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Schwinn, the Company that just won't go away,(4 posts)

Schwinn, the Company that just won't go away,TJeanloz
Jan 6, 2003 10:34 AM
It seems that Schwinn, and actually all of Pacific Cycle Group, is back up for sale. Wind Point has apparently decided that they've damaged the brand enough, and now is a good time to cash out:

http://www.thedeal.com/NASApp/cs/ContentServer?pagename=TheDeal/TDDArticle/TDStandardArticle&Box1=NULL&Box2=NULL&banner=NULL&c=TDDArticle&cid=1040749498676

The trouble is finding a bike company big enough to buy the biggest bike company...
If they could split off Schwinn ...Humma Hah
Jan 6, 2003 10:59 AM
... and return it to building bike-shop, non-mass-market, quality bikes I'd be proud to own, including reproductions of older models, I'd invest in it. I've got about $10k in hard-luck 401k money, retrieved from a scandalized retirement fund, that's looking for a wild-eyed crazy investment.

Its not that crazy an idea, actually. Harley Davidson fell on hard times. Back in the 70's it was owned by AMF that was importing foriegn motorcycles and slapping the Harley logo on 'em, even on minibikes. Finally, the Harley workers themselves took advantage of such a corporate adjustment, and purchased the company back from AMF. They're wildly successful now, and have done it by returning to their roots.
It's all about profitability.Uncle Tim
Jan 6, 2003 3:24 PM
How profitable can a new made in the USA Schwinn be in these trying economic times? The market has been saturated at the low end with made in China/made in Taiwan bikes. Even if this trend is turned around, it won't happen overnight.

The same trend has heavily affected the upper end of the market. It is absolutely depressing. Let just hope that Cannondale can hang in there and fight off evil for a while longer.
That's what they said about Harley ...Humma Hah
Jan 7, 2003 9:54 AM
In fact, there IS a market for US-made bicycles, although it is small. A few custom framebuilders are doing OK selling high-end bikes. Waterford (formerly builders of Schwinn Paramounts) are getting some respect and employ the last of the Schwinn family to still be in the business.

No US bike company can or should attempt to compete for the K-Mart/Walmart bike market. Schwinn built its rep by getting AWAY from department stores, developing a good relationship with LBS dealers, and staking their fortunes on high-quality products. They set the industry on its ear by offering a lifetime warranty on their frames, for example.

Just as the Harley name meant something to the boomers who could not have a motorcycle when young, but reached middle age and could afford a $20,000 motorcycle, Schwinn could mean something to the boomers who drooled over Paramounts and used to own, or would have preferred to own, Schwinn cruisers as a kid. If they could buy a quality American-built bike with that name, a few would be willing to fork over the money. It would never be a huge market, but it could potentially be very loyal.

And if they kept their ear to the ground and listened to the specific desires of the American market, they might surprise everyone. Schwinn was once very good at catering to unique American tastes -- the Black Phantom and the Stingrays and Krates are examples. Kids who will lay down a couple of hundred dollars for name-brand sneakers might very well fall in love with a really cool and unique bike, and become quite loyal.