Dorel buys Cannondale

This story is a little dull, until we realize Dorel owns Pacific Cycle. Pacific moved Schwinn to Target stores and that class of retailers. It wouldn't make sense to do that with Cannondale, but life is full of surprises.

From BicycleRetailer.com today:

Dorel Buys Cannondale

MONTREAL, Quebec (BRAIN)—Dorel Industries has just announced the acquisition of the Cannondale Bicycle Corporation.

The total value of the all-cash transaction will be $190 (U.S) to $200 (U.S) million, subject to Cannondale's earnings results for the year ending June 30, 2008.

The transaction, which will be immediately accretive to Dorel's earnings, is being financed through debt.

Cannondale and Sugoi are being purchased from an affiliate of Pegasus Capital Advisors, which acquired the company in 2003. 2007 sales for Cannondale and Sugoi were approximately $200 million.

Dorel president and chief executive officer Martin Schwartz said that in light of the acquisition the Company's Recreational/Leisure segment is being split into two distinct operating divisions.

A new Dorel Independent Bicycle Dealers (IBD) division, the Cannondale Sports Group, is being created and will focus exclusively on this category with premium-oriented brands.

Backed by Dorel's extensive resources, the Cannondale Sports Group will build on Cannondale's strengths to grow significantly within the IBD channel.

"Our intention is to build a world-class company that dealers will want to buy from," said Schwartz. Pacific Cycle will become a stand-alone division with an exclusive focus on mass merchant customers.

"The Cannondale purchase is consistent with Dorel's plan to concentrate on its core businesses. Since buying Pacific Cycle in 2004 we have learned a great deal about the bicycle industry and have found it to be a true value driver for Dorel. We are committed to pursuing this sector, and this important transaction will position us globally in a most material way. Dorel recognizes the importance and potential of the Independent Bicycle Dealer channel and is purchasing Cannondale as the first step to become the world's number one IBD player. Cannondale will be the crown jewel of this new Dorel division, which will seek additional such growth opportunities," he added.

"We're excited about the future for Cannondale and our retailers. Cannondale's goal is to be the number one supplier to the IBD channel. Dorel's vast resources and experience provide us with long term stability and the ability to accelerate our goals for growth with our retailers," said Matt Mannelly, president and chief executive officer of Cannondale.

Dorel purchased Pacific Cycle (Schwinn, Mongoose and GT Bicycle brands) in 2004.

—Jason Norman

Headset Spacers, how many?

There's been some discussion regarding steer tube material and the number of spacers between the headset and the stem. All of the discussions I've read are focused on racing-quality lightweight stuff. If you have a thin aluminum or carbon fiber steer tube, it makes sense that zero spacers focus the stress right at the focal point of the structure. This is how a Pro racer, like George Hincapie in the recent Paris-Roubaix, can have a catastrophic failure. His steer tube snapped at mile 131.5 of the 161 mile race. This is a very demanding race, and this failure put him in the car with a damaged right shoulder. Big George'll understand it's a risk of racing, your customer will not be understanding about it if you set it up.
In the opposite case-by having a large number of spacers in place, the mechanic adds leverage to the rider handlebar input, which may also quickly fatigue the steer tube.

What do you do?

One industry expert has gone on record:
The number and placement of spacers does have an effect on the fatigue life of an aluminum steerer tube. Running less than 5mm of spacers under the stem can concentrate or "point load" a great deal of stress in one spot on the steerer. Therefore, Bontrager recommends a minimum of 5mm, and a maximum of 40mm of spacers between the stem and the headset to maximize the fatigue life of the steerer.
Scott Daubert Trek Bicycles

This has little to do with a $400 hardtail bike as set up by the manufacturer. But if you are replacing a fork, or even considering using a steer tube extender (BAD!), it is a factor to be aware of. If your customer is asking for a large amount of steer tube spacers, be sure to let them know they probably have the wrong size or type of frame. Do not install a large number of spacers, or get into a physics debate on the leverage difference of a long handlebar and tall stem vs. stem extenders etc. There is no set guideline, as it varies to the quality of the components.

