Bicycle Retailer

Bicycle Retailer Latest News and Information

11 July 2020

  • Updated tariff timeline: How we got here
    UPDATED Sept. 11, 2019

    BOULDER, Colo. (BRAIN) — Tariff news is piling up on the industry, making heads swirl from Washington to Long Beach to Boulder.

    To help you, and us, keep track, we have prepared a timeline, below. We'll have to keep updating the timeline as things develop. If you have a question, shoot it over to BRAIN’s Steve Frothingham at Sfrothingham@bicycleretailer.com or leave a comment.

    Pre-existing tariffs

    During the Kennedy administration the import duty on bikes was 30%. But in recent years most complete bikes have been subject to an 11% tariff; the rate for most road bikes is half that. Before the new Section 301 tariff imposed last year (see below), e-bikes had no tariff.

    Parts and accessories are generally subject to tariffs between 0-10%. The tariff on pedals, for example, is 8%, while that on pumps is 3.7%. 

    All the new and proposed tariffs in the news in the last year are in addition to the pre-existing tariffs. So for example the new 25% tariff on Chinese bikes, made official this month, is on top of the 11% tariff most bikes already are subject to, for a total of 36%.

    Many missed the news in September 2018, but there was a tariff reduction that month. President Donald Trump signed the Miscellaneous Tariff Bill Act of 2018, which reduced some of these underlying tariffs (in imports from all countries, not just China) without affecting the new Section 301 or Section 232 tariffs. For example, the bill lowered the rate on disc brakes from 10% to 7.5%, and the rate for unicycles went from 3.7% to 0%. It also slightly reduced the tariffs on some cycling shoes. There's more on the MTB on the PeopleForBikes website.

    New and proposed tariffs, in chronological order:


    The U.S. tariff on steel and aluminum

    Applies to: U.S. imports of raw steel and aluminum from most countries
    Rate: 25% on steel, 10% aluminum
    Date proposed: March 8, 2018
    Date applied: March 23, 2018
    Type of tariff: Section 232, related to national security. (There's more on Section 232 tariffs on the Department of Commerce site)

    Annual import value of products, 2018: $40 billion
    Notable exclusions: Steel from Argentina, Australia, Brazil, and South Korea (Argentina, Brazil and South Korea are limited by import quotas); aluminum from Argentina and Australia (Argentina limited by quota). Under NAFTA, Canadian and Mexican materials were exempt until May 31, 2018.
    Impact on our industry: Many U.S. manufacturers tell BRAIN that material costs — even for U.S. made steel and aluminum - have increased significantly. This put them at a disadvantage relative to foreign manufacturers, because only the materials, not completed products, are subject to this tariff. Some U.S. manufacturers favored an increase in tariffs on completed products because it helped reduce that disparity. 
    Status: Mexico and Canada continue to negotiate new trade agreements in hopes of eliminating the tariffs; with a Canada/US deal announced on May 17. The EU and the U.S. also continue to negotiate on this and other trade issues.
    Retaliation: Canada, Mexico, and the European Union each enacted retaliatory measures.

    Section 301, List 1 (GPS and bearings)

    Applies to: U.S. imports of a wide array of Chinese products, including GPS bike computers and ball bearings
    Rate: 25%
    Previous tariffs: GPS: 0%; Bearings: 4-10% depending on type.
    Date proposed: April 6, 2018
    Date enacted: July 6, 2018
    Type of tariff: Section 301 (More on Section 301 on the USTR website)
    Annual import value of all List 1 products, 2018: List 1 represented $34 billion in imports, out of an original proposal of $50 billion. List 2 (below) made up the $16 billion difference.

    Impact on our industry: Caused some GPS makers to move production out of China, usually to Taiwan. Raised costs of U.S.-made components that include Chinese-made bearings, and replacement bearings. Caused some bearing suppliers to move production or assembly out of China.
    Retaliation: China announced its own list of U.S. goods subject to new tariffs.
    Status: Still in place.

    Section 301, List 2 (Chinese e-bikes and motors)

    Applies to: An array of Chinese products, including e-bikes and e-bike motors.
    Tariff rate: 25%
    Previous tariff on e-bikes: 0%
    Type of tariff: Section 301
    Annual import value of all List 2 products, 2018: $16 billion
    Date proposed: June 20, 2018
    Date applied: Aug. 23, 2018

    Impact on our industry: Several manufacturers, including Trek and Pedego, testified against the proposal in Washington. The tariff had more effect on lower-priced e-bikes sold online and other channels. Sales statistics show the e-bike remained the fastest growing segment in the industry, despite the tariffs.
    Retaliation: China announced a second round of U.S. goods subject to retaliatory tariffs.
    Status: Still in place. Bike trade groups and brands requested exemptions, but the USTR denied those requests in January.

