Shakeout at North American Bicycle Retail Market

PHILADELPHIA, USA – After the bankruptcy of multisport chains Sports Authority (460 shops + online sales) and Sport Chalet (47 stores + online shop), the take-over of one of the largest US bicycle retail chains is the next sign of the struggling US market.
‘ASI’s purchase of Performance Bicycle illustrates growing frustration of bicycle brands who view the IBD model as broken.’ – Photo Performance Bicycle

The Performance Bicycle chain has been taken over by Advanced Sports International (ASI), supplier of Fuji, SE Bikes, Kestrel, Breezer, Oval Concepts and Phat Cycles brands. ASI has close ties with Taiwan based bike maker Ideal Bike Corp.

‘Broken’ IBD model

According to a report in SGB Media, “ASI’s purchase of the 106 outlets of Performance Bicycle illustrates the growing frustration of bicycle manufacturers who view the independent bicycle dealership model as broken, but are also learning how difficult and expensive it can be to sell direct-to-consumer.”

Accell North America faced with bankruptcies

To avoid losing an important distribution channel ASI decided to take a step forward with the take-over of Performance Bicycle. It comes after Accell Group reported a 3% decline in turnover on the North American market mainly due to the bankruptcy of the multisport chains Sports Authority (460 shops and one-line sales) and Sport Chalet (47 stores plus on-line shop). Accell sold Diamondback bikes at the two multisport chains. At the presentation of the company’s half year results Accell also reported that its Raleigh brand is faced with fierce competition and arduous conditions at IBD’s.

Brands shift their focus to consumers

ASI’s latest acquisition illustrates a potential growing movement for bicycle manufacturers and brands to buy retailers as an alternative or additional route to their own direct-to-consumer investments. Earlier this year the same happened on the North American fitness equipment market when Johnson Health Tech acquired its second retail chain.

“This move capitalizes on continuing changes in the bicycle industry,” said ASI President and CEO, Patrick J. Cunnane on SGB Media referring to the market trend of opening competitive single brand stores. “ASI has seen remarkable growth over the last decade and, like so many of our customers, Performance Bicycle has been an instrumental partner each step of the way. As our industry continues to evolve, ASI is ready to grow.”

New parent company

“ASI formed Advanced Sports Enterprises to acquire Performance Bicycle, and the new parent company will oversee brand development, wholesale and retail operations, while keeping ASI’s wholesale and Performance Bicycle’s retail operations separate,” as reported by SGB Media.

ASI President Patrick Cunnane will also be the CEO of the newly founded Advanced Sports Enterprises while Performance Bicycle CEO David Pruitt will continue to lead the retail division under Performance Bicycle.