WE NEED BIKE MECHANICS, E-BIKE BUY-BACK, CANNONDALE CHANGES

By Jay Townley

09 22 26: “Backcountry acquires assets of Velofix mobile bike shop network.” Sporting Goods Business SGB Media: “Backcountry has acquired the assets of Velofix, the largest mobile bike shop network in North America. The transaction apparently closed on September 17, 2026. Terms of the deal were not disclosed. As the story goes, Velofix was first started due to a frustration familiar to most riders: a bike dropped off at the shop that’s still sitting on the rack a week later. Since 2013, Velofix has said it has brought the shop to the rider, with a fleet of fully outfitted service vans that have served more than 215,000 riders across the U.S. and Canada. Velofix’s 96 certified technicians reportedly man those vans today, and their service territories are said to reach 50 percent of riders in North America. Services reportedly include new bike builds and assembly, seasonal tune-ups, diagnostic repairs, drivetrain and suspension work, and e-bike diagnostics, safety inspections, and support. Technicians also handle bike fits, pre-race prep, and standing support for corporate campuses, clubs, teams, and events. ‘Backcountry has spent three decades putting real expertise behind the gear it sells, and the bikes they build,’ said the online specialty retailer known for its Gearhead Experts. ‘Velofix offers that same level of expertise, bringing the Backcountry bike shop to the customer. Together they close a gap that has always existed in buying a bike online.’” HPS ANALYSIS: In his “Further Thoughts on 4.0” BRAIN article, Rick Vosper writes: “Two other drivers complete the Bike 4.0 dynamic. The first of these is the rise of mobile service-centric bike shops and e-bike-only dealers, the latter often in nontraditional locations. Neither of these new classes of dealers show up on The Bike Shop List unless they carry a brand of bikes TBSL tracks, so it’s difficult to estimate how many of these businesses exist. But anecdotally, it seems their numbers are growing.” This article states that there are currently “96 certified technicians” employed by Velofix, serving more than 215,000 riders across North America. Assuming the 96 certified technicians will now be focused primarily on Backcountry DTC customers, there would appear to be a need in the North American market for more certified bicycle technicians, an issue HPS considers strategic, and very much overlooked by too many decision-makers in the North American bicycle business. 

09 25 26: “Fox Factory takes hit on Marucci Sports sale.” Sporting Goods Business SGB Media: “Fox Factory Holding Corp. completed the sale of Marucci Sports LLC to Squared Up Holdings, LLC, an investor group led by Marucci’s senior management, for an enterprise value of $225 million, well below the $572 million it paid for the baseball bat and glove business in 2023. The transaction concludes the review of strategic alternatives for Marucci that the company announced in February 2026. Marucci’s brands include Marucci, Victus, Baum, and Lizard Skins. In acquiring the business in November 2023, Fox said the addition marked a continuation of its diversification strategy, expanding its business away from selling through OEMs (original equipment manufacturers) into the aftermarket space. Synergies cited included a similar focus on ‘highly-engineered product,’ the shared use of aluminum and composite materials, as well as a similar emphasis on delivering innovation for elite athletes. In announcing the review this past February, Fox cited a shift to focus on core assets ‘to ensure the portfolio aligns with the company’s profitability standards and strategic objectives.’ In the fourth quarter, Fox took a goodwill impairment charge of $295.2 million related to its share price decline amid disappointing results. The company has been seeing prolonged weakness in its Specialty Sports Group (SSG), largely due to continued channel destocking in its cycling business, which includes brands like Fox, Marzocchi, and RaceFace. The Powered Vehicle Group (PVG) segment was also hurt last year by an aluminum supply shortage that temporarily halted Ford F-150 chassis production into late Q3 2026.” HPS ANALYSIS: The $225 million loss on the sale of Marucci Sports LLC turned out to be a major problem for Fox Factory Holding Corp. Even with the infusion of unplanned millions of dollars in reimbursed import tariffs, the cash flow burden of increasing interest on debt service overcame declining revenue.  