    Section 301, List 3 (Chinese bikes, parts and accessories)

    Applies to: Wide array of Chinese products, including most complete bikes and bike parts and accessories, plus other items the bike industry uses and sells, like tools and water bottles. 
    Notable exceptions: Helmets and lights were exempted for safety reasons. Cycling apparel and shoes also are not included. A variety of bike parts and accessories that are not elsewhere specified or included in the HTS import codes (NESOI, in importer jargon) fall under the 8714.99.8000 code. That code was NOT included in this round, but items under that code are subject to a pre-existing 10% duty. This includes about 40 types of products, including pump clips, bike radios and horns, kickstands, wide-angle reflectors, seatposts, toe clips, spoke reflectors and more. HTS 8714.99.8000 is included in List 4 (see below).
    Tariff rate: 10% starting September 2018, was set to increase to 25% on Jan. 1, 2019, but the increase was delayed. Now set to increase to 25% on imports that arrive after June 1.
    Previous tariffs: The 10% and 25% tariffs are in addition to existing tariffs on bike products, discussed above.
    Type of tariff: Section 301
    Annual import value of all products on List 3, 2018: $200 billion.
    Date proposed: July 17, 2018
    Date applied: 10% took effect Sept. 24, 2018. It increased to 25% on May 10, 2019, applying to imports that arrive after June 1.

    Despite the notable exceptions, this is a big, wide ranging list of bike stuff.

    Impact on our industry: Despite the notable exceptions mentioned above, this is a big, wide ranging list of bike stuff. Evidence: In 2018 the bike industry imported at least $1.1 billion in products on this list from China, representing half the industry’s imports. Since September, the 10% tariff has led to wholesale price increases of around 5% on these products, retailers said. Suppliers tell us efforts to re-source products and the uncertainty has been costly. The increase to 25% is expected to cause significant wholesale and retail price increases.
    Retaliation: China is running out of U.S. imports to hit with new tariffs in response. After the U.S.’s 10% increase in September, China announced new tariffs of 5-10% on $60 billion in U.S. exports to the country, including agriculture products and natural gas. After the announced increase to 25% in May, China said it would increase tariffs on $60 billion in other U.S. imports on June 1.
    Status: Negotiations continue.

    Section 301, List 4 — (Almost everything else from China)

    Applies to: U.S. imports of Chinese goods, including most or all of the bike products not included in List 2 or List 3.
    Tariff rate: up to 25%
    Type of tariff: Section 301
    Annual import value of all products on List 4, 2018: $300 billion.
    Date proposed: May 13, 2019
    Date to be enacted: Any time after June 24 in any amount up to 25%, on top of the regular rate of duty.

    Impact on our industry: Adds in most or all bike-related items that were not in List 3, including lights, helmets, unspecified parts and accessories, apparel and footwear. The industry is planning to submit requests to exclude bicycle products from this round of tariffs.

    Status: A public hearing was held June 17 at which the bicycle industry was represented. On June 29, at the G20 summit in Japan, Trump said he and Chinese President Xi had agreed to a truce and that the U.S. would not impose the new tariff on List 4. On August 1, Trump said Xi had not followed through in promises made in June and said List 4 would be hit with a 10% tariff on Sept. 1

    Status update Aug. 13, 2019: Trump announced that some products on List 4 will get a holiday shopping season reprieve and not get hit with the new tariff until Dec. 15. That included cell phones, laptops — and balance bikes. However, all other bike products on List 4 were set to still receive the 10% tariff on Sept. 1. That included helmets and lights, which were exempt from previous rounds for safety reasons. 

    Status update Aug. 30, 2019: The USTR announced the new tariff on List 4 would be 15%, not 10%, after China announced retaliatory measures. The 15% would be imposed on List 4a on Sept. 1 and List 4b on Dec. 15. The USTR also said the 25% tariff on Lists 1,2, and 3 would increase to 30% on Oct. 1, 2019.

    Status update Sept. 11, 2019: Trump tweeted that the increase on Oct. 1 would be delayed until Oct. 15 as a good will gesture.  

    Section 301, EU list

    Applies to: U.S. imports of products from the European Union, including some bike products.
    Tariff rate: Up to 100%
    Type of tariff: Section 301
    Annual import value of all products, 2018: $11.5 billion
    Date proposed: April 8, 2019
    Public hearing: May 15-16, 2019

    Impact on our industry: Applies to imports of EU parts, including sprockets and hubs.
    Retaliation: The EU has proposed retaliation that would include some sprockets and hubs from the U.S.
    Status: Matt Moore, representing the BPSA, was scheduled to speak at a public hearing about this proposal on Thursday, May 16. Comments were being accepted until May 28 at regulations.gov/docket?D=USTR-2019-0003.