"BE the Expert, do it right!"

Why did we get a "Heads-Up" memo?

It was probably 2002. We had been pursuing a vendor for over a year, and we'd finally got them to consider us. They visited several of our stores, and only one of them dropped the ball. Their Natn'l Sales Manager walked up to our counter, and wasn't greeted in a minute and a half by the tech who was doing a tune up. Not a difficult tune up, but the tech felt like that person would wait. At the 91st second she pivoted from the counter, called our buyer and let them know the deal was off.

We have people working in our stores, and people make mistakes. We do not expect you to do everything perfect, but you are expected to do your best. If the tech above was in the middle of Brain Surgery, his response would have made sense. His action did not, and lost for all of our stores a valued vendor by his choice alone.

The details always make a difference. Please be the one in your store that goes the extra mile, and achieves perfect customer service this month. Make it your goal, and you'll be much more able to do it.

That "Easy Button" looks good.

It's tough to not love those Staples commercials, where basic problems are solved by slappin' a red button. Nice!

But are we helping our customers to find the same thing in our stores? For cyclists, the "button" is called a "Survival Kit". Think of the things that ALL novice cyclists should own, maybe just five things. What would those be?
1. Patch kit, 2. Tire levers, 3. Trail use pump (As opposed to home use), 4. Spare tube, 5. Wheel removal tools if needed. This is the absolute minimum I'd want to sell, to pretty much anyone. I know some things aren't on the list, like how to carry it all on the bike. (Seat bag, Camelbak) Everyone needs water, that should be on there too. (Bottles/cages or Camelbak).
What next? Better tools, Tire liners or Slime tube sealant, and a good lock. We've now outfitted the bike, don't forget the rider...

We are experts, let's do everything to get our customers off on the right foot, er, pedal.

Why should we do Rack Installations?

In case that question has ever visited your mind, look closely at the pictures. Yakima and Thule make towers that fit into the slot-like roof raingutters on some vehicles. This Kia does not have that fitment, it has a roof panel that uses "character lines" that channel water away from the doors and requires a "Gutterless" mount tower/pad setup. This vehicle has been or will be damaged by the cargo pressure of anything placed on the crossbars. BTW- I think that's a ten+ year old set of Saris towers, could be Thule, but they're so old and wrong for this vehicle it really doesn't matter.

Why would the car owner do this? I'm sure that answer is personal, but it's probably related to budget and hard-headedness. If asked, he'll say "it works fine". That's because it has not dismounted under freeway wind pressure yet. "Yet", it will in time.

We offer advice and installation service on the rack systems we sell for this exact reason. This owner has not been informed of the consequences that will happen to him in time. This is unsafe. Our certified technicians would never suggest this, and the driver following this guy wouldn't get a big surprise.

We do good things. Let's do them more often. Find these people and help them.

Where has the time gone?

The last post on this blog was back in September! I can't believe how fast the calendar has spun thru the days, but almost constant travel can do that to you. As a blessing to me, those times have been filled with lots of work, good people and good times.

The picture above is of Brian Rinkenberger, our inside rep at Diamondback. This was taken during the Demo Ride from our Bike University. All of the other pics I took at that ride are available at CLICK HERE.

Other pictures from the Expo part of that event are HERE.

Annnd a few from Blowhard Mtn trail in Brianhead Utah. It was very cold...

Interbike Expo Day One

I've been on my feet from 07:30 to 19:40 today, so this'll be brief.

I thought this sticker from Fox Racing Shox was very interesting.

What would you give for a device that would put together a list of EXACTLY what your customer needed for thier car rack, including retail prices and updated daily? Thule's cost of $3,500 includes a printer. It's beautiful!

You know how a picture is worth a thousand words? Click on this one and just look at everyone's body language around the art bike. It was loudly playing 70's rock music...