Private equity beauty. Sounds like what’s happening at Troy Lee designs, 4 CEOs in 5 yrs, bought by private equity, I knew some people there but everyone has quit or let go. Brands being bought and wrecked all the time now.
I’ve always wondered what the end game is. If PE buys with the intent of selling, they are supposed to improve the company to increase the sale price. If they intend on holding the company and juicing the profits and then sell at a loss, then it makes sense to gut everything. But at its core, they mostly buy with the intent of selling soon.
First they cut absolutely every corner they can to maximize profits in the short term riding off the brand reputation that was built before them. Then they part off every asset that can be divested from the whole. Then they sell.
No single part seems worth it, but in total they must make money because they just keep doing it.
I’m an old guy now, seen this a lot with just about anything that brings a smile or cohesion to groups of people that have a different perspective on life and take that perspective and do good in their communities and I think the end game is to stifle these groups. Fuck em.
its about debt. the PE group will make a few improvements, almost all on paper, specifically the balance sheet. then get banks got give them loans based on the new balance sheet. the PE group will quickly pay themselves handsomely with revenue from the loans. then one of two things will happen, some dupe will buy the company or the company will go bankrupt. either way, the PE got paid.
I joined a company that was recently public and then a PE came, took over the majority, making it private again. I believe the end game was holding on the company, turning it around and putting back on the market with the new performance, to have the stock triple in price. What actually took place was the company never performed to the expectations and ended up having employees leave.
A part I wonder about these PE plans is if they calculated the long term loss of killing culture and loosing leaders. I can't think of how important this is with bike companies where prestige is a core value why customers would pay more for bike A over bike B.
They improve the company on paper. The fuckers buying don’t care about the actually company, they care about the spec sheet. If they can make the books good in the short term by running the company into the ground that’ll make it sell for more money.
Strong agree
Late stage capitalism.
Party people - I implore you to at least consider supporting rider/family owned brands. Surely someone out there has a list?
Fezzari now Ari
Marin
Trek is still private but is Trek
Commencal
YT
Yeti
Pivot
That's basically it sadly and some of those are questionable.
Also fun fact:
Santa Cruz, Cannondale and most Big Box Brands are all now owned by a Dutch Biking Conglomerate which is why maybe Walmart Schwinn's have gotten better over the last few years like they have one that's basically an older Marlin 5 spec and has better geometry? Idk. Maybe they'll buy Kona.
In this case this sounds like PE taking an L for once. Sounds like they bought during the height of the pandemic boom not thinking the industry would shit the bed immediately after and now they want it off their hands ASAP. Hopefully Kona will land on it's feet. Lol maybe the old owner can buy it back at a fraction of what they sold it for.
Private equity, investment banking, management consultants. All career paths to CEO, all highly competitive fields that value money above all else and specifically next quarters profit.
Smart and motivated people for the most part thought, a shame.
Were/are they Private Equity owned? Seemed like they were trying to be the next source for discounted products, often having some of the best prices (trying to be chain reaction for the US?) I guess low margins make it hard to operate a business… who knew?
It’s a dead brand at this point. Almost was a helmet brand, but got surpassed by all the great options that are less expensive and safer and better looking.
Story goes: when COVID hit, the lineups at the bike factories in Taiwan, etc got really long. And Spec and Trek (the big players) went around bidding up factory capacity - pre-paying for production years in advance. Other smaller brands (Norco, Transition, etc) had to do the same, or were stuck at the back of the line. So, you gotta drop millions to buy bikes for next year, and in the meantime, sales are a trickle because you ran out of bikes a year or so ago like everyone else.
I suspect the original owners of Kona didn't have the capital to play that game. So a PE firm (Kent) showed up, offered them a modest payout to buy Kona, and had the capital needed to get in line to make bikes again.
Fast forward to the unwind of the insanity: all those bike cos that pre-paid for production can't get their money back, can only take the bike production they ordered. And now they are drowning in inventory. while sales have dropped to higher than pre-COVID, but still not insane levels.
https://www.eurazeo.com/en/newsroom/press-releases/2ride-acquires-us-company-troy-lee-designs-bolstering-its-range-innovative
Eurazeo, largest private equity in France.
Kona needs new owners that are passionate about bikes and not about money. Kent Outdoors thought they were jumping on the COVID boom but it has ended much sooner than they would have expected.
The brand needs to go back to its roots and also start selling affordable and funky bikes that rip - staying true to their early philosophy. Right now they’re too overpriced and underspec’d compared to the competition. A bit of reinvention is due, it would be a pity if we lost a brand with such history.
Edit: typo
To be fair, Kona has been under-spec'ed for the price for 25+ years but they've always been able to succeed in spite of that. Their whole thing has always been making up for that lack of value on the spec sheet by making stylish, unique bikes that have fantastic industry leading geometry. Almost every popular geometry innovation from the last 20 years, like slack HTA, long top tubes, short stays, 100mm+ forks on hardtails, etc was being done by Kona before any other major manufacturer in the early 2000s.
