Trek Purchases Electra Bike Company

Trek has been known to acquire companies along they way. When they see smaller companies like Bontrager, Klein, Lemond, and Gary Fisher doing big things, rather than purchase them and put them out of business, the Trek method has been to continue to operate said businesses as normal, but to use the Trek supply chain and resources to grow the brands even further. That seems to be the case with their latest acquisition of Electra Bicycles – one of the leading companies in life style cycling, and the company that really championed Flat Foot Technology (geometry that allows flat feet on the ground when stopped).

Electra president Skip Hess mentioned, “We’re thrilled to have a great new partner in Trek. “It’s going to give us the resources to grow the Electra brand and get more people everywhere riding and loving Electra.” The Electra brand will continue to operate out of its Vista, California head quarters with Skip at the helm. What will this do to the current line of Trek comfort and hybrid bikes? Only time will tell.

More after the break.

From Trek:

Move combines the bike industry’s leading performance and lifestyle bike brands

(Waterloo, WI/Vista, CA) – Trek Bicycle has acquired the Electra Bicycle Company in a move that joins the bicycle industry’s leading performance brand with the most popular name in lifestyle cycling. Joining the Trek family provides Electra with business and logistical support as well as distribution assets that will ensure the growth of the brand.

“I have always admired the Electra Brand, said Trek president John Burke. “Skip and his team have done some amazing things with limited resources. Trek will be able to provide financial, supply chain, distribution, and sales support that will help Electra take its business to the next level and will stay out of their way when it comes to product and marketing.”

“We’re thrilled to have a great new partner in Trek,” said Electra president Skip Hess. “It’s going to give us the resources to grow the Electra brand and get more people everywhere riding and loving Electra.”

The Electra brand will continue to be managed and marketed at its headquarters in Vista, California.

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Shawn Moore
8 years ago

“When they see smaller companies like Bontrager, Klein, Lemond, and Gary Fisher doing big things, rather than purchase them and put them out of business, the Trek method has been to continue to operate said businesses as normal, but to use the Trek supply chain and resources to grow the brands even further.”

Except in the case of Bontrager, Klein, Lemond, and Gary Fisher, 3 of which no longer exist and 1 is a shadow of its former bike manufacturing self.

SYJ
SYJ
8 years ago

“rather than purchase them and put them out of business, the Trek method has been to continue to operate said businesses as normal, but to use the Trek supply chain and resources to grow the brands even further”

And then…put them out of business.

Bill
Bill
8 years ago

Personally, I think it’s great. Trek puts a lot of effort into the commuter/comfort/townie type bikes, and Electra has it nailed. This will allow them to take all that energy wasted and focus on what they’re good at, which is racing bikes.

1speedlos
1speedlos
8 years ago

Huh. Interesting. The shop where I currently work is an Electra dealer, along with Cannondale and Specialized. I doubt this will make a huge difference, since we carry Trek at one of our other 2 shops, but I think it’ll impact non-Trek dealers the same way their purchase affected Gary Fisher, Bontrager, LeMond, and Klein dealers in the ’90s.
My first shop was a Gary Fisher dealer, second was a Bontrager dealer, both right before the purchase. Seeing what Trek did to these companies was, well, eye opening. Lo these many years, I’ve come to understand just how much of a business Trek runs. The idea that the bike industry is all about warm hugs and unicorn farts has been gone for me for a looong time.

Freddy
Freddy
8 years ago

From Trek’s dealer FAQ

Q: What will happen with the current Electra retailer network?
A: The existing Electra retailer base will remain intact.

We’ll see for how long though.

mtbrider
mtbrider
8 years ago

Electra president Skip Hess mentioned, “…,” said Electra president Skip Hess.

Well written there guys.

Mario
Mario
8 years ago

I think you should use the word Electra more, I almost missed that this story was about Electra. Electra

Dave
Dave
8 years ago

What will happen to the current Electra reps? Have they been let go? And will he current Trek reps now also be the new Electra reps?

A.
A.
8 years ago

WTF?! F%$#@ Trek.

Paul
Paul
8 years ago

Does this mean that you know must now buy your Electras from a TREK dealer?

Koorenkip
Koorenkip
8 years ago

“When they see smaller companies like Bontrager, Klein, Lemond, and Gary Fisher doing big things, rather than purchase them and put them out of business, the Trek method has been to continue to operate said businesses as normal, but to use the Trek supply chain and resources to grow the brands even further.”

