More on the Cannondale saga...



Status
Not open for further replies.
R

Ryan Cousineau

Guest
In article <[email protected]>, "Frank Knox"
<[email protected]> wrote:

> "Matt O'Toole" <[email protected]> wrote in message
> news:[email protected]...
> > MBA has a bit on the Cannondale saga, from the horse's mouth. Not much, but some--
> >
> > http://www.mbaction.com/detail.asp?id=642
> >
> > Matt O.
> >
> Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb. foreign-made
> "Cannondale" bikes sold in Target and Wal Mart next year!

Given that their bike business is outright profitable, there's a good chance this won't happen. The
reason Schwinn et al got turned into bike badges sold at Wal-Mart is because they were unsuccessful
at building good bikes for a profit.

Stranger things have happened, and it could be that someone like Trek or Pacific will buy
Cannondale, keep the high-end lines going, AND start selling Asian-made Cannondales in
department stores.

Can't wait to see a Lefty fork on a $200 bike,
--
Ryan Cousineau, [email protected] http://www.sfu.ca/~rcousine President, Fabrizio Mazzoleni Fan Club
 
M

Mike Jacoubowsk

Guest
> Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb. foreign-made
> "Cannondale" bikes sold
in
> Target and Wal Mart next year!

Unlikely. Department stores generally do best sticking to the absolute cheapest price point they
can find. There was a belief that the "Schwinn" name would allow them to bump up prices a bit, but
that has shown not to be the case; given the choice between a $60 no-brand vs a $70 Schwinn, even
in those cases where the Schwinn actually was a better bike, the customer has gone for the cheaper
bike. The problem is that there's nobody in a department store to actually explain to a customer
why one bike might be better than another, so virtually any premium over the basic bike falls flat
on its face.

(I assume, by the way, that the post was actually meant as a joke)

--Mike-- Chain Reaction Bicycles http://www.ChainReactionBicycles.com

"Frank Knox" <[email protected]> wrote in message
news:[email protected]...
>
> "Matt O'Toole" <[email protected]> wrote in message
> news:[email protected]...
> > MBA has a bit on the Cannondale saga, from the horse's mouth. Not much, but some--
> >
> > http://www.mbaction.com/detail.asp?id=642
> >
> > Matt O.
> >
> Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb. foreign-made
> "Cannondale" bikes sold
in
> Target and Wal Mart next year!
 
M

Mike Jacoubowsk

Guest
> Given that their bike business is outright profitable, there's a good chance this won't happen.

Look again. Their bike division was trending downward, developing losses just prior to the startup
of their motorcycle division. Their declining sales in the bicycle division since then make it
questionable just how "profitable" bikes are, and might lead one to question if, once the writing
was on the wall for the motorcycle division, it made sense to put as many expenditures as possible
on that side (a lost cause, so why not) and try to make the bike division look good.

The reality is that there are no bicycle manufacturers making significant profit in the bicycle
business, and only a few that are making any money at all.

Cannondale may yet rise from the ashes; it's not all that similar to Schwinn. Cannondale has a
devoted customer base, and a differentiated product (which has been both their strength and
weakness). But a buyer thinking that there's value in the name alone, slapped onto a Chinese-made
me-too bike, may be in for a surprise.

--Mike-- Chain Reaction Bicycles http://www.ChainReactionBicycles.com

"Ryan Cousineau" <[email protected]> wrote in message
news:[email protected]...
> In article <[email protected]>, "Frank Knox"
> <[email protected]> wrote:
>
> > "Matt O'Toole" <[email protected]> wrote in message
> > news:[email protected]...
> > > MBA has a bit on the Cannondale saga, from the horse's mouth. Not much, but some--
> > >
> > > http://www.mbaction.com/detail.asp?id=642
> > >
> > > Matt O.
> > >
> > Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb. foreign-made
> > "Cannondale" bikes sold
in
> > Target and Wal Mart next year!
>
> Given that their bike business is outright profitable, there's a good chance this won't happen.
> The reason Schwinn et al got turned into bike badges sold at Wal-Mart is because they were
> unsuccessful at building good bikes for a profit.
>
> Stranger things have happened, and it could be that someone like Trek or Pacific will buy
> Cannondale, keep the high-end lines going, AND start selling Asian-made Cannondales in
> department stores.
>
> Can't wait to see a Lefty fork on a $200 bike,
> --
> Ryan Cousineau, [email protected] http://www.sfu.ca/~rcousine President, Fabrizio Mazzoleni Fan Club
 