09 27 26: “California is now treating e-bikes like guns. Can the crackdown make streets safer?” The Lawton Constitution: “You've heard of gun buyback programs across the country, but in Orange County, they've taken it one step further to get another item that authorities say can be a deadly weapon off the streets — the e-bike. In September, the Orange County district attorney's office will host an e-bike buyback program, offering anywhere from $200 to $1,000 for each, no questions asked. The program, said the office in a statement, is patterned after police departments' gun buyback programs. ‘These vehicles are not child's play, and the consequences are incredibly dangerous and increasingly deadly,’ said Orange County Dist. Atty. Todd Spitzer in a statement. ‘We are doing everything we can to protect and save lives.’ ‘Buy back safety,’ reads a flier for the event. The efforts speak to the increasingly stringent — and desperate — measures public agencies and lawmakers in California are attempting in order to stem a troubling rise in e-bike incidents. This summer has been marked by police pursuits, street takeovers, and fatal crashes that have claimed the lives of innocent pedestrians and sent scores of riders to the emergency room. E-bikes have become a California phenomenon for both adults and children. But officials are most concerned about young riders on the electric bicycles and motorcycles outfitted with the most powerful motors that can sometimes outrun police vehicles. Those powerful bikes have been the focus of the most scrutiny. Earlier this summer, Amazon agreed to halt sales of high-speed e-bikes in California amid criticism from state officials. California law caps pedal-assisted e-bikes at 28 mph and throttle models at 20 mph, but Amazon had continued selling bikes capable of exceeding 40 mph despite the risks.” HPS ANALYSIS: California is among a half-dozen states and municipal jurisdictions, including New York City, that are taking ill-informed and misguided regulatory action against growing accidents, injuries, and fatalities associated with what are erroneously grouped together as “e-bikes.” The real culprits are electric motorcycles or e-motos that can exceed 20 miles per hour when driven by only the electric drive system. An e-bike coalition in New Jersey has been successful in having legislation introduced that will, when enacted into law, reverse the worst of a very bad law, but there is still a huge amount of misinformation and misunderstanding that has to be addressed and overcome by the American bicycle business and bicycle riding community before the very real threat to the economic health and future of the bicycles in this country is cooled off and reined in.

09 27 26: “Here’s the list of goods the U.S. and China agreed on for tariff cuts.” Bloomberg News: “The US and China released lists of the $30 billion worth of goods they plan to cut tariffs on, though without providing details on how much levies would be slashed. The lists include 77 Chinese products and 1,619 from the U.S. China’s Ministry of Commerce separately said that about 90 percent of the products covered by the reciprocal arrangement would have their tariffs reduced to most-favored-nation rates.” HPS ANALYSIS: Obviously we haven’t published the whole list, and it should also be obvious that everything except a few small balance and sidewalk bicycles did not make the “list of goods.” So, the bicycle business will have to wait for the current Section 301 investigation of the Structural Excess Capacity of 18 U.S. trading partners, including all of those that currently supply bicycles and e-bikes, to be concluded, as well as the final trade negotiations with China, before our business sector will know what the final import tariff structure pertaining to bicycles, e-bikes, and associated parts, accessories, and rubber will be going forward. At the present time HPS anticipates that will be before the end of this year. Meanwhile, let HPS know if you would like the list of 77 Chinese products and/or the 1,619 products from the U.S. that have been agreed for Tariff cuts.

09 29 26: “U.S. consumer confidence sinks to lowest levels since 2014 amid inflationary concerns.” Sporting Goods Business SGB: “The Conference Board’s Consumer Confidence Index plunged to its lowest level since 2014 in September amid elevated concerns about high prices as well as uncertainty over labor market conditions. The board’s Consumer Confidence Index tumbled to 81.9, a decline of 6.7 points and a reading well below the Dow Jones consensus forecast of 89. The Present Situation Index—based on consumers’ assessment of current business and labor market conditions—retreated by 7.9 points to 109.3. The Expectations Index—based on consumers’ short-term outlook for income, business, and labor market conditions—fell by 5.9 points to 63.6, its third consecutive monthly decline. The survey period for this month’s preliminary results was September 1-23, which included a federal funds rate hike and ongoing geopolitical tensions.” HPS ANALYSIS: It has been a strange fact for several years that U.S. Consumer Confidence, as surveyed and reported by the Conference Board, has been pessimistically below the reality of the U.S. economy. This phenomenon is, however, its own indicator of Americans’ confidence in the U.S., particularly as midterm elections are imminent.  