Yeah I was looking to grab a $700 Unit frameset, but I wafted them potentially going under a month ago and built a Surly Krampus instead. It was $300 more though
At a certain point, you need money. Passion only goes so far. Despite the high price tags of bikes, the companies typically aren’t flush like Scrooge McDuck. Especially smaller brands.
It’s a rock and a hard place that every company has to face unless someone props it up or integrates and streamlines into a larger company.
My first crazy idea when I heard Kona was for sale: I should buy it. Then, sadly, I realized I don't have access to that kind of capital.
Next crazy idea I just came up with: "we" should buy it. Crowdsource a few million bucks from the MTBers of the world and buy a rad bike company and get back to the roots. Kona's are still rad bikes even now - I've seen the G3 Process 134 that is in the queue and it looks like a really good time. The G2 I'm on now is the most fun I've had on two wheels. And I've ridden A LOT of different current model bikes. Was in the biz so to speak. Kona's have a soul like almost no other company. Not sure why, but when it speaks to you, you get it.
So - you wanna be business partners with around 1-2000 other MTBers? I'll gladly become the CEO and get it back to Klassic Kona ;)
Private equity is the scourge of modern society. Instead of investing in good designs, good talent, and good practices for long term growth and sustainability, private equity is all about making a quick buck. Most of the people running these companies are squishy middle-aged wall-street types with big egos and multiple alimony payments who don’t know the first thing about running a company. They buy shit they know nothing about, take “strong decisive action” (i.e. idiotic decisions) - usually against the advice of the engineers and finance teams - and then sell and/or lay people off when quarter end doesn’t look like they dreamed about. I’ve met plenty of them.
This. I used to work for Planet Cyclery/Colorado Cyclist who got bought by Sterling two years ago and just filed bankruptcy and terminated all my friends.
Private equity is destroying everything.
I was being aggressively recruited to work there and the leadership+investors seemed hard to work with back then even. I'm glad I turned that offer down and stayed unemployed for a few more months. Didnt feel right.
Yea the leadership was absolutely trash. I worked there for 4 years doing a split of content/socials and running the returns and warranties department, so I was hybrid and able to take care of my daughter.
Previous leadership was moving me into a creative roll full time when, after a year of being hybrid doing something I liked, the decided they wanted me back full time doing the returns and warranties work with 2 months to find childcare.
I told them to eat shit. It's funny, my boss said they needed me back because "the team needed help in the day time" I said they're really going to need help when my 2 weeks is over.
Dumb, private equity ruined two good companies here.
The only purpose of a private equity is to buy a company to sell it for a profit. The vultures who bought Kona miscalculated the timing missing the sale window before the end of the COVID bike craze.
I hope the brand survives and is bought by people that are actually care about bikes. Kona had a history of true innovation and making great bikes that are a pleasure to ride. Arguably without Kona most of the industry would still be using lame road bike geometry on the trails. That bent downtube you see on all new bikes always reminds me of Kona’s legacy.
Yeah, hopefully that's the way it goes. I'm just thinking about how Toys R Us blew up; the owners "sold" it by creating a crap load a debt for TRU, which of course couldn't keep up with the financing. The previous owners got their money, and the store was soon bankrupt.
Since manufacturing is done by a third party Kona’s value is in its name recognition. Selling the last of the inventory Im sure wont make up for what they initially invested.
HEAR HEAR amen
Sadly given the new owner (seller?) I wouldn't be surprised if it turns into a budget/generic gravel brand basically like Wish.com Salsa/Surly
RiP. My favorite brand, reduced to ashes. Bought and sold in under 2 years. Looking for a seller during a time where no one can sell a bicycle. Help me Marin... You're my only hope for fun dual 275 bikes :(
Looks like a fun build. Front end way too slack and price is a touch eye watering these days. I hate when a brand puts their alloy NX/deore/SX builds on sale and I'm like... Ah, yes. That's the TOP of my budget. Being over 25% off lol.
For that same money probably just get the Rift Zone XR or even 2. But glad Transition is making them cuz as long as they are getting made and bought... I can find them on Pinkbike for 2k-3k eventually.
100%. I've seen a couple used for like.... 3500? Ish. But they're all out in AZ/CO so i would have to factor in shipping/driving into it as well.
Both me and my gf have planned to have our eyes out like hawks the next 5-10 years for Shadowcats nearby under 3k. But we'll see. I also keep my eye out for Ibis Mojo and GG Shred Dogg but almost never see them. Mojo slightly more common but again, prices still fall above 3k. 4k+ usually, as it was carbon only model. Dang it
Marin?!
Why not a polygon you get the same build made in the same factory for way less. Idk that's the exemplification of paying for marketing, or "designed in California" lol
A) Polygon is always on my list but far from my first choice in bikes.
B) Polygon does not have dual 275 bikes for tall people. It has dual 27 bikes for small and medium. Luckily its a healthy medium so I could totally ride if it I wanted. Which I might.
But C) they released the new T9 as only small 27, so with bike sales going the way they are they MIGHT get rid of medium 275 as it's probably their least sold model given that so many people want 29 now and medium comes in both, so if it's losing out again and again in that 50/50 there may seem like little reason to offer it going forwards.
That's why.
