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Trek Doing Great on Armstrong Deal

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WATERLOO, US (July 28) – When executives at the Trek Bicycle Corp. signed a contract with Lance Armstrong in 1998, they were betting the public would see the cyclist recovering from testicular cancer as a human interest story. Seven years later, Armstrong is still riding a Trek manufactured in this southern Wisconsin town as he […]

WATERLOO, US (July 28) – When executives at the Trek Bicycle Corp. signed a contract with Lance Armstrong in 1998, they were betting the public would see the cyclist recovering from testicular cancer as a human interest story.
Seven years later, Armstrong is still riding a Trek manufactured in this southern Wisconsin town as he wraps up his seventh straight – and last – Tour de France.
Armstrong’s prowess and personal story have reinvigorated American interest in cycling, and no company has felt the impact more than Trek, the privately held company that is the top U.S. manufacturer of bikes.
“It was just a gamble that paid off dividends that we could never imagine,” said Zapata Espinoza, a spokesman for Trek. “It was like putting a penny in a slot and winning a million bucks.”
Road bikes, which sell for an average of US$1,150, accounted for 28% of dollar sales by specialty dealers in 2004, up from 16% in 2002, according to the National Bicycle Dealers Association. Overall, the U.S. bicycling industry has remained flat since 1999, generating an estimated US$5.5 billion in sales of bikes, parts and accessories in 2004, the group says.
“We have seen a significant increase in sales and production because of demand,” said Trek official Steve Swenson. Trek refused to release sales figures, but Ash Jaising, president of the Bicycle Market Research Institute in Boston, estimated Trek’s sales have increased from less than US$50 million in 1990 to US$500 million this year.

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