Didn’t See That Coming- Trek Acquires Electra Bicycle Company

Josh,

Business is business but eventually all of the companies that are doing less than $10,000,000.00 in business will be swallowed up by the top 5 or 6 companies.

Soon all of the bikes will all look and feel the same. Do you like that? It will make cycling very boring.

Imagine if every car you saw was a Nissan Altima and a Toyota Camry. Nothing wrong with these cars. They drive well, last a long time but they are nothing special.

Just vanilla or milk toast.

Trek makes good bikes, but they have no soul, you know what I mean. Electra bikes are kinda different but they have character. I hope Trek doesn’t mess that up.

People keep talking about Trek demanding 100% Trek in all their stores, but that’s hasn’t been remotely the case in the eight years I’ve sold Trek bikes. What the DO insist on is that you buy a certain percentage of Trek and Bontrager products from them, in return for Gold or Platinum dealer status (which means a greater discount on Trek products, in return).

In my experience, this a win-win for Trek, who sells more of their stuff (duh), and local bike shops, who get a huge discount on mostly high quality merchandise that’s easy to sell. So basically, you buy lots of Bontrager bartape from Trek, you get a big discount, and make a better margin than you do on Cinelli. The only thing that sucks is that every damn year, they make you buy some number of their junky computers, which are inevitably failure prone and difficult to program.

And Dave, you are just wrong. There are literally HUNDREDS of bicycle companies out there who are in no way owned by the big boys and absolutely never will be, and it has been this way for decades. The irony in your statement is that, of course, is that the bulk of all bikes are made by a handful of companies, no matter what brand they say, yet we all know that a Trek and a Giant ride totally different, despite being made in the exact same factory.

Prediction: TrElectra Fat Cargo Bikes with dynamo-hub-powered smugness inflators

^^Agree with Dave. Then dealers claim to “sell” Intense, Pivot, Santa Cruz, etc. but other than a 3 year old frame on the back wall collecting dust none are to be seen. When a Trek dealer owes Trek $200K in 3 weeks mid season, they keep trying to sell me a shitty Trek (or Specialized) instead of the cool bike I want.

There is a disproportionately large amount of interest and hate for the near death of a boring cruiser bike brand. No one that visits this site should even know what kind of bikes they make/made.
I am shocked that both people affected by this takeover are bikerumor regulars.

Electra was up for sale over six months ago. I had hoped dorel or accel would grab it. Sad to see it go to trek, who I am sure will quickly move it to trek stores, and away from ibds that have supported the brand for many years.
Interesting side note: Electra sued trek over the flat foot tech over two years ago.
http://www.bicycleretailer.com/north-america/2011/01/25/electra-files-patent-infringement-suit#.UsuO83-9KSM
And now trek owns them completely. Hooray.
My outside Electra reps lost their accounts today. Happy new year.
Typx- they didn’t dwindle those lines, they stopped making them to avoid continuing to send Electra a check.

And I don’t know about treks current business agreements with shops, but they came to us- a longtime trek store- and said 80% trek or nothing. We said F off, and a trek store opened a year later a mile away. And now a specialized store a mile another way, and a giant store a mile another way…..all following the trek business plan….

Graves,

You and i both know it is not as easy as that. Here is a situation that is not uncommon. Good shop in a medium sized market does say 1 million (retail) in sales a year. So product cost is $500K if everything averages 50% margin. Now the anchor brand (and I am not picking on Trek) to be an A level dealer (top level) is say a commitment of $300K (wholesale) a year. As you are a Trek dealer if I am way off please let me know. Of course you want to be an A level dealer so that no other Trek dealers will open close to you.

Ok so you now have say 200K open to buy dollars for all of your other product lines. Shops that want to offer at least 2 competing lines per category have maybe $100K to spend on these lines. What I mean buy this is say road bikes. You want to offer a boutique road line say like Colnago and a mid sized line like Orbea for example to give your customers a comparison against Trek. Again these are just examples that I can think of. They may or may not be the best examples.

So you have covered road which still leaves open mountain, lifestyle, and maybe bmx. How many bikes do you really think you can buy from these other brands while still having to cover what you have to buy from Trek.

This all does not include accessories and soft goods which you are now required to buy from your anchor brand if you want to or not because your anchor brand makes much more margin on the accessories and soft goods that they sell you than they ever did on the bikes.

So again your open to buy dollars keep shrinking and shrinking. They will tell you that you are not required to buy all of these categories but if you do not their is a very good chance a new dealer will pop up close to you selling the same anchor brand you are selling because the new shop promised they can for sure buy what is required to be that A level dealer.

As you say there are a lot of choices out there but only if you can choose them.

I understand how business works and all of these top 5 companies want to be #1. BTW the top 3 cover 80% of the market and they still want more.

The casual customer buys these brands not always because they are the best but that is all they know. Because if all that shops can put in their stores what they are told to put in their stores customers do not see all of the choices that they might have.

I have said this many times. Grow our riding population in the USA to 200 million or so versus the 45 million that currently ride bikes and there will be plenty to go around.

dave speaks the truth.

A-Ron, thank you for keeping the cycling elitist description alive. I’m surprised a cruiser thread is worthy of your superior comments.

Big companies buy small ones all the time. Even though I don’t like what Trek has done to smaller brands in the past, it’s simply business.

Electra owns 40% of the comfort bike sales. Trek is the next largest at 20%. This the reason bought them. They did not buy them to close them down. The thing with Bontrager Klein or fisher is that they all were in distress. Electra was not in distress. This will add value to Trek. I believe some if the trek models will go away and become Electra models. Has a trek dealer I am very excited. We never carried Electra before because of shipping cost, not very great terms, and a rep we saw maybe once a year. This is going to be great.

I do what I can in the hopes of having choice beyond Trek and (especially) Specialized.