    Editor's note: We've corrected our reference to the import duty on bikes during the Kennedy administration. The correct figure is 30%, not 50% as we had said. Thanks to James Longhurst, Ph.D., an associate professor in the history department at the University of Wisconsin La Crosse for nicely pointing out our mistake. 

     

  • Kitsbow CEO addresses Congress about pivot to PPE
    A House subcommittee hears testimony from business owners about ways to improve supply chain resiliency during the COVID-19 pandemic.

    WASHINGTON (BRAIN) — As the lone representative of not only the cycling industry but the entire outdoor industry, David Billstrom admitted to feeling some pressure addressing Congress on July 2.

    Billstrom, CEO of Kitsbow Cycling Apparel, testified virtually from his North Carolina home to the House Small Business Committee Subcommittee on Economic Growth, Tax, and Capital Access. The reason was to hear from small business owners and experts about the impact of the COVID-19 pandemic on supply chains. It hopes to uncover ways to sustain small businesses and explore potential solutions on how to improve supply chain resiliency during the pandemic.

    In addition to Billstrom, the subcommittee heard from Dr. Eswar Prasad, professor of trade policy at Cornell University; Christine Fagnani, co-owner and vice president of Lynn Medical Instrumentation in Wixom, Michigan; and Sheila Lawson of RL Hudson Manufacturing in Broken Arrow, Oklahoma. 

    Each person had five minutes to give a statement before being asked follow-up questions. So there was no time for filibustering when it was Billstrom’s turn.

    “Frankly, I'm not sure if I contributed effectively, but I'd like to think that it was helpful to our representatives to hear specific, actionable requests from asmall business of about 50 employees,” said Billstrom, who also provided the subcommittee a 26-page written overview of Kitsbow’s pandemic pivot. “Testimony is often from large corporations and other obvious leaders in the business world, while 40% of job creations are from small businesses. Or in other words, I hope I kept the issues real.”

    The subcommittee wanted to “hear inspiring stories of adaptability,” said Rep. Brad Schneider (D-Illinois) before testimony began. Kitsbow’s story caught the committee’s attention after making a manufacturing shift in mid-March when personal protection equipment was in dire need. Kitsbow switched from manufacturing jerseys and shorts to face shields and face masks for first-responders.

    “I don't really know (how the subcommittee heard about Kitsbow),” Billstrom said. “The chairman of the subcommittee (Rep. Andy Kim, D-New Jersey) asked his staff to reach out to me, after he personally heard about Kitsbow somehow. Perhaps Rep. Kim reads BRAIN?”

    Billstrom, while admitting he’s somewhat cynical about national change, said he was proud to testify and has optimism about the future.

    “Not because the hearing will change anything, but because it is so obvious to so many that the supply chain needs change,” he said. “For instance, prior to the pandemic, how many people even knew what supply chain meant and why a domestic supply chain is vital to small businesses, job creation, and our economy?”

    Kitsbow has weathered its supply chain issue by getting help locally and statewide from companies like Industry Nine, Sylvan Sports, Carolina Textile District, SEAMS, N.C. State University, a New Hampshire product rep, and many others, Billstrom said.

    “I also want to point out that Kitsbow's experience during the pandemic has been both profoundly frustrating, but also representative of the best intentions of many people in our country,” he said. “People helped to source material without questioning our motives, or needs. That bodes very well for change.”

    Accordingly, Kitsbow, which marked its 110th day of PPE manufacturing on July 8 and now sells masks to the public, has adapted without hesitation during turbulent times, Billstrom said.

     “Above all, we've got some brave folks living and working in Western North Carolina, willing to do whatever it takes,” he said. “The team here really did this, and none of us will forget the power of that teamwork. I see it still, as we continue to evolve both our response to the pandemic and start to make clothes again. Our visibility with the pandemic helped us recruit more skilled sewers and suppliers capable of being part of our local supply chain emerged. We're now using fabric from a mill about 20 minutes drive from here (Old Fort). Before the pandemic, we didn't even know they existed. There are five more stories like that.”

  • QBP to offer Teravail tires online, sharing revenue with enrolled dealers in new program

    BLOOMINGTON, Minn. (BRAIN) — Quality Bicycle Products is now selling its house brand Teravail tires direct to consumers via the brand's website, and sharing some revenue from each sale with nearby dealers who are enrolled in its Dealer Choice program for Teravail.