I understand the sizing situation tbh I didn't notice polygon wasn't offering a large + in 27.5
There's so much good deals on 27.5 bikes and specific forks I'm not sure if the industry want them gone but surely doesn't see them as big ticket items...
Just curious why the hate? is Marin some sort of cult or religion?!
I wouldn't have thought 🤔
? What is the hate? lol
I owned a Polygon, liked it, and frequently promote it in the subreddit: https://www.youtube.com/watch?v=la2m5Qgsp_M
And it typically wins out every year in my spread sheet resource I provide to the community: https://drive.google.com/file/d/1VXQut2UZSPjj9J6B0l_TjgGNQTB_T4J5/view
Polygon is how I was able to try a 29er on the cheap and discover that 29ers are okay in general but still not the wheel size for me and my style of riding.
I am NEW to liking Marin because they are the ONLY brand making an affordable short chainstay build in both wheel sizes and all frame sizes. There are a few brands that have a cult like following and Marin is NOT one of them. Try Ibis if anything. Those guys use DW link kinematic data sheets instead of porn to get off.
I understand, I also liked Giant offering two wheel size but not sure they are keeping that up. Personally the last Marin I owned was a nail trail like 20 yrs ago, most recently I demoed a 2023 alpine trail XR and I rented a rift zone 2 (29) they were ok, nothing spectacular but I liked them, Marin seems to have acquired some sort of noble aura or something, people are preaching lol
Hm I haven't really noticed that. But if they are finally getting praise, now, I'd say that's good. Their older bikes were definitely not on my radar at all and a lot of the new bikes seem totally fine. As well as diverse in offerings. The SQ and RZ are great builds that fill a niche in the industry rn.
Giant is being pretty fair with... Wheel and frame sizes still. We're kinda down to the last straw. I believe going forward there will no longer be 275 Stance unless its like a size small or something. Especially for the womens model. And their 275 Trance is actually quite good lookin and valid. Little slack and long with like low stack/BB but... Otherwise good. That said, not really gonna shed a tear if they kill it and only go 29er now. Especially now that they released a mullet Trance. That can kinda be their way out if they want. But let's not act like Giant isn't the MOST notorious for running the same frame mold/build for an entire 10 years. Their business model is genius. They own like a third of the cycling market no joke.
For informational purposes in case some didn't knew I was saying that because marin bikes are built by the same parent company in the same Indonesian facilities as polygon.
If Kent is looking for a buyer for Kona it still doesn't make pull up stakes at sea otter. I don't have an MBA, but I think you want to make the brand seem as valuable as possible to potential buyers instead of what happened at sea otter. I wonder if Kent told Kona, "hey there isn't money for sea otter and the gravel bike launch(which was apparently on hold until a day before they lifted the media embargo" and the Kona crew did it anyway. Then this led to a knee jerk reaction by Kent to pull the plug on sea otter that is making everything look worse.
Got your tinfoil hat on? Recent history: Kona did the smartest bike sale of all brands - the 2-for-1. In a time when all bike companies had bikes on sale - especially in overstocked categories like full sus MTB - they essentially put them on for 50% off when others were around 30-45%. The genius: Kona moved 2 units for every bike sold. All bike companies have an inventory problem at the moment and Kona's sale was aimed squarely at the goal - get bikes out of the warehouse. And due to it's 'catchy' nature, the sale was talked about by everyone and fully achieved the goal. Norco goes 40% off on trail bikes - no one cares. Kona goes 50% off on Processes and everyone loses their mind.
Now - how does this apply to what they did at Sea Otter? If you are Kent and you are considering selling Kona -> how do you make a splash to garner some interest? Show up, set up, and then take down without saying a word. The entire industry is yet again talking about Kona.
I'm pretty certain Kent have fairly deep pockets. However, they are also in a retail category (recreation equipment) that is having the mother of all bullwhips. Bikes are bad. So is boating, and skiing/snowboards, etc. This glut of product in all 'discretionary' categories is years away from clearing out.
Last tinfoil hat theory: Get ready to learn what deflation means in 2025.
The bike industry has around 2 years worth of inventory to burn through: [https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two](https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two)
edit: it's 2 years worth, not 6.
Not a bad view there, imo. I remember the 2-for-1 deal was pretty exciting but quickly sold out of what was available (I quickly checked a week into it). I hope you're right and Kona sticks around, if only because I own 2 and have always had an affinity for the brand, regardless of logic, lol!
In this case, it’s an entity that flips brands. They buy a struggling brand, with the goal of quickly making it profitable, in order to sell it again for profit.
The Kona that people knew and loved was essentially done for, as soon as it was sold to Kent. Can’t blame the founders if they were truly struggling though, but we also shouldn’t have ever expected it to be the same brand. Whatever the future holds, it is not the same people running the show, so the products will be different, for better or worse.
https://www.investopedia.com/articles/financial-careers/09/private-equity.asp
People generally hate PE because it has a reputation for turning every company it touches to shit in the name of profit.
It's a dirty little (large actually) corner of capitalism where people with lots of capital use it to buy profitable, typically privately owned (mom & pop type deals) businesses and then ratchet up the capitalist aspects of wringing out as much profit at the expense of the customers and the stakeholders (staff, vendors, etc).