10 01 26: ”Banning Class 3 e-bikes among series of bills introduced by NYC to curb crashes.” Bicycle Retailer and Industry News: “The City Council introduced 23 bills — including banning the sale, rental and use of Class 3 e-bikes and the creation of a trade-in program operated in collaboration with retailers — that would further regulate micromobility devices in the latest action by governments to address the increase in injuries and fatalities. Wednesday's hearing was held by the Committee on Transportation and Infrastructure, the Committee on Consumer and Worker Protection, and the Committee on Public Safety. It came a couple of weeks after a state senate bill was introduced that would prohibit the sale of e-motos, define them, and prevent brick-and-mortar and online retailers from advertising them as legal on city streets. ‘My legislation in this package would stop the sale and rental of Class 3 e-bikes and, after a two-year implementation period, phase out their use while giving current riders — especially delivery workers — time and options to transition,’ said Council Member Crystal Hudson. ‘Safer streets require both accountability and a real commitment to the workers whose lives are most at risk when we do not implement safer streets. I hope we can take these initiatives further by passing legislation to hold apps that encourage dangerous practices accountable and investing in better infrastructure, charging stations, protected bike lanes, and accountability. I look forward to working with my colleagues to continue this advocacy.’ The Department of Transportation would create the trade-in program for Class 3 e-bikes — and other devices that resemble but do not legally qualify as Class 1 or Class 2 e-bikes — in exchange for a Class 1 or Class 2 e-bike or a voucher for redemption with an e-bike retailer for purchase of a Class 1 or Class 2 e-bike. Class 3 e-bikes are pedal-assist and have a maximum assist speed of 28 mph. The DOT would be required to partner with e-bike retailers to conduct at least one trade-in event per community district each calendar year and to determine the trade-in value of different types of eligible vehicles. The DOT would have to meet a participation goal of at least 10,000 trade-ins, subject to user demand and e-bike retailer participation. The DOT would be prohibited from limiting an individual's eligibility for the program based on occupation or income. This bill would require the DOT to do rulemaking to implement the program and to conduct a public outreach campaign to advertise the program. ‘We have an unacceptable situation where too many New Yorkers are being killed or injured due to e-bikes and e-scooters without the proper safeguards and enforcement,’ said City Council Speaker Julie Menin. ‘Today's hearing gives us the opportunity to hear from city agencies, delivery workers, recreational e-bike users, and pedestrians alike. What we hear from them will directly inform the package of legislation this council moves forward.’" HPS ANALYSIS: New York City, America’s largest municipality, is among the half-dozen or so state and municipal governments currently struggling with the regulation of e-bikes, e-motos, and electric scooters. New York City has been doing much better than most, the State of New Jersey, for example, and seems to actually have a handle on the difference between regulating the “products,” i.e. bicycles and e-bikes, as opposed to regulating the “use”, or riding of those products i.e., education, testing, licenses, age of riders, speeds, etc. The National Bicycle Dealers Association (NBDA) has been doing an excellent job of keeping its membership informed through its weekly NBDA Advocacy Pulse newsletter. 

10 01 26: “California signs into law legislation to differentiate e-motos from e-bikes.” Bicycle Retailer and Industry News: “A California bill that became law Wednesday will clearly define e-motos and make it illegal to market them as e-bikes. The legislation — SB 1167 — was signed Wednesday by Gov. Gavin Newsom. E-motos will be regulated according to speed, power, and intended use, while reaffirming that e-bikes are limited in power to 750 watts. According to PeopleForBikes, the law will lead to effective enforcement by requiring labeling requirements for e-bikes and other electric mobility devices, improving crash and incident data collection, and requiring consumer disclosures for some higher-powered electric vehicles. ‘By focusing on solutions to the increasing safety concerns associated with these products, SB 1167 will protect consumers, help preserve access to legitimate low-speed electric bicycles, and promote their adoption and use,’ said Matt Moore, PeopleForBikes policy counsel.” HPS ANALYSIS: California is another example of a bellwether state that is one of the two largest state governments in the U.S. (the other being the state of New York), that other states will emulate, but more importantly, that lobbying organizations and large corporations will follow when asking for and supporting state legislation that will be most beneficial to their company, brands, or cause. With that said, PeopleForBikes has employed lobbyists and deployed its personnel to get SB 1167 through the California legislature and signed by the governor.

10 02 26: “U.S. jobs market sees sharp slowdown ahead of midterm elections.” British Broadcasting Corporation bbc: “The U.S. jobs market saw a sharp slowdown in September, with employers adding just 29,000 jobs in the final update before the midterm elections. Headcounts were little changed in major sectors from tech to retail as hiring fell significantly from August, according to figures from the Bureau of Labor Statistics (BLS). Meanwhile, the unemployment rate rose slightly from 4.1 percent in August to 4.2 percent in September. The figures signal a cooling U.S. economy, which experts said reduced the likelihood of a series of further interest rate hikes by the Federal Reserve.  The 29,000 jobs created in September were down from a figure of 133,000 in August, according to revised BLS figures for the month. But George Brown, senior economist at Schroders, said while job gains have been a ‘rollercoaster’ this year, a single soft report is unlikely to point to a lasting collapse. And Bradley Saunders, North America economist at Capital Economics, said the lower figure was ‘not disastrous,’ adding that a drop in government roles and temporary visa policy changes weighed on overall growth. Jeffery Roach, chief economist at LPL Financial, added that the data showed tension between ‘goods producing sectors that support the AI boom’ and service industries feeling the effect of changes brought about by the tech. ‘Given the overall softness of the labour market, the likelihood of two Fed hikes is going lower,’ he said.” HPS ANALYSIS: The U.S. Jobs Market is very important to the bicycle business because it is a key determiner in the number of Americans who will have disposable income to spend on personal items like bicycles and e-bikes. A slowdown in the jobs market is not a good thing, no matter when it occurs. As this article points out, this was not a severe downturn, and it was not economy-wide, being confined to certain sectors of the overall economy. Nonetheless, individual Specialty Bicycle Retailers should exercise caution, and check with their local Chambers of Commerce and banks to get a reading on the employment and unemployment situations in their communities, and adjust their business planning accordingly. 