    The company said it plans to expand the new direct-to-consumer program, called Supplier Transaction Services, to more of its house brands and other brands.

    "STS is part of the portfolio of services that we offer our business partners to meet their customers where and how they want to transact, using a structure that benefits both retailers and suppliers," said Rich Tauer, the president of QBP.

    "Some customers want to see and buy products in a physical store. Some want to shop on a retailer's website, while others want to shop on a brand's website. STS is another option we offer our partners that provides a path to purchase for consumers, and that supports retailer and supplier partners."

    Retailers enrolled in the Teravail Dealer's Choice program, Tiers 1, 2 anord 3 will share revenue from STS sales without any additional cost or action required.

    QBP said STS is "a long-term strategy for brands to utilize multi-channel services that meet consumer shopping needs."

    QBP brand websites like Teravail.com will offer consumers the option to Buy/Add to Cart or Buy Local, which directs them to a retailer.

  • Specialized begins equipment sales through Backcountry.com/Competitive Cyclist

    MORGAN HILL, Calif. (BRAIN) — Specialized has told its dealers that it will begin sales of equipment, but not bikes or frames, through Backcountry.com and its cycling-specific site, CompetitiveCyclist.com.

    Jesse Porter, the company's U.S. business development leader, told dealers in an email June 24 that it would begin sales through the sites in early July. 

    The email subject line was "New Partnerships for a Seamless Rider Journey" and Porter noted in the email that all Specialized dealers can now sell equipment and frames online and that Specialized has invested in more omnichannel tools for its retailers, including lead generation, enhanced store pick-up and drop-ship programs, a home delivery pilot program for dealers, and website providers partnerships. 

    The email continued, "To be where riders want to interact and transact, Specialized has to always partner with the most premium retailers. It has been proven that by partnering with the best Ecommerce retailers, the demand for products increases in the market. With that said, Specialized will be partnering with Backcountry.com and Competitivecyclist.com with equipment only."

    A company spokesman said Specialized would have no further comment to BRAIN regarding the Backcountry news. "We don’t normally make a statement when we open a new retailer, which in many ways is what they will be," said Sam Benedict, Specialized's USA leader for marketing, category and go-to-market.

  • Industry receives at least $40 million in PPP loans
    SBA program supported at least 1,500 jobs at retail, supplier and nonprofit organizations.

    AUSTIN, Texas (BRAIN) — Bike shops, suppliers and nonprofits across the industry — along with thousands of employees — have benefitted from the Paycheck Protection Program, which provides forgivable loans for organizations that maintain payroll during the COVID-19 pandemic.

    At least 136 bike-related companies and 14 nonprofit organizations received PPP loans, helping save nearly 1,500 jobs across the industry. The loans to bike-related organizations on a list released this week totaled at least $39.85 million at the low-end of the ranges provided, and not counting loans of less than $150,000 each. The full list.

    "It allowed us to keep on payroll approximately 35 people that we didn't have a role for as we were developing an e-com and curbside drop-off/pick-up model," said Hill Abell, the CEO of Bicycle Sports Shop in Austin, Texas.

    The shop received a loan of between $350,000 and $1 million, which will be turned into a grant and forgiven after the company documents that at least 60 percent of the money was used for payroll.

    "We were able to rehire 100 percent of our staff who were willing to work under current conditions by the end of May, so a total of about 90 people currently on staff," he said. "We will meet all the stipulations for full forgiveness of the PPP loan and should have no repayment obligation."

    The Small Business Administration and the Treasury Department released the data at the request of several news organizations and other groups. The data includes the names of more than 60,000 businesses that received loans of at least $150,000, up to the $10 million maximum.

    The program is part of the $2 trillion Cares Act; it still has about $138 billion available and has been extended for another month

    A PPP loan in March came at the right time, said Russell Chandler, the owner and general manager of Full Cycle, in Boulder, Colorado.

    "It was a pretty big thing for us. It came at the end of the winter where frankly had we not received it I don't know if we would have even opened for the year," he said. "It gave us a way to cover payroll when we didn't know if we would be able to open and make a business out of it this year."

    After the initial shock, sales at Full Cycle came back strong. "We ended up hiring aggressively and now we have the best team we've had in the history of the shop," Chandler said.

    The SBA and Treasury reported loan amounts in ranges, not exact amounts.

    BRAIN examined the list for bike-related companies and organizations, searching for bike-related key words and the names of well-known companies and organizations. It's likely we missed several companies.