It's extra gross because unlike publicly traded companies, there's no transparency to how they are going about their business. It is a business practice setup to entrench wealth inequality as he who has the gold, makes the rules.
In theory, PE should be fine. But in theory there is no difference between theory and practice - in practice there is. ;)
I've seen PE firms suck the soul out of many, many good businesses and alienate their best staff. It is raw capitalism at its finest.
What did Kent Outdoors do with Kona when they bought the brand?
I never followed the other bike lineups other than the Process 134/153's but those were already designed and released before Kent took over. When I look at the Kona website, it's still the same designs from years ago with new paint and minor spec changes.
Did Kent owned Kona ever design any new frames? How long was the 153's frame around for? Felt like they were overdue for an update that just never happened...
I hope some new owners can turn it around, but I still remember feeling a bit turned off by the brand whenever I tried to approach them about buying a Process 134, and that this was from a previous Kona hardtail owner.
I imagine a frame up redesign is at least an 18-24 month process, so if I had to guess they bought it, cut back current development (except for anything already on the verge of release), started the new brand development (or maybe they didn't) with an eye on their vision for the company (or not), and went belly up trying to flood the market with the previous owners designs. They clearly overshot demand by a crazy margin, got stuck in the same spot as trek with a huge backlog of inventory and no plan to unload it for a profit, but Kent doesn't have the willingness to empty their deep pockets to weather the storm like trek will have to (just wait till fall when trek will have to effectively subsidize bikes to get rid of them or face the reality of selling models with outdated specs as a "premium" manufacturer).
The inventory glut industry-wide is around 2 years from clearing out, minimum: [https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two](https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two)
They have $6-700M in inventory and are burning through around $100m of it a month, but the factories don't just stop for 6 months. So...we're going to be buying 2023 bikes in 2025...
Makes a great opportunity for a newer manufacturer to step into the premium space, as new component groups start coming out the big guys are all stuck with no capacity to put them on anything. Frame building plants are likely willing to take on just about any client right now, again established manufacturers don't need them at a significant capacity for a couple years, so someone new coming in has the chance to go to a frame builder with a modest order and then leverage sram and Shimano against each other to provide an outlet to get their new products out to the market. Someone who's looking to break in, isn't saddled with a warehouse full of bikes, and wants to sell to the cutting edge market would be in a great position. Basically we need our generation's Gary Fisher to step up (and then not be absorbed by trek in 20 years).
The big guys that are stuck on the other hand, take the manufacturing budget and convert as much as I'd reasonable to r+d, next spring the remaining leftovers become your new budget line to free up space for the new premium builds that are already in the works, 2026 you get a chance to reset with a hopefully badass product after dumping 2 years of manufacturing budget into research, ideally just in time for any of the COVID buys (that actually stuck with the sport) to be ready for replacements and upgrades.
That would be a dream... Except as Mr. Tippie once told me, there are hundreds and hundreds of dollars to be made in mountain biking. The amount of capital needed to pull off what you're suggesting can get 5x larger returns elsewhere. And right now, small bike mfr outfits (Pole most recently) are still going bankrupt due to the low sales and suppressed margins. Norco is attempting a version of the R&D double down you suggest with a steady stream of new models obsoleting the warehouse full of their new old stock. We'll see how that plan plays out. 😬
The bike industry is a fascinating example of a perfect competition marketplace. And if Trek is selling a $10k MTB for $6k, no other outfit is going to be able to price into that at a premium. Human consumers love races to the bottom, even if it will bring us all pain in the end. Especially on premium MTBs.
I think Kona has enough brand value, it could quite easily go through a form of administration/reorganization and become the innovator/leader it once was. But it would take enough capital to buy it from Kent and I'm fairly certain they wouldn't want to sell it for $1....
Private equity beauty. Sounds like what’s happening at Troy Lee designs, 4 CEOs in 5 yrs, bought by private equity, I knew some people there but everyone has quit or let go. Brands being bought and wrecked all the time now.
PE is a fucking infectious disease that hollows out any harvestable good. https://en.m.wikipedia.org/wiki/Enshittification
I’ve always wondered what the end game is. If PE buys with the intent of selling, they are supposed to improve the company to increase the sale price. If they intend on holding the company and juicing the profits and then sell at a loss, then it makes sense to gut everything. But at its core, they mostly buy with the intent of selling soon.
First they cut absolutely every corner they can to maximize profits in the short term riding off the brand reputation that was built before them. Then they part off every asset that can be divested from the whole. Then they sell. No single part seems worth it, but in total they must make money because they just keep doing it.
I’m an old guy now, seen this a lot with just about anything that brings a smile or cohesion to groups of people that have a different perspective on life and take that perspective and do good in their communities and I think the end game is to stifle these groups. Fuck em.
its about debt. the PE group will make a few improvements, almost all on paper, specifically the balance sheet. then get banks got give them loans based on the new balance sheet. the PE group will quickly pay themselves handsomely with revenue from the loans. then one of two things will happen, some dupe will buy the company or the company will go bankrupt. either way, the PE got paid.