10 05 26: “5 things we learned at Taichung Bike Week” Bicycle Retailer and Industry News: “Taichung Bike Week is not a typical trade show. There is virtually no media; there are no consumers. No YouTubers, no influencers, nobody livestreaming next year's hottest bike fashions. It's almost exclusively a B2B event for original equipment (OE) buyers and suppliers. It runs as a collaborative, non-profit event coordinated by the Taiwan Bicycle Association (TBA) and the Taichung Industrial Development & Investment Promotion Committee (IDIPC). Held across three hotels within walking distance in downtown Taichung, factories set up in hotel rooms hoping designers from component brands will use them to manufacture products, and component brands display their products hoping that product managers from bike brands will spec them as original equipment. Needless to say, it's a great place to figure out where the industry is headed in 2028-2029 and beyond. 1. The bike industry is growing, or shrinking, or dying, or booming. I don't know anymore: While some themes were consistent at the show, I got wildly conflicting reports on the health of the industry in Taiwan. The Taiwan Bicycle Association's position is that the worst is behind them, especially in Europe. While Taiwan's bike unit export numbers are still dropping, unit costs are rising as they focus on higher-end products. But lots of industry insiders have more tempered optimism. The collapse of Accell group (Ghost, Lapierre, Haibike, and more) is likely to cause collateral damage as all their existing inventory is available in a fire sale. It's difficult for a healthy brand to sell a full-price product when a former Accell brand's similar product is available at a massive discount. And even with several high-profile bankruptcies, many of those brands are expected to reappear in the future — as both YT Industries and Rocky Mountain did over the past 18 months. Ultimately, the pie isn't growing, and from someone who will remain anonymous: ‘there are still too many f*cking brands.’ 2. Generational change continues: Taiwan's factories are largely family-owned. Many of the founders who built these places in the 60s, 70s, and 80s are retiring or already gone. Their kids are often university-educated and have spent time abroad or at other bigger companies in preparation for coming home and taking the reins. I don't know enough to judge, but I haven't seen much of the problematic nepotism associated with second- and third-generation family businesses. 3. 32" wheels are moving along, but eCVTs and short cranks are on everyone's radar: Honestly, I was surprised not to see more development related to 32-inch wheels. In the past, a wheel size change has been accompanied by a frenzy of retooling. I suspect my timing is off and all the 32-inch wheel stuff got done in the past few years (I haven't been to this show for over a decade). The imminent launches of eCVT systems, on the other hand, were a huge topic of discussion. It seems that every major player (and at least one smaller player) has a high-power eCVT in development for the 2028-2029 model year, and the factories and component brands are busy preparing for the changes they will bring … .Also, short cranks. Short cranks everywhere. A few new brands popping up, and a few offerings from established brands coming soon. Mostly 150mm-160mm versions, and largely focused on eMTB. 4. The bike trade show situation is a chaotic nightmare: ZIV (the German national bike trade association) and Fairnamic (Eurobike) were in full effect at TBW, pitching their respective, competing visions for European bike shows. Eurobike is moving earlier, and ZIV's high pricing surprised people. Brands are nonplussed. More than one tells me they're giving up on global EU trade shows and will do smaller regional shows instead. I heard from several people that this year's Bike Week was slow and that people were disappointed. I haven't been in a long time, so I don't have the perspective, but it seemed lively and had lots of the right people there. Given the low lift and proximity to factories, I feel like it'll be one of the last shows standing. It's a similar story with the Taipei show in the spring. There's lots of growth and hype from the China Cycle show, but most of the brands I spoke to said they'll be doing both next year. 5. The bike industry should be looking for innovation in new places: I had the opportunity to briefly explore the Taipei Innotech Expo on my way home. I was impressed with the huge number of high school and college kids showing off their manufacturing-based innovations. It's not a bike show by any means, and I don't think anyone else from the Western bike industry attended. For brands looking to do more than source standard bike products in mature product categories, I think shows like this are worth attending. Yes, there was a lot of defense-oriented drone and AI tech, but there were also many ideas for practical manufacturing.” HPS ANALYSIS: HPS found this BRAIN article very interesting and instructive. Number 1 – “The bike industry is growing, or shrinking, or dying, or booming. I don't know anymore” – says it all. We are in a time of profound change, and we can’t be guided by yesterday’s logic, as Peter Drucker warned. Number 2 – “Generational change continues,” and, as HPS has observed, the Taiwanese have educated the new generation of bicycle business owners and managers much better than any other source country that we are aware of. Number 3 – “32’ wheels are moving along, but eCVTs and short cranks are on everyone's radar.” It wouldn’t be a bike gathering without getting into the weeds with the latest trends. However, we are past the time when industry trends are driven by changing a wheel size or crank arm length. Number 4 – “The bike trade show situation is a chaotic nightmare.” Yes, and trade shows are no longer a given. They are a reflection of the strategies that are affordable and being employed in a given region of the world. Number 5 – “The bike industry should be looking for innovation in new places.” Couldn’t agree more. 