    "It gave us a way to cover payroll when we didn't know if we would be able to open and make a business out of it this year." — Russell Chandler, Full Cycle

    We totaled up the dollar amounts using the lowest number in the dollar range, meaning that the actual dollar total for our industry could be nearly $80 million if loans were at the high end of the range.

    The list does not name businesses that applied for loans of less than $150,000 — likely the majority of loans to bike retailers and small suppliers. The average loan size was $107,000.

    Companies listed the number of jobs that the loans would help preserve. According to the database, the loans helped maintain 974 jobs at for-profit companies and 577 at nonprofit organizations.

    Some companies that applied for loans but then withdrew or declined the loan remain on the list. That may include one bike-related company, the electric scooter startup Bird. The CEO of Bird had earlier told the media that the company never applied for a PPP loan, but Bird is still on the list as receiving a loan of at least $5 million. The company said it had never applied, and its bank, CitiBank, told TheVerge.com that it had never submitted an application. 

    South Carolina wheel maker Boyd Cycling received a PPP loan of less than $150,000, which helped it continue employing eight workers without interruption, co-founder Nicole Johnson told BRAIN.

    "We used it specifically for payroll," Johnson said, noting that for Boyd, as for many industry suppliers, sales declined rapidly in March but then rebounded.

    "We're are going to grow this year, after all this. It turned out to be a silver lining," she said.

    At New Mexico-based distributor Bicycle Technologies International, the loan got the company through a period when state laws forced it to shut down for a period in April, said BTI president Preston Martin.

    "Even after being recognized as an essential business, BTI was limited to a headcount of five people in its warehouse throughout April. The funds helped keep our staff intact until we were authorized by the state to return operations to normal. Dealers were incredibly patient with the delays. The good news is that same day shipping is much more consistent now," he said.

    The full list.

    — Dean Yobbi and Steve Frothingham contributed to this story.

  • PeopleForBikes and Sea Otter Classic plan rival California conferences next April

    BOULDER, Colo. (BRAIN) — PeopleForBikes, which owns and operates the Bicycle Leadership Conference, announced Wednesday that it will hold the BLC as a virtual event this fall, and announced plans for an in-person BLC next April 12-14 in Santa Cruz, California.

    Meanwhile, organizers of the Sea Otter Classic, which has hosted the BLC in Monterey for many years, announced a rival management conference for next April.

    The Global Outdoor Summit will be April 13-15, the traditional time slot for the BLC, just prior to the consumer festival. The summit will be at Monterey's Plaza Hotel, which has been BLC's venue for many years.

    Virtual BLC

    PeopleForBikes' Virtual BLC will be Sept. 29 - Oct. 1. The organization said the virtual event will include keynotes, webinars, presentations and conversation each morning. Two keynote speakers originally planned for the real-life conference will appear at the Virtual BLC: Birkenstock's CEO David Kahan and StoryBrand's Kristin Spiotto. 

    PeopleForBikes said the agenda will cover topics including diversity, equity and inclusion in the bike industry, e-bike market adoption, sales and ridership data, and continuing the momentum of the current boom in bicycling. Registration and agenda will be available mid-summer.

    April 2021 events

    The April BLC will be at the Chaminade Resort and Spa in Santa Cruz. "PeopleForBikes and our industry leaders will deliver another outstanding conference agenda," the organization said.

    In announcing the new BLC plans, PeopleForBikes noted that the Sea Otter Classic owns each individual registration to the now-canceled in-person BLC and that those registrations are not transferable to the 2020 Virtual BLC or the in-person 2021 BLC.  PeopleForBikes pointed BLC registrants to the Sea Otter Classic if they want a refund.

    The Sea Otter emailed 2020 BLC registrants on Wednesday to let them know about the Global Outdoor Summit.

    "The Global Outdoor Summit will focus on strategic issues faced by the industry's leadership," the email said. "We will bring together speakers from around the world to build a compelling and dynamic agenda that will address such issues as global economic development, recreational trends in a chaotic world, and decision-making under uncertainty. Extensive networking opportunities will continue to be a hallmark of this gathering."

    The email said Summit organizers would be happy to apply BLC registrations to the 2021 Global Outdoor Summit or issue a refund. 

  • Cannondale and GT align model year with the calendar

    Editor's note: A version of this article appeared in the July issue of Bicycle Retailer & Industry News.

    (BRAIN) — Cannondale and GT say this season’s disruptions inspired it to shift its entire bike product cycle, returning to an updated version of the cycle the industry relied on in decades’ past: with dealer pre-season commitments made in the fourth quarter and model transitions centered around the new year. The company is promising to eliminate most mid-season model year changeovers and their resulting discounting.