Well written, sarcasm all over the place!

haromania
haromania
8 years ago

No doubt this is tied to the booming fat bike market and Trek will now start to sell electric fat bikes 🙂

Josh
Josh
8 years ago

Wow I never knew that people on here hated how modern day business works.

You guys must all be communists.

trekdealer
trekdealer
8 years ago

Dave: Trek reps will now be the Electra Reps. Paul: For now current dealers will remain Electra dealers. Trek dealers will have options to carry the bikes.

I do think do will see alot more mergers this year. Very hard for the smaller brands to go up against the largers brands with health care, insurance, buildings, and people cost going up every year.

Now I hope Trek will just get a BMX Race brand!!

Don
Don
8 years ago

I am stunned as is all the sales reps that just lost their jobs. They created the network provided the support…really built the brand in the field. Their ample reward from Trek is to be put to pasture. I remember how dealers were treated back in early 2000 when they were to carry 100% Trek or be terminated. Seems like the same leadership, same disaster for Electra dealers. Death to the dealer that doen’t carry 100% Intrepid brand.

mike
mike
8 years ago

I was always under the impression that Trek had something to do with Electra anyway. My assumptions may have been correct and now Trek officially has full owner ship of the company. The Trek Philosophy with gobbling up brands goes right back to the old day’s of Raleigh. How Many British brands did they buy and operate for a period of time before being killed off?

Andy
8 years ago

“Except in the case of Bontrager, Klein, Lemond, and Gary Fisher, 3 of which no longer exist and 1 is a shadow of its former bike manufacturing self.”

This.

someguy
someguy
8 years ago

Listen to any interview from Bontrager. He admits his brand was having issues selling steel bikes when everything else was going carbon and aluminum. He sold to Trek willingly so he could focus on components which were his passion anyway.

TheZap
TheZap
8 years ago

“Except in the case of Bontrager, Klein, Lemond, and Gary Fisher, 3 of which no longer exist and 1 is a shadow of its former bike manufacturing self.”

To be fair, those guys probably wouldn’t be around now anyway, even if Trek hadn’t bought them out.

And WTF is haromania talking about? This has nothing to do with fat bikes.

AlanM
AlanM
8 years ago

@A., why are you so pissed at Trek for buying Electra? You know Electra didn’t have to choose to sell, right?

someguy
someguy
8 years ago

Same goes for Fisher/Klein/Lemond/Bontrager

Graves
Graves
8 years ago

To be fair, Trek never acquired LeMond, just licensed it.

I don’t understand this move at all. I feel like the market for Electras is saturated, and they don’t offer anything significant that Trek couldn’t make themselves. Not even a dealer network.

Goodnight Electra.

Thatguy
Thatguy
8 years ago

I actually was on a phone call this morning and all the electra reps were fired. Blows big time.

TheZap
TheZap
8 years ago

@Don

If what you said were true, then every Trek dealer would basically be a concept store, which isn’t the case. I’ve seen Treks alongside the other brands in plenty of bike shops.

mudrock
mudrock
8 years ago

Trek has been demanding brand integration at the dealer level in my town, and most other places I’m sure. We had a great shop that sold Lemond along with Felt Bianchi etc. and when Trek demanded that he sell Trek brands exclusively or lose Lemond he told them to kiss off. Electra dealers, be forewarned.

Rich
Rich
8 years ago

Unlike the other brands trek has purchased, Electra isn’t failing. Electra also has more dealers then trek does as they are carried by sporting goods chains also like sport Chalet and rei. It doesn’t make business sense to lay off all of electras reps and employees because you still need them for all the accounts that trek can’t deal with

Rico
Rico
8 years ago

The Bike Borg on the Microsoft business model.

Dave
Dave
8 years ago

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.

Topmounter
Topmounter
8 years ago

Writing, meet wall.

Good luck Skip.

Peatbog
8 years ago

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.

X
X
8 years ago

This is a good move for Trek. I own a Madone 5.2, and it DOES muck up their branding by having the hybrid FX series branded Trek like the Project One and Radioshack team bikes. Trek is positioned as a race bike, and they’ll do well to expand into coaster bikes with an established brand that is separate. Maybe we’ll see Trek Electra Townie” bikes in a couple years?

Ultimately, good bikes are built by good companies, and big companies can make some dreams easier to realise – Surly has been left flatfooted in the fatbike market with changing rear hub standards and they build steel bikes – it shouldn’t be too hard to weld up a few prototypes to adapt… Trek, Giant and Merida have the R&D and cash to do more, and that’s why they are where they are – huge. If they swallow up players like Surly or Electra, then that’s life. If you want a brand, not a bike, you are no different to the Pinarello or Colnago crowd, just a smaller budget.