10 05 27: “Bentonville festival shifts to fall dates for 2027.” Bicycle Retailer and Industry News: “The Bentonville Bike Fest, along with the National Bicycle Dealers Association Retailer Summit and other associated events, is shifting from spring to fall next year. The festival was last held in June this year. Some exhibitors had asked for a shift to fall dates in hopes of better weather.  While this year the event enjoyed fine conditions and record attendance, the festival was affected by flooding in 2025 and an early-morning tornado in 2024 destroyed many vendor displays and forced the cancellation of the festival after its first day. The new dates for the show are Sept. 24-26, 2027, launching with an e-bike demo on the 24th in downtown Bentonville. The Red Bull Double Down will be held during the festival for the second year. The NBDA's Retailer Summit will be Sept. 22–23.” HPS ANALYSIS: The weather has finally gained in the factors affecting strategies and strategic planning. As this article points out, several “events” have shifted to a time of year when weather will be more favorable to the attendees and their ability to not only enjoy the event, but ride. Specialty bicycle retailers need to also take weather into account in doing their strategic planning for both producing and attending events.

10 08 26: “Europe must recruit 105,000 bike mechanics by 2032.” Bike Europe: “Europe's cycling sector will need to recruit 105,000 more bicycle mechanics by 2032, equivalent to 60 percent of today's workforce of around 175,000. That is the central finding of the NextGen Mechanics report, which links the shortage to low pay, fragmented training and the rise of e-bikes and leasing fleets. The report was presented at the inaugural summit of European Cycling Industries (ECI) in Brussels. ECI was established in January 2026 following the merger of Cycling Industries Europe (CIE) and CONEBI, forming the unified voice of the European bicycle trade. Originally launched by Shimano Europe and CIE as a call for evidence at Eurobike 2025, the research draws on more than 600 industry responses across 30 European countries, stakeholder interviews, Shimano’s State of the Nation consumer survey, and a labor demand model commissioned from Kevin Mayne Consulting. ‘Many experienced mechanics leave the industry, often replaced by untrained or uncertified individuals. This directly threatens the quality, reliability, and accessibility of bicycle maintenance,’ said Ties van Dijk, Head of Advocacy and Strategy at Shimano Europe. In a recent interview with Bike Europe, Fabio Takayanagi, president of Shimano Europe Group, also emphasized the urgent need to attract new talent to the trade: ‘We believe on-site instruction is essential because bicycles are becoming increasingly technical, and skilled mechanics play a vital role in keeping people's transportation reliable.’ Current European deficit stands at 45,000.” HPS ANALYSIS: After I read this article, I attended an NBDA Mingle and listened to a bike shop owner make the case for a shortage of trained mechanics and some of the things that he is doing about it locally. HPS considers this subject to be of vital importance to the North American specialty bicycle retail channel of trade. Why wasn’t it a main-stage discussion at the recent SHIFT’26 event? I attended the Schwinn Service School for a week after working for Hazel Park Bicycle and Skate Exchange before graduating high school, and was trained by Howard Hawkins, Art Engstrom, and James Johnson. What does it matter? Howard and Art founded the Park Tool Company, and James Johnson’s name is on many of Park Tool’s patents. I am not claiming I was a good mechanic, but my point is I do know something about what it takes to train and educate a bicycle mechanic, and our business is way off the back. If Europe needs 105,000 certified technicians by 2032, six years from now, how many do we need in North America in six years? How many do we need right now, today? According to this article, which I tend to believe, some of our declining sales are directly attributable to the lack of trained, certified service technicians. What are we going to do about it?