    “We’re not doing this because of COVID. The only thing the pandemic did was create an opportunity to self reflect and question a lot of things about our business,” said Nick Hage, Cannondale’s general manager for North America and Japan. “We really believe what we’ve gone through just accelerated decisions that companies were going to make anyway. We said, ‘You know, we’ve been talking about doing this for a long time, let’s just do it.’ This was the year that caused that to happen.”

    This season, of course, is an anomaly, Hage said. But the Dorel Industries-owned brands are introducing their plan to its dealers this summer and will start the transition to the new cycle this fall. Cannondale will hold a dealer event (likely virtual) in October and work with retailers on pre-season commitments in the following weeks and months. Cannondale has already removed references to model years on its consumer website.

    The plan is risky: moving deadlines for pre-season orders later in the year opens the door for competitors to lock up dealers’ open-to-buy dollars months before Cannondale and GT sales reps come knocking. 

    And, on the sales floor, Cannondale dealers might be showing “last year’s” (AKA: current calendar year) models through the summer while competing brands launch new model years as early as June. While Cannondale plans to hold the pricing line through the summer, dealers might be tempted by discounts dangled by their other suppliers throughout the spring and summer.

    But the risk might be worth it for Cannondale because many dealers have been asking for it for years. They say they resent having to discount bikes during what should be prime selling season in the spring and summer, to make room — and dollars — for the new model year. Some aren't happy being expected to attend brand dealer meetings as early as July, when they’d rather remain in the store. 

    “We are going to be honest about the risk with our retailers,” Hage said. “We know (the risk) exists, we know you’re going to get pressure but we know you are committed partners and we believe in this change. … In the past we would wait for a Trek or a Specialized to do something and because of our position in the market, we tended to go along with what the other big brands would do. In this case we are going to take the opportunity to take a leadership position.”

    Dorel is a publicly-traded company with sales of $2.3 billion last year. Its Sports division, of which Cannondale is a part, provides about a third of those dollars.

    Although there is little public data available, Cannondale is widely perceived as trailing the Big Three brands in the U.S. dealer marketshare: Trek, Specialized and Giant. “Cannondale is the Fourth Musketeer,” one dealer likes to say. 

    But while Cannondale has been dangling behind the three-brand breakaway for years, it’s not pack fodder, either: it has the full product line, dealer base, R&D, manufacturing and marketing budgets and global sales that few, if any, brands outside the top four possess. It has the horsepower to compete with the top three, if it can bridge the gap.

    Three buckets

    Cannondale’s new plan has three key “buckets”, as Hage calls them, and there is a wide variety of other factors to be considered.

    The buckets are:

    1. Align Cannondale’s product cycle with its dealers' by moving to a calendar-year cycle where bike inventories will ramp up in the spring and wind down in the fall and mid-season disruptions will be minimized.
    2. Extend the life cycle of key models. Cannondale plans to offer annual “collections” that will include some carryover models as well as new ones. Models that are continued might gain some refreshed color options while a core color continues, but spec variations will be minimized.
    3. Eliminate consumer-facing model year identifiers, simplify the product line and make most product launches in the first half of the year, all in the name of a new “Focus on the Rider.”

    Of course there are factors Cannondale and GT can’t control. Aside from the competitive realities mentioned above, winter and early spring weather in some key regions can shift buying and selling cycles. Suppliers of drivetrain and suspension components announce new lines throughout the year, making bikes with the old parts less desirable, even if the new parts are still unavailable. And will Cannondale, which sponsors a ProTour team, be able to resist a traditional pre-Tour de France product launch opportunity?

    Hage said Cannondale will deal with new component launches as necessary, perhaps making rolling spec changes as new parts are available, but without tying such changes to a new model year.

    “The important thing is that we (the industry) have put ourselves in a position so that for most of our products we now give dealers two halves of a season to sell. We give them half of one season, and the first half of the following season; we never give them a full season. And then, when they are at their busiest, we come in and disrupt everything and ask them to take a bunch of products for the rest of the summer and fall and then sit on it over the winter.”

    Other suppliers have moved in this direction in recent years. Trek has de-emphasized pre-season commitments while some upscale mountain bike and road brands are on multi-year product cycles. Most brands long ago moved away from full line refreshes every year and toward periodic refreshes of product families or platforms, such as Trek’s launch of its 2021 model year Emonda road bike platform in mid-June this year. 

    Several Cannondale dealers told BRAIN they are in favor of the change.

    “I think it’s great, it’s long overdue,” said Chris Duffy, the director of bike purchasing for Conte’s Bicycle Group, which has 14 stores in the Washington, D.C. area and in Florida. 