C

Chris Phillipo

Guest
In article <[email protected]>, [email protected] says...
> In article <[email protected]>, "Frank Knox"
> <[email protected]> wrote:
>
> > "Matt O'Toole" <[email protected]> wrote in message
> > news:[email protected]...
> > > MBA has a bit on the Cannondale saga, from the horse's mouth. Not much, but some--
> > >
> > > http://www.mbaction.com/detail.asp?id=642
> > >
> > > Matt O.
> > >
> > Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb. foreign-made
> > "Cannondale" bikes sold in Target and Wal Mart next year!
>
> Given that their bike business is outright profitable, there's a good chance this won't happen.
> The reason Schwinn et al got turned into bike badges sold at Wal-Mart is because they were
> unsuccessful at building good bikes for a profit.
>

That depends on if they had the foresight to seperate the two, I don't know the details on that but
hopefully they created two separate companies or else the profitable part will be paying the
creditors of the smoking hole in the ground part.
--
_________________________
Chris Phillipo - Cape Breton, Nova Scotia http://www.ramsays-online.com
 
D

Dave Cook

Guest
According to Cannondale, they are in the process of reorganizing. They have obtained the necessary
financial backing to do this and the end result will be a profitable bicycle company and no more
motorcycles. This came from the website of Bicycling Magazine las week.

"Chris Phillipo" <[email protected]> wrote in message
news:[email protected]...
> In article <[email protected]>, [email protected] says...
> > In article <[email protected]>, "Frank Knox"
> > <[email protected]> wrote:
> >
> > > "Matt O'Toole" <[email protected]> wrote in message
> > > news:[email protected]...
> > > > MBA has a bit on the Cannondale saga, from the horse's mouth. Not much, but some--
> > > >
> > > > http://www.mbaction.com/detail.asp?id=642
> > > >
> > > > Matt O.
> > > >
> > > Cannondale is being sold to the highest bidder? I hope we aren't going to see 40lb.
> > > foreign-made "Cannondale" bikes
sold in
> > > Target and Wal Mart next year!
> >
> > Given that their bike business is outright profitable, there's a good chance this won't happen.
> > The reason Schwinn et al got turned into bike badges sold at Wal-Mart is because they were
> > unsuccessful at building good bikes for a profit.
> >
>
> That depends on if they had the foresight to seperate the two, I don't know the details on that
> but hopefully they created two separate companies or else the profitable part will be paying the
> creditors of the smoking hole in the ground part.
> --
> _________________________
> Chris Phillipo - Cape Breton, Nova Scotia http://www.ramsays-online.com
 
B

Bluto

Guest
"Mike Jacoubowsky" <[email protected]> wrote:

> Cannondale may yet rise from the ashes; it's not all that similar to Schwinn. Cannondale has a
> devoted customer base, and a differentiated product (which has been both their strength and
> weakness). But a buyer thinking that there's value in the name alone, slapped onto a Chinese-made
> me-too bike, may be in for a surprise.

From where I stand, Cannondale's most valuable asset is their production line, which is the most
advanced example of automation in the business.

While the welding and finishing on Cannondale frames is done completely by hand, the
computer-controlled laser cutting and fixturing allow different sizes and types of frames to run in
an uninterrupted stream on the production line. This means no need for batch process of identical
frames, and it permits the facility to match production to the actual volumes ordered.

For a buyer of the company to discard the facility and production methods would be foolish in the
extreme. They could, I suppose, move the operation overseas, and the resulting frames would likely
be equal to the USA-made product.

The best thing that could possibly happen would be for the bike works to return to private
ownership, but that doesn't seem especially likely.

Chalo Colina
 
Status
Not open for further replies.