Huffy To Buy Schwinn Trademark
MIAMISBURG, USA (July 18) – Huffy Corporation has entered into an agreement to buy the trademark and certain assets of competitor Schwinn/GT Corporation for more than US$ 60 million. “An opportunity such as this comes along only rarely, said Don Graber, Huffy’s chairman, president and chief executive officer. “Boulder, Colo.-based Schwinn is one of the […]
MIAMISBURG, USA (July 18) – Huffy Corporation has entered into an agreement to buy the trademark and certain assets of competitor Schwinn/GT Corporation for more than US$ 60 million. “An opportunity such as this comes along only rarely, said Don Graber, Huffy’s chairman, president and chief executive officer. “Boulder, Colo.-based Schwinn is one of the most widely recognized brand names in the world and will strengthen Huffy”, he said. In a press release, Schwinn said it has filed for Chapter 11 bankruptcy proceedings, a move that will be required for Huffy to buy some of Schwinn’s assets. Schwinn/GT Europe (including its UK and German business) went into receivership in April of this year after which its US parent company Questor partners Fund announced that it will sell GT Bicycle, Schwinn Bicycle and Schwinn Fitness divisions. Last month, Schwinn CEO Jeff Sinclair said the company, which merged with GT Bicycles to become Schwinn/GT in 1998, had a short list of buyers and that the sale could be complete within the next month. He insisted it would not mean the brand’s demise. “What they’re buying is assets of the company and one of the prime assets of the company is the Schwinn brand,” Sinclair said. Huffy is a major producer of bicycles and basketball backboards, but has suffered in recent years because of competition from foreign manufacturers.
In 1999, Huffy closed its last two U.S. bicycle-making plants and moved
production to Asia and Mexico because of price competition from Chinese
manufacturers. Schwinn, founded in Chicago in 1895, was the dominant bike-maker in the US for much of the 20th century, and in the 1950’s, one in four bikes sold in the United States was a Schwinn. The company lost much of its market share in the 1980s after failing to capitalize on the mountain-bike craze and losing its appeal to younger bikers. It filed for bankruptcy in 1992. Schwinn/GT came back in the mid-1990s after it was bought by Scott Sports Group and Zell-Chilmark Fund LP in 1993. Its bikes are now second in market-share in the US behind Trek Bicycle Corp., according to the National Bicycle Dealers Association. The company had revenues of around $400 million in 1999, and Schwinn said it posted a profit in 2000 thanks to the strength of the fitness line. (GB)