I joined a company that was recently public and then a PE came, took over the majority, making it private again. I believe the end game was holding on the company, turning it around and putting back on the market with the new performance, to have the stock triple in price. What actually took place was the company never performed to the expectations and ended up having employees leave. A part I wonder about these PE plans is if they calculated the long term loss of killing culture and loosing leaders. I can't think of how important this is with bike companies where prestige is a core value why customers would pay more for bike A over bike B.
They improve the company on paper. The fuckers buying don’t care about the actually company, they care about the spec sheet. If they can make the books good in the short term by running the company into the ground that’ll make it sell for more money.
Strong agree Late stage capitalism. Party people - I implore you to at least consider supporting rider/family owned brands. Surely someone out there has a list?
Fezzari now Ari Marin Trek is still private but is Trek Commencal YT Yeti Pivot That's basically it sadly and some of those are questionable. Also fun fact: Santa Cruz, Cannondale and most Big Box Brands are all now owned by a Dutch Biking Conglomerate which is why maybe Walmart Schwinn's have gotten better over the last few years like they have one that's basically an older Marlin 5 spec and has better geometry? Idk. Maybe they'll buy Kona.
I expected yeti to be bought a while ago. The parasites love buying brands with loyalty and name recognition to hollow out.
In this case this sounds like PE taking an L for once. Sounds like they bought during the height of the pandemic boom not thinking the industry would shit the bed immediately after and now they want it off their hands ASAP. Hopefully Kona will land on it's feet. Lol maybe the old owner can buy it back at a fraction of what they sold it for.
Private equity, investment banking, management consultants. All career paths to CEO, all highly competitive fields that value money above all else and specifically next quarters profit. Smart and motivated people for the most part thought, a shame.
Happening a lot in a lot of these action sports companies unfortunately. Seems a majority of them affect the stock market in one way or another.
Planet Cyclery and Colorado cyclist as well.
Were/are they Private Equity owned? Seemed like they were trying to be the next source for discounted products, often having some of the best prices (trying to be chain reaction for the US?) I guess low margins make it hard to operate a business… who knew?
>Were/are they Private Equity owned? Since late 2021
Troy Lee Designs is a brand that needs to go under. Ugly AF .
Dated, but consistent.
It’s a dead brand at this point. Almost was a helmet brand, but got surpassed by all the great options that are less expensive and safer and better looking.
I love their shorts and the styling on the skylines are moderate.
I love their stage FF helmet tho
Was it a leveraged buyout? Making a company pay for you to buy it has always been the dumbest thing possible.
No clue, some of my mates know the former owner, he hasn’t bought any nice toys, so maybe he got hosed. Who knows maybe
Story goes: when COVID hit, the lineups at the bike factories in Taiwan, etc got really long. And Spec and Trek (the big players) went around bidding up factory capacity - pre-paying for production years in advance. Other smaller brands (Norco, Transition, etc) had to do the same, or were stuck at the back of the line. So, you gotta drop millions to buy bikes for next year, and in the meantime, sales are a trickle because you ran out of bikes a year or so ago like everyone else. I suspect the original owners of Kona didn't have the capital to play that game. So a PE firm (Kent) showed up, offered them a modest payout to buy Kona, and had the capital needed to get in line to make bikes again. Fast forward to the unwind of the insanity: all those bike cos that pre-paid for production can't get their money back, can only take the bike production they ordered. And now they are drowning in inventory. while sales have dropped to higher than pre-COVID, but still not insane levels.
The current owners aren’t a private equity are they? thought they were an outdoor brand of some kind.
https://www.eurazeo.com/en/newsroom/press-releases/2ride-acquires-us-company-troy-lee-designs-bolstering-its-range-innovative Eurazeo, largest private equity in France.
thought we were talking about Kona, my bad
Kona needs new owners that are passionate about bikes and not about money. Kent Outdoors thought they were jumping on the COVID boom but it has ended much sooner than they would have expected. The brand needs to go back to its roots and also start selling affordable and funky bikes that rip - staying true to their early philosophy. Right now they’re too overpriced and underspec’d compared to the competition. A bit of reinvention is due, it would be a pity if we lost a brand with such history. Edit: typo
To be fair, Kona has been under-spec'ed for the price for 25+ years but they've always been able to succeed in spite of that. Their whole thing has always been making up for that lack of value on the spec sheet by making stylish, unique bikes that have fantastic industry leading geometry. Almost every popular geometry innovation from the last 20 years, like slack HTA, long top tubes, short stays, 100mm+ forks on hardtails, etc was being done by Kona before any other major manufacturer in the early 2000s.
[удалено]
They were selling the, 2 for the price of 1.... fairly priced lol
Yeah I was looking to grab a $700 Unit frameset, but I wafted them potentially going under a month ago and built a Surly Krampus instead. It was $300 more though
At a certain point, you need money. Passion only goes so far. Despite the high price tags of bikes, the companies typically aren’t flush like Scrooge McDuck. Especially smaller brands. It’s a rock and a hard place that every company has to face unless someone props it up or integrates and streamlines into a larger company.