10 12 26: “Vosper: Further thoughts on Bike 4.0” Bicycle Retailer and Industry News: “I last wrote about the Bike 4.0 dynamic on February of 2025. At the time, the industry was still reeling from the effects of the COVID bike bubble. To some extent, it still is, as suppliers are still —still! — struggling with excess inventory, particularly on the equipment side of the business. Nevertheless, the market is finally settling down, and some consistent trends are emerging. At different times and in different places, I’ve noted four of these, and I’d like to review them here. Market integration: As I pointed out in 2025, the No. 1 driver of the Bike 4.0 dynamic is one of market integration. The consumer now has what I call a channel-agnostic choice of where to buy many bikes and supplies, ranging from traditional brick-and-mortar shops to direct from brands (via either D2C sales or Click & Collect) to third-party resellers like Amazon and Backcountry. One effect of this is what’s called disintermediation, the removal of obstacles between buyers and sellers. A corollary of disintermediation is that it tends to drive prices to rock bottom. As a result, retailer margins from major suppliers are currently at an all-time low, and that’s not likely to change for the better anytime soon. Savvy dealers have already pivoted to service and used bikes categories as long-neglected profit centers. That’s tough news, but here’s why: Any increase in dealer margins can only come from one of two places: either suppliers raise suggested retail prices and give (some of) the increase to dealers, or suppliers take (some of) their own profit margin and apply it to dealer margins. Neither is likely to happen. On the one hand, suppliers are already under pressure from D2C brands, not to mention lower-priced Chinese labels like X-LAB, and are loath to raise retail prices more than they already have. And even if they did, it’s unlikely consumers would be willing to pay the increase. They’d simply take their business to the D2C or discount brands. On the other hand, suppliers’ margins are just as thin as dealers’, and there’s simply no wiggle room to enhance retailers’ piece of the pie. Savvy dealers have already pivoted to service and used-bike categories as long-neglected profit centers, and it’s a sure bet that even more will do so as running a successful bike shop on new bike sales becomes an increasingly untenable proposition. Savvy suppliers have already moved to reduce warehoused inventory, keep prices in line with market reality, and adjust workforces to match the new dynamic. So the specialty retail channel has already adjusted. Another effect of market integration is that three of the four Quadrumvirate bike brands — Trek, Specialized, and Pon/Cannondale — have set up brand-owned retail stores in major (and sometimes, not-so-major) market areas. (Note: Giant has no company-owned stores in the USA.) As of June, Trek owned about 280 of these retail locations; Specialized owned 59, and Pon owned 21, for a total of 360. Currently, many of those shops have closed, with Trek currently at 263, Specialized at 49, and Pon at 20, according to Michael Forte, owner of The Bike Shop List. That’s a not-quite 27 percent reduction in locations over just three months. Are more closures waiting in the wings? Nobody but the brands themselves — and maybe not even them — know for certain. E-Bikes, new retailers, and lower inventories: E-bike brands like Aventon and Velotric have established themselves as major contenders in the dealer channel. The other main big driver of the Bike 4.0 dynamic has been the rise of e-bikes. From a niche-but-growing category in 2019, e-bikes now enjoy a major place in the industry, both inside and outside the traditional supply chain … Two other drivers complete the Bike 4.0 dynamic. The first of these is the rise of mobile service-centric bike shops and e-bike-only dealers, the latter often in nontraditional locations. Neither of these new classes of dealers show up on The Bike Shop List unless they carry a brand of bikes TBSL tracks, so it’s difficult to estimate how many of these businesses exist. But anecdotally, it seems their numbers are growing. The final driver is that retailers are stocking notably less inventory, particularly in bikes and especially in bikes from Quadrumvirate brands. These dealers might be allocating more floor space to service or supplementing their main suppliers with so-called “B” brands, which may offer lower price points or are simply easier to do business with. But in any case, lower inventory levels — and the more frequent turns that result — are definitely here to stay. Suppliers are getting back on their feet and recovering. But Bike 4.0 is still a long way from being ‘bike business as usual.’ And it’s likely to stay that way for the foreseeable future.” HPS ANALYSIS: I normally do not attempt to analyze Rick Vosper’s articles because they are too extensive and too complete. I am making an exception because, in revisiting his Bike 4.0, Rick has touched a nerve that has been causing me sleepless nights for about six months. I have bolded portions of Rick’s BRAIN article because he writes about and brings out the key points of what has emerged as the future of and for the North American bicycle business and the specialty bicycle retailer channel of trade. First, depending on how Chinese-American trade negotiations are concluded in November and December of this year, the Chinese bicycle and e-bike suppliers will, in all probability, dominate the U.S. and perhaps the Canadian supply chain for the next five to ten years. Short term, Trek, Specialized and Pon Bike have all enjoyed infusions of cash in the form of tariff refunds from the U.S. government. They have banked millions of dollars in tariff refunds as revenue, a windfall they never planned for and one that they will enjoy at least one more time, and perhaps more, depending on whether the U.S. government keeps imposing import tariffs and they keep being found illegal by the courts. This will serve to prolong their influence, but there is a high probability the Big Three will have to recraft strategies to fit into a combination of D2C and company-owned retail stores. That’s all for this newsletter, but HPS will be doing a series of podcasts that you can access to learn more.

