Cannondale sold

[Bro Deal]

http://beta.velonews.com/article/71784

"Dorel (www.dorel.com), headquartered in Montréal, owns Pacific Cycles, the parent company of Schwinn, GT and Mongoose. The purchase is reported as an all-cash transaction valued between $190 million and $200 million."

Does not sound good.

 

[Bob Ross]

Does not sound good.

It does if you're Lebron James.

 

[Powerful Pete]

What will this mean for the continued existence of an independent Cannondale? Anyone know?

 

[Yojimbo_]

Why does this not sound good?

 

[Bro Deal]

Why does this not sound good?

The company started selling other brands it bought in Walmart, complete with the expected drop in quality.

 

[velo711]

It doesn't seem to hurt Rocky Mountain, which still makes quality bikes and is
enjoying good sales. A lot of smaller independent manafacturers are being bought by larger corporations. It seems it's just the nature of world global business.

 

[alienator]

It doesn't seem to hurt Rocky Mountain, which still makes quality bikes and is
enjoying good sales. A lot of smaller independent manafacturers are being bought by larger corporations. It seems it's just the nature of world global business.

Right, and it's unlikely to hurt Cannondale. They've got a strong brand identity, a strong position in both racing circles and in high end bikes. The purchase is likely to provide them more cash to do more things and maybe a more organized business structure.

 

[Bro Deal]

Right, and it's unlikely to hurt Cannondale. They've got a strong brand identity, a strong position in both racing circles and in high end bikes. The purchase is likely to provide them more cash to do more things and maybe a more organized business structure.

This depends entirely on what the buying company decides to do with their acquisition. The best case is that they use Cannondale as their high end brand and continue to sell it through independent bike shops and, as you say, the parent company provides them with financial and management stability.

The worst case is that the company milks Cannondale brand equity. They could lower costs (and quality), increasing profits, and push the brand into a lower end market, coasting on the brand's past perception. This is essentially what they did with Schwinn and Mongoose. I think those companies, certainly Schwinn, were in a lot worse condition that Cannondale though.

 

[TheDarkLord]

It doesn't seem to hurt Rocky Mountain, which still makes quality bikes and is
enjoying good sales. A lot of smaller independent manafacturers are being bought by larger corporations. It seems it's just the nature of world global business.

What is the relation between Rocky Mountain and these other companies? Also, when did Mongoose start going downhill? Is it after this bigger company acquired them? I gather that Mongoose made not-so-bad bikes at one point of time, but now they are more associated with cycles that are characterized as weapons of mass destruction.

 

[sogood]

This depends entirely on what the buying company decides to do with their acquisition. The best case is that they use Cannondale as their high end brand and continue to sell it through independent bike shops and, as you say, the parent company provides them with financial and management stability.

The worst case is that the company milks Cannondale brand equity. They could lower costs (and quality), increasing profits, and push the brand into a lower end market, coasting on the brand's past perception. This is essentially what they did with Schwinn and Mongoose. I think those companies, certainly Schwinn, were in a lot worse condition that Cannondale though.

Agreed. The aspect that Dorel being a mass merchant company suggests that the second scenario has a better than even chance. But let's hope scenario one will eventuate.

 

[Frigo's Luggage]

This could go either way. We might end up buying a Cannondale at Target. Or, if they were smart, they would use the Cannondale dealership network to re-establish Schwinn. The way I see it, there are only a few more years before the Schwinn name becomes utterly meaningless. If you were a kid in the 70s and early 80s, then Schwinn is a big name. You grow up in the late 80s or 90s, then you think of Schwinn as junk. The 70s and 80s folks are now buying bikes for their kids and might choose a Schwinn. The later generation won't buy a Schwinn for their kids unless the brand name is re-established.

 

[Scotttri]

I hope they do use it as a high bicycle. It's be a shame for them to drop there quality, especialy to anyone who already owns one of higher quality and one day wants to sell it.

 

[dangerousbiker]

that surely would have a great effect on it

 

[TheDarkLord]

that surely would have a great effect on it

What would have a great effect on what???