]

It's Canada but We Are One is the player here... I've complained about this before but the fact that people write them off for hub spacing and overlook that they're producing sweet carbon products in Canada, for substantially cheaper than big brands in overseas, is annoying.

Mountain bikers are a fickle bunch.

I'm still gutted about GG. I guess no one wants to do carbon in America unless it's fancy handlebars.

[frorider]

$4300 USD for the frame w/ shock is not cheap at all. GG was affordable.

[Tailwind]

GG had points where they would fire sale their bikes- which was a sign of financial duress - but agree even normal MSRP they were on the more affordable side of things. I remember their 'top tier builds' being in the mid $6000 range. Kona doing BOGO wasn't a sign of their value just like GG's sales last summer were not signs of value (looking at Spot's sale prices right now might give you a sense of their future).

We are One often does completes for around $7000... which with nice parts and carbon wheels is actually very very competitive compared to Yeti/SC/Specialized.

Currently they're $5600 for the 'rolling chassis'. Cobbling together drivetrain, brakes, dropper, saddle for $1000 is totally doable, so sub $7000 and you can have a really really nice bike.

Not 'affordable' and there are absolutely better deals out there... but it's North American made wheels, frame, bars and other nice parts... and they're still in business.

$4300 USD for the frame w/ shock is not cheap at all. GG was affordable.

[nickwm21]

I always thought the WAO “rolling chassis” was a symptom of the industry’s issues with part availability disguised as a “deal”.


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[Eluder]

I always thought the WAO “rolling chassis” was a symptom of the industry’s issues with part availability disguised as a “deal”.


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Or acknowledging that no one has Super Boost wheels to swap over.

[Meconium]

Dropped over to a local bike shop this afternoon after work. It was creepy quiet.

[One (+) Sentence]

Revel is a company I’m curious about.

Trendy, mostly consumer direct, quality is more B+ range so maybe a but cheaper to produce… but unsure of if they’ve hit a point where they’re profitable or still carving out at niche.

They did a “warehouse moving sale” a few months ago which made me wonder if they’re moving locally or further afield.

They are the type of company I want to stick around as they’re building bikes not just designed around winch and plummet PNW riding. We bought my wife a ranger on their Black Friday sale and it seems solid.

Sad to see Adam go. I’ve bumped into him a few times and he seems solid.

I have it from reliable sources that the vibe around Revel HQ today was positive.

[weibo]

Kona had me wondering in the fall, one of their endurance team riders is from town. He at one point stopped tagging Kona in his socials then he and another team guy rode mountain bikes at a gravel race. Then he rode and won a 24 with a mid range hard tail as his back up bike A week later the new Kona team announcements came out and the Enduramce Team was not mentioned anywhere. He announced he had been dropped a few weeks later and now has a new gravel sponsor and no mountain bike sponsor. This is also not some also ran, he is athe current and now 5 time world 24 hour champion as well as holding a few FKT's and has been good at promoting the brand for the 15 years he has been with them. Sad way to end a relationship.

[kootenayskier]

The bike industry has always been subject to oversupply from dilettantes playing at business. Add in a bunch of investors who somehow convinced themselves that the Covid sales bump would last, and you have a recipe for a major correction. Kona’s fate was set the moment it’s founders cashed out, now just a commodity that at this moment is worth a lot less than it was.

[Dee Hubbs]

Looks like Stages Power out of Boulder CO is next to be done:
Stages Cycling lays off entire workforce

[waxman]

Kona had me wondering in the fall, one of their endurance team riders is from town. He at one point stopped tagging Kona in his socials then he and another team guy rode mountain bikes at a gravel race. Then he rode and won a 24 with a mid range hard tail as his back up bike A week later the new Kona team announcements came out and the Enduramce Team was not mentioned anywhere. He announced he had been dropped a few weeks later and now has a new gravel sponsor and no mountain bike sponsor. This is also not some also ran, he is athe current and now 5 time world 24 hour champion as well as holding a few FKT's and has been good at promoting the brand for the 15 years he has been with them. Sad way to end a relationship.

5 time world 24hr champion? Without googling what's his name? There's a local rider here that has a similar claim to fame, been with a brand forever (we don't sell it, the store down the street does) talking with the other store owner the promotion of said brand by this athlete has led to a whopping zero sales locally.
How many Konas did you buy because of the 5x world champion?

[jamal]

I feel like Cory Wallace is pretty well known? Does a lot of other cool shit, good ig follow.

[toast2266]

How many Konas did you buy because of the 5x world champion?

I'm not sure that's really how marketing works.

[bennymac]

Yeah as far as his adventure riding and his racing results he seems like an ideal person and personality to have in a quiver of sponsored riders - far more interesting to me than the instagrams of the top DH or Enduro riders. I get to watch Richie Rude fly over a section of trail 6 times from different angles - but I’d rather check out what Himalayan peak Cory is riding over.

But I’m not in the industry and no I’ve not bought any Kona bikes from following him. I’ve also not bought any Yeti bikes from watching Rude.