Graves
Graves
8 years ago

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.

Psi Squared
Psi Squared
8 years ago

Every store I’ve been in that has sold Treks has also sold other makes. This includes stores in several states.

It’d be interesting to hear Electra’s reasoning for the sale. That might render some of the assumptions made here invalid. I mean I know everyone posting here is an industry insider and an industry expert with a perfect record of assumption accuracy, but despite such weighty evidence and testimony, it’d still be interesting to hear from the relevant people….you know: the people actually involved with the day-to-day business and the sale of Electra.

WilsonH
WilsonH
8 years ago

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

Dave
Dave
8 years ago

Graves,

One thing that you miss is that these brands suck up so much floor space and open to buy dollars that dealers cannot bring in other brands because of the commitments to these large brands. This leaves the smaller brands out in the cold. Sooner or later these brands will start to fade away.

Again I do not question the moves of Trek or Electra but there are less and less true IBD stores today. Most are 50% to 70% of a single company calling the shots.

This though is something that dealers can control but many of them feel that they need these anchor brands to survive so many do not know how to say no because of fear that these brands will go else were.

Ray
Ray
8 years ago

^^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.

Graves
Graves
8 years ago

Dave, my point is that dealers can choose to carry a lot of Trek, or a little. Very, very few carry a little, and it’s not because Trek bullied them into carrying it.

Ultimately, consumers are making the decision, and if they stop buying Trek’s tomorrow, they’ll be out of shops in no time. It’s not as though there are no other options.

A-Ron
A-Ron
8 years ago

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.

typx
typx
8 years ago

Trek has been dwindling their cruiser models over the last 2 years. This move makes a ton of sense if they want to move into that part of the market. Electra carries weight as a name, just as Gary Fisher does. That is why Trek continued to make Gary Fisher specific bikes and then slowly started putting the Trek logo where GF used to be. It was done in a respectful and timely manner. What’s the big deal?

Squirrel
Squirrel
8 years ago

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….

Bikehoarder6
Bikehoarder6
8 years ago

I have 2 Electra Townie 24 speed bikes. I bought the second one as a back-up in case the first one gets stolen or something. The Townie is such a pleasure to ride that I have often thought that it will be the last “upright bike” I will ever buy. The standard diamond frame/wedgie configuration is just too uncomfortable for me anymore. Kudos to Electra for making the Townie! I wish them everlasting success and a heartfelt “Thank you”! for making the most comfortable bike to ride outside of a recumbent.

Roadies and “Bike Borg” conformists; you may now dispense your hate….

Dave
Dave
8 years ago

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.

Psi Squared
Psi Squared
8 years ago

A-Ron, there are people that just like bikes, no matter what the bike type is. Those people are real cyclists, too, and deserve the same amount of respect that any other cyclist deserves.

casey
casey
8 years ago

dave speaks the truth.

Cohen
Cohen
8 years ago

@ Shawn Moore

“Except in the case of Bontrager, Klein, Lemond, and Gary Fisher, 3 of which no longer exist and 1 is a shadow of its former bike manufacturing self.”

Not entirely true. Trek’s entire aftermarket is Bontrager, they just don’t build the bike frames anymore. Gary Fisher still designs his own bicycles as Trek, he still has a complete line and signature bicycles.

Klein and Lemond are out of business indeed, but they weren’t really doing anything different from Trek’s own. Trek also aquired Diamant, a German bike brand years ago and they still have a big share in the German market and are doing better then ever.

The Conductor
The Conductor
8 years ago

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.

What?
What?
8 years ago

Dave nailed it!

Trek dealer
Trek dealer
8 years ago

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.

MikeC
MikeC
8 years ago

@trekdealer re: “BMX race bikes”

Mirraco doesn’t count? Or do they not make true BMX race bikes?

@ Squirrel: Trek still lists the Pure bike line — the ones which Electra sued them about — for 2014. The lawsuit was not the end of that line or Trek’s own brand of feet forward positioning. They just changed the design to a seat tube with a dramatic curve in the bottom so that technically the BB was still feet forward, but also at the bottom of the seattube and not, in effect, somewhere forward of the bb along the downtube.

My guess would be that you see the Electra Verse line of bikes go away, the Trek District Steel and will become an Electra, the Cocoa will go away in favor of the Amsterdams, and Trek will use the Electra brand to launch something similar to Specialized’s Globe line of urban bikes.

Topmounter
Topmounter
8 years ago

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