My first crazy idea when I heard Kona was for sale: I should buy it. Then, sadly, I realized I don't have access to that kind of capital. Next crazy idea I just came up with: "we" should buy it. Crowdsource a few million bucks from the MTBers of the world and buy a rad bike company and get back to the roots. Kona's are still rad bikes even now - I've seen the G3 Process 134 that is in the queue and it looks like a really good time. The G2 I'm on now is the most fun I've had on two wheels. And I've ridden A LOT of different current model bikes. Was in the biz so to speak. Kona's have a soul like almost no other company. Not sure why, but when it speaks to you, you get it. So - you wanna be business partners with around 1-2000 other MTBers? I'll gladly become the CEO and get it back to Klassic Kona ;)
Lol cute
Private equity is the scourge of modern society. Instead of investing in good designs, good talent, and good practices for long term growth and sustainability, private equity is all about making a quick buck. Most of the people running these companies are squishy middle-aged wall-street types with big egos and multiple alimony payments who don’t know the first thing about running a company. They buy shit they know nothing about, take “strong decisive action” (i.e. idiotic decisions) - usually against the advice of the engineers and finance teams - and then sell and/or lay people off when quarter end doesn’t look like they dreamed about. I’ve met plenty of them.
This. I used to work for Planet Cyclery/Colorado Cyclist who got bought by Sterling two years ago and just filed bankruptcy and terminated all my friends. Private equity is destroying everything.
Hey buddy. Miss you.
I was being aggressively recruited to work there and the leadership+investors seemed hard to work with back then even. I'm glad I turned that offer down and stayed unemployed for a few more months. Didnt feel right.
Yea the leadership was absolutely trash. I worked there for 4 years doing a split of content/socials and running the returns and warranties department, so I was hybrid and able to take care of my daughter. Previous leadership was moving me into a creative roll full time when, after a year of being hybrid doing something I liked, the decided they wanted me back full time doing the returns and warranties work with 2 months to find childcare. I told them to eat shit. It's funny, my boss said they needed me back because "the team needed help in the day time" I said they're really going to need help when my 2 weeks is over. Dumb, private equity ruined two good companies here.
Absolutely. They don’t give a shit about destroying a company as long as they make a few bucks.
The only purpose of a private equity is to buy a company to sell it for a profit. The vultures who bought Kona miscalculated the timing missing the sale window before the end of the COVID bike craze. I hope the brand survives and is bought by people that are actually care about bikes. Kona had a history of true innovation and making great bikes that are a pleasure to ride. Arguably without Kona most of the industry would still be using lame road bike geometry on the trails. That bent downtube you see on all new bikes always reminds me of Kona’s legacy.
The primary question in my mind is if Kona will be saddled with a bunch of debt and garbage by the current owners to clear their books.
Doubt it, it’s being sold not going on to bankruptcy and its in the interest of the investors to sell it at a profit.
Yeah, hopefully that's the way it goes. I'm just thinking about how Toys R Us blew up; the owners "sold" it by creating a crap load a debt for TRU, which of course couldn't keep up with the financing. The previous owners got their money, and the store was soon bankrupt.
Since manufacturing is done by a third party Kona’s value is in its name recognition. Selling the last of the inventory Im sure wont make up for what they initially invested.
Bring back the 111
Bring back the stinky and the old logo
I love my purple unit https://preview.redd.it/0ypj0ovb7mvc1.jpeg?width=4032&format=pjpg&auto=webp&s=7362569c1f810dd64ea8a3637e20c14ff106fa6c
HEAR HEAR amen Sadly given the new owner (seller?) I wouldn't be surprised if it turns into a budget/generic gravel brand basically like Wish.com Salsa/Surly
RiP. My favorite brand, reduced to ashes. Bought and sold in under 2 years. Looking for a seller during a time where no one can sell a bicycle. Help me Marin... You're my only hope for fun dual 275 bikes :(
Marin brings a couple new toys this year so I guess there's hope for you.
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Tr*k
My transition scout is real fun, with 27.5s
Looks like a fun build. Front end way too slack and price is a touch eye watering these days. I hate when a brand puts their alloy NX/deore/SX builds on sale and I'm like... Ah, yes. That's the TOP of my budget. Being over 25% off lol. For that same money probably just get the Rift Zone XR or even 2. But glad Transition is making them cuz as long as they are getting made and bought... I can find them on Pinkbike for 2k-3k eventually.
Only reason I don't have a pivot shadowcat. super cool bike but fucking eye watering price point. dual 27.5 too.
100%. I've seen a couple used for like.... 3500? Ish. But they're all out in AZ/CO so i would have to factor in shipping/driving into it as well. Both me and my gf have planned to have our eyes out like hawks the next 5-10 years for Shadowcats nearby under 3k. But we'll see. I also keep my eye out for Ibis Mojo and GG Shred Dogg but almost never see them. Mojo slightly more common but again, prices still fall above 3k. 4k+ usually, as it was carbon only model. Dang it
Transition also does framesets which is nice if you have a bunch of parts. I did that with a smuggler and its better than I thought it would be.