    Duffy said the current cycle of mid-season model year changes “is a primary driver of inventory devaluation, low bike margins, and vendors running out of core inventory in the middle of the selling season.” 

    Chuck Kininmonth, the general manager of Pittsburgh’s ProBike+Run chain, said the plan was “refreshing” and “pretty well thought out.”

    “Binging and purging is what pre-season is. It’s three months of purging to clear up inventory dollars so you can binge on the new bikes and then repeat the cycle the next year,” he said. “The better we can work with the manufacturers and really be partners, the better we will all be.” 

  • Sea Otter Classic cancels October Monterey event, plans virtual Sea Otter Play experience

    MONTEREY, Calif. (BRAIN) — Organizers of the Sea Otter Classic on Wednesday announced that the 2020 event, which had been rescheduled for October, will not be held. 

    Instead, they will hold Sea Otter Play, a virtual experience that will include product launches, cycling challenges, fundraising for COVID-19 relief and other features. Sea Otter Play's presenting sponsor is Continental and the event will be held in mid-September.

    "After frequent discussions with Monterey County health officials, it has become clear that we cannot host an event that will meet our health and safety standards," event CEO and president Frank Yohannan said in a letter to partners on Wednesday.

    Yohannan said more information regarding the cancellation of the Sea Otter Classic and the Bicycle Leadership Conference will be available on July 17.

    Sea Otter Play ride challenges will start on Sept. 1 and the festival will be held September 17-20.

    "The industry response to this event has been terrific. For many sponsors and exhibitors, this will be their first opportunity to showcase their latest innovations to a global audience. We’re excited about what our September event will bring to the cycling industry and are making every effort to ensure your faith in us is rewarded with fun for you and your family," Yohannan said.

    More information: seaotterplay.com.

  • BRAIN's parent, Pocket Outdoor Media, acquires multiple media titles from AIM

    BOULDER, Colo. (BRAIN) — Pocket Outdoor Media, which owns media titles including VeloNews, Triathlete and Bicycle Retailer & Industry News, has acquired three divisions of Active Interest Media. The acquisition adds more than 20 active lifestyle titles, including Yoga Journal, SKI, Climbing, Backpacker and Warren Miller Entertainment. The purchase also includes SNEWS, the outdoor industry's trade title.

    POM acquired BRAIN in February 2019; the title was previously owned by Emerald Expositions and operated by the National Bicycle Dealers Association. 

    The full press release from POM and AIM announcing the purchase is below:

    Pocket Outdoor Media Acquires Three Divisions from Active Interest Media and Completes Its Series A Financing

    Series A funding allows Pocket Outdoor Media to expand its active lifestyle business to over 20 new media businesses including Yoga Journal, SKI, Climbing, BACKPACKER and Warren Miller Entertainment.

    Boulder, Colorado, USA — June 30, 2020 — Pocket Outdoor Media (POM), the leading endurance sports media platform, today announced the acquisition of the Healthy Living, Fitness, and Outdoor divisions of Active Interest Media (AIM), one of the world’s largest enthusiast media companies. The acquisition by POM coincides with the closing of their Series A investment from JAZZ Venture Partners, a global investment firm based in San Francisco, with participation from NEXT VENTŪRES, and Zone 5 Ventures.

    Included in the AIM acquisition are: Yoga Journal, SKI, Climbing, BACKPACKER, Warren Miller Entertainment, Oxygen, IDEA Health and Fitness Association, Clean Eating, Vegetarian Times, Better Nutrition, NatuRx, Muscle & Performance, Nastar, Fly Fishing Film Tour, National Park Trips, and SNEWS.

    The AIM brands will join POM’s existing stable of endurance sports brands: VeloNews, Women’s Running, Triathlete, PodiumRunner, Bicycle Retailer & Industry News, VeloPress, VeloSwap, and Roll Massif, a recently acquired event production company that produces a series of eight iconic Colorado cycling events. 

    The acquisition brings together best-in-class brands, diversifying POM’s media platform and allowing them to better serve active lifestyle enthusiasts and their media partners. The expanded business will continue to focus on putting the needs of its readers first, delivering content and experiences across the wide range of activities they are passionate about. 

    “The strength of these collective brands positions us to build the premier active lifestyle media destination to meet the needs and interest of our readers on a daily basis, whether they’re beginners or experts—looking for a training plan, healthy recipe, event coverage, nutrition advice, injury prevention and more,” said Robin Thurston, CEO of Pocket Outdoor Media. “Our mission is to inspire people to do the activities they love—yoga, ride, cook, ski, run, swim, hike, climb—with greater enjoyment and knowledge.”