10 14 26: “Giant, Ideal and KMC show operating revenue growth in September.” Bicycle Retailer and Industry News: “Giant Manufacturing saw a 3 percent year-over-year increase in operating revenue in September, while the company's year-to-date revenues after three quarters were down 5 percent due to a dismal start of the year. Giant’s September operating revenue was NT$5.4 billion ($169 million). The revenue report filed with the Taipei stock exchange does not include profitability figures. Giant’s most recent detailed report was for the second quarter, when it showed first-half net profit after tax of NT$435 million, down from NT$560 million in the first half last year. Revenues for the half this year were down 10.5 percent. Other Taiwanese publicly traded bike companies released mixed revenue reports this week: Merida Industry’s September sales were NT$1.7 billion, down 26 percent year-over-year. Year-to-date through the first three quarters, Merida was down 15.4 percent in revenue.  A Merida sales report released to the press this week showed it shipped 87,687 units in September, which was down 4 percent year-over-year. Year-to-date unit shipments were 864,391, down 2 percent from the same period in 2025. Ideal Bike’s September operating revenue was NT$224 million, up 56 percent from the same month last year. Year-to-date, Ideal’s sales were NT$2.0 billion, up 3.5 percent. Chain maker KMC reported September operating revenue of NT$459 million, up 24.6 percent year-over-year. Year-to-date sales of NT$4.1 billion were up 12.4 percent. Sunrace-Sturmey-Archer had operating revenue of NT$54 million in September, down 24.2 percent. Year to date, the component maker is down 20.4 percent in operating revenue.” HPS ANALYSIS: The real question here is the Taiwanese supply chain viability as a component of the overall U.S.-Asian supply chain that includes China, Taiwan and one or more of the other Asian source countries (Vietnam, Cambodia, Thailand). We still have two more meetings between the presidents of China and the U.S., one scheduled in November and one scheduled in December. The “Taiwan Question” may not come up at either, but the overall tariff question(s) will, if not in whole, at least in part. So far, China has reminded the U.S. that the two have “agreed,” in principle, to a U.S. tariff cap of a total of 20 percent on Chinese products. However, transshipping and excess capacity are still unresolved, and one or both may be left blowing in the wind going into the new year. 

10 14 26: “U.S. inflation rises more than expected - here's what is happening with prices.” British Broadcasting Corporation bbc: “U.S. inflation rose by more than expected in the year to September, according to official figures, in the final data release before the midterm elections next month. The pace of price rises increased to 3.7 percent, up from 3.4 percent in the 12 months to August. Inflation was above forecasts, driven by higher gasoline prices, which have risen following disruption to Middle East energy supplies due to the U.S.-Israel conflict with Iran. The elections are being fought over cost-of-living pressures across the U.S. What is inflation? Inflation is the rate at which the price of products or services increases over time. For example, if a bottle of milk costs $1 but rises to $1.10 a year later, then annual inflation for bottled milk is 10 percent. Officials from the Bureau of Labor Statistics measure inflation through the Consumer Price Index (CPI). It tracks the price changes of hundreds of day-to-day items, including fresh food, gasoline, and medical services, to work out the overall level of inflation in the U.S. economy. The bureau updates this so-called basket of goods over time as people's spending and lifestyle habits change. What causes inflation? There are several factors that can cause inflation to rise. If demand for a product outstrips its supply, that can lead to producers raising prices - the craze for Labubu dolls in recent years and the high resale prices are an example. Higher incomes can also lead to higher demand, for example, which in turn pushes up prices. Supply can also affect inflation. If the supply of a product is reduced, but demand remains constant, that can cause prices to rise. A good example of this is crude oil, which is used to make gasoline and diesel. Before the U.S.-Israel war with Iran began, it was trading at just over $70 a barrel, but when the conflict constricted crude supplies, the price quickly rose and is currently over $100. What is the current rate of inflation? Inflation has risen to 3.7 percent in the year to September, which is a higher-than-expected increase fueled by gasoline prices. Car fuel prices jumped by 34.2 percent over 12 months. In September alone, they jumped by 9.1 percent, accounting for more than half of the increase in inflation, according to the Bureau of Labor Statistics. Overall, energy inflation was up by 20.4 percent over the year as prices for fuel oil, energy services and electricity climbed. Fuel oil, used in home heating, was up 74.2 percent over the year. Experts said the U.S. Federal Reserve, which sets the country's interest rate, will be closely watching to see if energy costs begin to affect other areas of the economy, such as food prices, and drive inflation higher. At the moment, food inflation remains subdued. It was flat over the month of September, and was 2.5 percent across the year. Core inflation, which strips out food and energy prices, was 2.6 percent.” HPS ANALYSIS: The biggest single issue for the American bicycle business relative to inflation is the cost to wholesalers and retailers of delivering goods. This is directly related to the cost of diesel to domestic truckers in the U.S. This line-item cost has already increased, and despite the U.S. government’s efforts, will not go down appreciably before the first of the year, and may increase. As the country moves into winter, there will be a creeping up of other cost of doing business line items. Specialty bicycle retailers are advised to watch their costs as closely as possible through the last quarter of 2026 and the first quarter of 2027.

