SSU insolvency and the bike industry generally

[Dee Hubbs]

Giant acquired Stages Cycling from bankruptcy.
When Stages was having finical difficulty Giant offered them $20m for 32.5%, and Stages refused the offer.
Then Giant sued them for $14m for unpaid invoices and for misuse of intellectual property rights. Industry insiders believe that this was the straw that broke the camels back, forcing Stages into bankruptcy.
Less than 6 months later they filed for bankruptcy, and Giant has now acquired the bankrupt company for $20m.
What a weird business this bike industry is.

[Benneke10]

Peak TPC was when they actually sold genuine pro team kit on eBay. I have some United Healtchare and Optum team bibs from 10 years ago that I still wear, probably paid $15 each. They’ve held up way better than fancy consumer grade cycling clothes I’ve owned

[One (+) Sentence]

Giant acquired Stages Cycling from bankruptcy.
When Stages was having finical difficulty Giant offered them $20m for 32.5%, and Stages refused the offer.
Then Giant sued them for $14m for unpaid invoices and for misuse of intellectual property rights. Industry insiders believe that this was the straw that broke the camels back, forcing Stages into bankruptcy.
Less than 6 months later they filed for bankruptcy, and Giant has now acquired the bankrupt company for $20m.
What a weird business this bike industry is.

Giant had made Stages excercise, peloton style bikes and were probably owed some money.

[One (+) Sentence]

Peak TPC was when they actually sold genuine pro team kit on eBay. I have some United Healtchare and Optum team bibs from 10 years ago that I still wear, probably paid $15 each. They’ve held up way better than fancy consumer grade cycling clothes I’ve owned

I remember paying $300 for some used Travis Brown chamois’. Ahhh, simpler times…

[mcski]

How many times did he use it?

[Iowagriz]

Travis' brown chamois?
Or
Travis Brown's chamois?

[Dantheman]

I’d bet that private equity somehow turned what in real terms is bad business into good business for themselves

Guaranteed that those guys structured the deal so that they made money no matter what.

[Benneke10]

I got some great used pieces from TPC but I only bought unused bibs. In hindsight I wish I had the nerve to stock on the used ones back in the day. I did pick up a pair of lightly used bibs from the Trek world tour team at a consignment shop for $20 a few years ago, money well spent.

[406]

Speaking of Ti, Lynskey has been having a fire sell the last few months. Road and gravel frames - all sizes for $850.. Hope things are ok over there...

I would guess Ti tubing is going to be much more expensive soon with the restrictions on Russian imports?

[EWG]

Giant had made Stages excercise, peloton style bikes and were probably owed some money.

That is my understanding.

[TAFKALVS]

I bought a bike from the TPC before prices got stupid and it was an awesome experience. Pretty sad to see. Honestly whoever signed off on buying bikes at the inflated prices they did should have been fired long ago… but in general how where people in the bike industry so stupid?

[XtrPickels]

I bought a bike from the TPC before prices got stupid and it was an awesome experience. Pretty sad to see. Honestly whoever signed off on buying bikes at the inflated prices they did should have been fired long ago… but in general how where people in the bike industry so stupid?

Having worked in the industry, I'd say that most people are in it for the "bikes" and not the "business".
They likely wouldn't make as business people outside of this niche.

[smmokan]

Having worked in the industry, I'd say that most people are in it for the "bikes" and not the "business".
They likely wouldn't make as business people outside of this niche.

Add to that the infusion of stupid VC money with the Pro's Closet, and it was a recipe for disaster. There were so many bad business decisions made with that company, and you could see the signs of desperation over the last 18 months.

[skaredshtles]

Having worked in the industry, I'd say that most people are in it for the "bikes" and not the "business".
They likely wouldn't make as business people outside of this niche.

You know the old saying:

How do you make a small fortune in the bike business? Start with a *large* fortune.

[mcski]

Ha! I just said this to a guy in the neighborhood that is selling his bike shop and asked me if I was interested in buying it.

[beaterdit]

Step #1 should be to keep the Trail Knee Pads in stock. Those things are hard to get.

Add to that the infusion of stupid VC money with the Pro's Closet, and it was a recipe for disaster. There were so many bad business decisions made with that company, and you could see the signs of desperation over the last 18 months.

Yep. Just posted this in that thread...

I don't work in finance or anything remotely related but even I and most people I know, as consumers, equate VC (scum) involvement with degraded product and/or service and most likely, demise of said product and/or service, all for a very small chance of explosive growth and survival. Easy for VC scum to play that game when they have eggs in many baskets, each representing small relative potential loss for them. For the business owner courting such funding though, how do they not see this? All their eggs are in the one basket that the VC DGAF about. It's one thing to cash out and exit/retire but if you want to keep your business and you're giving it your all, it's tall odds at succeeding in this model.

[SchralphMacchio]

Is Cleary joining the tumult?

[Canada1]

There is some you tube guy who pointed out "Why did they buy a huge warehouse"? I'd add to that, at Boulder Colorado Prices. I haven't lived there for a very long time, but back when we did, the real-estate was more pricey than anything else in Denver area, including Cherry Creek. Their model was portable. they probably could have pulled that off is alot of places where the lease or buy of commercial space was multiples less.

[Doremite]

Is Cleary joining the tumult?

Appears so. Bummer. I had a good run of 16-26” cleary rigs for my kids. Just grabbed a 50% off 26” Meerkat for my 8 year old who will be done with her 24” by Spring ‘25. Heavy but rolls great and I like the look of their bikes. Mostly just get around our pretty flat town, to/from school needs

https://www.clearybikes.com

[406]

Oh man, good prices, I need to find my oldest a 24", but looks like they sold out of those.

[Doremite]

Oh man, good prices, I need to find my oldest a 24", but looks like they sold out of those.

Does your oldest like pink??

[406]

Does your oldest like pink??

Yeah, she loves it....You selling a Scout or Meerkat? We would want the Scout.

[toast2266]

Yeah, good prices. Just grabbed a scout. Thanks for the heads up! Bummer they're folding. Kinda surprising, really. Simple bikes so no fancy tooling to get bored down in, and I see plenty of clearys around.

Sent from my SM-S901U using Tapatalk

[Doremite]

Yeah, she loves it....You selling a Scout or Meerkat? We would want the Scout.

Sorry, Meerkat.

That said I will likely have a 24” Prevelo Zulu Four up for grabs come Spring. Pink grips and pink pedals!

[SchralphMacchio]

I ordered a single speed Owl. My older kid is looking silly huge on her Ramones 14 (which is a pointlessly stupid bike unless you live in Whistler and your 3.5-4 year old has been hucking their balance bike off of everything since before they could walk and needs an appropriate fitting 14” bike with the stopping power of a race motorcycle). I wonder if she can skip 16. If not, friends have a couple of free Woom 16s they are giving me this weekend.

Big bummer about Cleary though.