    In an evolving media landscape, POM will become the hub for active lifestyle enthusiasts looking to live a balanced and healthy lifestyle. The first phase of their Active Pass membership program was recently launched with perks that include a wide range of premium content, VeloPress books, magazine subscriptions, Roll Massif event access, and training plans through a strategic partnership with Today’s Plan.

    “The synergies of these iconic brands, some of which have been around for over 50 years, uniquely enables Pocket Outdoor Media to deliver an integrated experience never seen before,” said John Spinale, managing partner at JAZZ Venture Partners. “They have already developed a personalized newsfeed and membership experience that allows readers to access content across the POM brands, and it will only be bolstered as they add the AIM businesses to the experience.”

    “After getting to know Robin and the Pocket Outdoor Media team, it was clear that we share a great commitment to the communities we serve in Outdoor, Fitness, and Wellness.  Our alignment around our shared values, strategy, and Boulder location made this a natural fit for our people and brands. Pocket’s new technology platform unifies, personalizes, and syndicates the best content around the customer journey. Combining their personalization platform with their membership strategy felt like a home run for the brands and team members of AIM’s Outdoor, Fitness, and Active Lifestyle divisions,” said Andy Clurman, CEO of Active Interest Media.

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  • PeopleForBikes announces Tim Blumenthal's retirement
    Organization creates Tim Blumenthal Legacy Fund

    Editor's note: A version of this article appears in the July 1 issue of Bicycle Retailer & Industry News. This article has been corrected from an earlier version that mistakenly said Blumenthal was the founding president of Bikes Belong. We apologize for the mistake.

    BOULDER, Colo. (BRAIN) — In a transition that has been planned for about two years, PeopleForBikes president and CEO Tim Blumenthal announced his retirement on Tuesday. He will be replaced by Jenn Dice, who has been the organization’s chief operating officer since last year.

    Blumenthal joined Bikes Belong as president in 2004; in 2012 that organization was renamed PeopleForBikes. (Rich Olken was the founding president of Bikes Belong, serving in that position from 1999-2004.)

    Prior to Bikes Belong, Blumenthal was executive director of the International Mountain Bicycling Association. He also is a former editor of VeloNews and Bicycling magazines and a writer and advisor for NBC Sports. 

    Blumenthal departs PeopleForBikes at a time of heightened interest in cycling and uncertainty in the industry. The organization relies, in part, on supplier dues tied to annual sales.

    “I can’t believe I’ve been in this job almost 16 years, and now I’m getting ready to leave, and... things are not crumbling, but it’s a super, super tough situation,” Blumenthal told BRAIN. “We’ve got more going on than ever before and we are going to need to add a few people at a time when a lot of businesses are contracting.”

    He said the organization was being very conservative with spending this year.

    “The best case is that we maintain a balanced budget, the worst case has us losing a half million dollars,” he said. One upside, he noted: the pandemic ended most planned staff travel, saving almost $250,000 this year.

    Blumenthal hired Dice in 2001 at IMBA, where she was a government relations expert. She joined PeopleForBikes in 2013. 

    “She will bring so much to the job,” Blumenthal said. “She’s a really hard worker, she’s bold and she’s not afraid, and I’ve seen that in a bunch of different ways. …  the other thing is that she is so enthusiastic about bike riding, and that’s contagious.”

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    In a release Tuesday, Dice said, "Tim first hired me at IMBA in 2001 to create the government affairs program for mountain biking and then lured me away 7 years ago to do the same thing for the entire bike industry at PeopleForBikes," said Dice. "I've learned so much from his leadership and mentorship. He empowered me to create programs, build teams and we have innovated every step of the way."

    During Blumenthal's tenure, PeopleForBikes grew from two employees to 25, increased its annual budget from $1 million to $10 million, launched the PeopleForBikes Foundation and developed a grassroots network of support that includes 1.4 million people.

    The organization announced Tuesday that it has created the Tim Blumenthal Legacy Fund to continue honoring Blumenthal and his dedication to making biking better for everyone during the last 40 years. Donations to the fund will help the PeopleForBikes Foundation address the significant challenges our society currently faces with the solutions that bicycling can offer.

    "We should all be grateful to Tim for all he has done to create better places to ride, to bring disparate communities together around common goals and to set an example of what leadership looks like," said Chris Speyer, vice president of merchandising product and co-op brands at REI, who was recently elected as the chairman of the PeopleForBikes Coalition board. "He has been a mentor of mine, and I feel honored to partner with Jenn Dice and the PeopleForBikes team to support and advance the amazing foundation he has laid. Thanks for everything, Tim."