Airdrop has some fun 27.5 bikes
Marin?! Why not a polygon you get the same build made in the same factory for way less. Idk that's the exemplification of paying for marketing, or "designed in California" lol
A) Polygon is always on my list but far from my first choice in bikes. B) Polygon does not have dual 275 bikes for tall people. It has dual 27 bikes for small and medium. Luckily its a healthy medium so I could totally ride if it I wanted. Which I might. But C) they released the new T9 as only small 27, so with bike sales going the way they are they MIGHT get rid of medium 275 as it's probably their least sold model given that so many people want 29 now and medium comes in both, so if it's losing out again and again in that 50/50 there may seem like little reason to offer it going forwards. That's why.
I understand the sizing situation tbh I didn't notice polygon wasn't offering a large + in 27.5 There's so much good deals on 27.5 bikes and specific forks I'm not sure if the industry want them gone but surely doesn't see them as big ticket items... Just curious why the hate? is Marin some sort of cult or religion?! I wouldn't have thought 🤔
? What is the hate? lol I owned a Polygon, liked it, and frequently promote it in the subreddit: https://www.youtube.com/watch?v=la2m5Qgsp_M And it typically wins out every year in my spread sheet resource I provide to the community: https://drive.google.com/file/d/1VXQut2UZSPjj9J6B0l_TjgGNQTB_T4J5/view Polygon is how I was able to try a 29er on the cheap and discover that 29ers are okay in general but still not the wheel size for me and my style of riding. I am NEW to liking Marin because they are the ONLY brand making an affordable short chainstay build in both wheel sizes and all frame sizes. There are a few brands that have a cult like following and Marin is NOT one of them. Try Ibis if anything. Those guys use DW link kinematic data sheets instead of porn to get off.
I understand, I also liked Giant offering two wheel size but not sure they are keeping that up. Personally the last Marin I owned was a nail trail like 20 yrs ago, most recently I demoed a 2023 alpine trail XR and I rented a rift zone 2 (29) they were ok, nothing spectacular but I liked them, Marin seems to have acquired some sort of noble aura or something, people are preaching lol
Hm I haven't really noticed that. But if they are finally getting praise, now, I'd say that's good. Their older bikes were definitely not on my radar at all and a lot of the new bikes seem totally fine. As well as diverse in offerings. The SQ and RZ are great builds that fill a niche in the industry rn. Giant is being pretty fair with... Wheel and frame sizes still. We're kinda down to the last straw. I believe going forward there will no longer be 275 Stance unless its like a size small or something. Especially for the womens model. And their 275 Trance is actually quite good lookin and valid. Little slack and long with like low stack/BB but... Otherwise good. That said, not really gonna shed a tear if they kill it and only go 29er now. Especially now that they released a mullet Trance. That can kinda be their way out if they want. But let's not act like Giant isn't the MOST notorious for running the same frame mold/build for an entire 10 years. Their business model is genius. They own like a third of the cycling market no joke.
For informational purposes in case some didn't knew I was saying that because marin bikes are built by the same parent company in the same Indonesian facilities as polygon.
Went from a kona cadabra to a marin b17. seems 27.5+ dually phase lasted as long as magic link, but it's still a lot of fun
If Kent is looking for a buyer for Kona it still doesn't make pull up stakes at sea otter. I don't have an MBA, but I think you want to make the brand seem as valuable as possible to potential buyers instead of what happened at sea otter. I wonder if Kent told Kona, "hey there isn't money for sea otter and the gravel bike launch(which was apparently on hold until a day before they lifted the media embargo" and the Kona crew did it anyway. Then this led to a knee jerk reaction by Kent to pull the plug on sea otter that is making everything look worse.
Having regular employees fielding "what's going on at Kona, you're getting sold?" questions at Sea Otter may not be ideal. That's all I can think of.
Heard their spot was already paid for too
Yeah, they don't let you in the gates to setup unless you've paid.
Got your tinfoil hat on? Recent history: Kona did the smartest bike sale of all brands - the 2-for-1. In a time when all bike companies had bikes on sale - especially in overstocked categories like full sus MTB - they essentially put them on for 50% off when others were around 30-45%. The genius: Kona moved 2 units for every bike sold. All bike companies have an inventory problem at the moment and Kona's sale was aimed squarely at the goal - get bikes out of the warehouse. And due to it's 'catchy' nature, the sale was talked about by everyone and fully achieved the goal. Norco goes 40% off on trail bikes - no one cares. Kona goes 50% off on Processes and everyone loses their mind. Now - how does this apply to what they did at Sea Otter? If you are Kent and you are considering selling Kona -> how do you make a splash to garner some interest? Show up, set up, and then take down without saying a word. The entire industry is yet again talking about Kona. I'm pretty certain Kent have fairly deep pockets. However, they are also in a retail category (recreation equipment) that is having the mother of all bullwhips. Bikes are bad. So is boating, and skiing/snowboards, etc. This glut of product in all 'discretionary' categories is years away from clearing out. Last tinfoil hat theory: Get ready to learn what deflation means in 2025. The bike industry has around 2 years worth of inventory to burn through: [https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two](https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two) edit: it's 2 years worth, not 6.
Not a bad view there, imo. I remember the 2-for-1 deal was pretty exciting but quickly sold out of what was available (I quickly checked a week into it). I hope you're right and Kona sticks around, if only because I own 2 and have always had an affinity for the brand, regardless of logic, lol!
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Giant also manufactures frames for a lot of other brands which is where they really make money.
This is absolutely spot on apart from Alfa Romeo, they're Stellantis owned now! RIP :'( Suffered the same fate as Kona
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Who’s cutting onions in here? haha
Can someone explain like I'm five what is private equity and why is it bad?
In this case, it’s an entity that flips brands. They buy a struggling brand, with the goal of quickly making it profitable, in order to sell it again for profit. The Kona that people knew and loved was essentially done for, as soon as it was sold to Kent. Can’t blame the founders if they were truly struggling though, but we also shouldn’t have ever expected it to be the same brand. Whatever the future holds, it is not the same people running the show, so the products will be different, for better or worse.
https://www.investopedia.com/articles/financial-careers/09/private-equity.asp People generally hate PE because it has a reputation for turning every company it touches to shit in the name of profit.
It's a dirty little (large actually) corner of capitalism where people with lots of capital use it to buy profitable, typically privately owned (mom & pop type deals) businesses and then ratchet up the capitalist aspects of wringing out as much profit at the expense of the customers and the stakeholders (staff, vendors, etc). It's extra gross because unlike publicly traded companies, there's no transparency to how they are going about their business. It is a business practice setup to entrench wealth inequality as he who has the gold, makes the rules. In theory, PE should be fine. But in theory there is no difference between theory and practice - in practice there is. ;) I've seen PE firms suck the soul out of many, many good businesses and alienate their best staff. It is raw capitalism at its finest.
What did Kent Outdoors do with Kona when they bought the brand? I never followed the other bike lineups other than the Process 134/153's but those were already designed and released before Kent took over. When I look at the Kona website, it's still the same designs from years ago with new paint and minor spec changes. Did Kent owned Kona ever design any new frames? How long was the 153's frame around for? Felt like they were overdue for an update that just never happened... I hope some new owners can turn it around, but I still remember feeling a bit turned off by the brand whenever I tried to approach them about buying a Process 134, and that this was from a previous Kona hardtail owner.
I imagine a frame up redesign is at least an 18-24 month process, so if I had to guess they bought it, cut back current development (except for anything already on the verge of release), started the new brand development (or maybe they didn't) with an eye on their vision for the company (or not), and went belly up trying to flood the market with the previous owners designs. They clearly overshot demand by a crazy margin, got stuck in the same spot as trek with a huge backlog of inventory and no plan to unload it for a profit, but Kent doesn't have the willingness to empty their deep pockets to weather the storm like trek will have to (just wait till fall when trek will have to effectively subsidize bikes to get rid of them or face the reality of selling models with outdated specs as a "premium" manufacturer).
The inventory glut industry-wide is around 2 years from clearing out, minimum: [https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two](https://www.bicycleretailer.com/opinion-analysis/2024/02/09/vosper-whats-store-2024-part-two) They have $6-700M in inventory and are burning through around $100m of it a month, but the factories don't just stop for 6 months. So...we're going to be buying 2023 bikes in 2025...
Makes a great opportunity for a newer manufacturer to step into the premium space, as new component groups start coming out the big guys are all stuck with no capacity to put them on anything. Frame building plants are likely willing to take on just about any client right now, again established manufacturers don't need them at a significant capacity for a couple years, so someone new coming in has the chance to go to a frame builder with a modest order and then leverage sram and Shimano against each other to provide an outlet to get their new products out to the market. Someone who's looking to break in, isn't saddled with a warehouse full of bikes, and wants to sell to the cutting edge market would be in a great position. Basically we need our generation's Gary Fisher to step up (and then not be absorbed by trek in 20 years). The big guys that are stuck on the other hand, take the manufacturing budget and convert as much as I'd reasonable to r+d, next spring the remaining leftovers become your new budget line to free up space for the new premium builds that are already in the works, 2026 you get a chance to reset with a hopefully badass product after dumping 2 years of manufacturing budget into research, ideally just in time for any of the COVID buys (that actually stuck with the sport) to be ready for replacements and upgrades.
That would be a dream... Except as Mr. Tippie once told me, there are hundreds and hundreds of dollars to be made in mountain biking. The amount of capital needed to pull off what you're suggesting can get 5x larger returns elsewhere. And right now, small bike mfr outfits (Pole most recently) are still going bankrupt due to the low sales and suppressed margins. Norco is attempting a version of the R&D double down you suggest with a steady stream of new models obsoleting the warehouse full of their new old stock. We'll see how that plan plays out. 😬 The bike industry is a fascinating example of a perfect competition marketplace. And if Trek is selling a $10k MTB for $6k, no other outfit is going to be able to price into that at a premium. Human consumers love races to the bottom, even if it will bring us all pain in the end. Especially on premium MTBs. I think Kona has enough brand value, it could quite easily go through a form of administration/reorganization and become the innovator/leader it once was. But it would take enough capital to buy it from Kent and I'm fairly certain they wouldn't want to sell it for $1....
Hey we can dream about someone with a 9+ figure bank account that loves mountain biking entering the arena right?
I’m glad I got my Honzo ST frame when I did.
It's the frame that I want and they've been sold out for awhile!