10 16 26: “Fox CEO Dennison steps down as company lowers sales forecasts.” Bicycle Retailer and Industry News: “Fox Factory announced Friday that Mike Dennison is stepping down as CEO and board member. The board has appointed board member Doug Grimm as interim CEO and hired an executive search firm to find a permanent replacement for Dennison, who had been CEO since 2019. The company also announced that its third-quarter results will be below expectations and lowered its fiscal year outlook. Fox's fiscal quarter ended Oct. 2. On Friday, it said preliminary unaudited figures show quarterly net sales of $336 million to $340 million, compared to previous guidance of $355 million to $380 million. Net sales include approximately $33 million in sales from Marucci Sports through the sales of that brand on Sept. 25. ‘Third quarter results were below the company's expectations, primarily due to lower sales and margin at Marucci Sports, which did not deliver to expectations prior to the closing; lower than expected sales and margins in the Powered Vehicles Group driven by a supply disruption and the associated higher operating costs, and unfavorable mix; operating challenges within the Aftermarket Applications Group in its upfit business; and to a lesser extent, softer than expected bike sales in the Specialty Sports Group,’ the company said. Fox is lowering its outlook for the fourth quarter of and full-year fiscal 2026 based on the Marucci sale and the preliminary third-quarter results. It is now forecasting full-year net sales of $1.35 billion to $1.38 billion, compared to prior guidance of $1.42 billion to $1.47 billion. The new forecast for full-year EBITDA is $140 million to $150 million, excluding approximately $14 million of IEEPA tariff refunds received in the second and third quarters, compared to prior guidance of $176 million to $196 million.” HPS ANALYSIS: Given the articles covering increased inflation and the cost of doing business over the last month or two, it seems appropriate to include in this month’s newsletter this article about the Fox Factory CEO stepping down and the company lowering its sales forecasts. Can’t help wondering what the reported financial situation would have been without the $14 million of IEEPA tariff refunds.

10 21 26: “Cannondale is closing Connecticut offices, moving to California.” Bicycle Retailer and Industry News: “Cannondale is closing its longtime headquarters building here and consolidating its U.S. sales and operations in Santa Cruz, California. California is home to fellow Pon.Bike-owned brands Santa Cruz and Cervélo. Cannondale's global headquarters will move from Connecticut to Woudenberg, Netherlands, which currently is Cannondale's European headquarters. Cannondale's global research and development and engineering functions will continue to be based in Freiburg, Germany. The move was announced to Cannondale employees and dealers Wednesday morning. The closure will be final in mid-2027, with some workers staying with the company until the end of next year. For dealers, the move means they will have a single point of contact for the Santa Cruz, Cervélo, and Cannondale bike brands as Cannondale will add outside sales reps who will cover the three brands. ‘The aim is to make it easier for retailers to work with Cannondale and access more of the Pon.Bike portfolio. Each brand will retain its own identity, models and relationship with riders,’ the company said in a media statement. The move will occur over the next six months as the brand closes its Wilton office. ‘The entire office will be closed and almost all employees there will be impacted,’ reads a letter to the department signed by Maggie Lansdale, global vice president of People for Cycling Sports Group, Cannondale's business unit within Pon. ‘The first separations are expected to occur on December 21, 2026, and separations are expected to continue in phases through December 31, 2027. The closure and separations will be permanent,’ the letter continues. The letter includes a list of 143 workers who may be affected by the closure, including their titles, current work location, and anticipated separation date. The dates range from December this year to the end of 2027. The list includes workers who work remotely, including some who are not based in Connecticut. The workers include about 14 account managers, all listed as remote workers, whose final day will be Feb. 28, 2027. Cannondale was founded in Wilton in 1971, taking its name from a train station in the town. The company later moved its headquarters to nearby Bethel, and later moved back to Wilton in 2013. Pon acquired Cannondale as part of its acquisition of Dorel Sports in 2022. The company last announced a workforce reduction in 2022.’ HPS ANALYSIS: I am sorry, but the “…aim is not to make it easier for retailers to work with Cannondale.” It is to reduce operating costs in the U.S. by consolidating operations. I agree that business plans must be amended to improve operating efficiency and profitability, I just believe in being honest with dealers who have crafted their business plans around supporting a brand in their local market. I also remember when Cannondale was founded in 1971 and began its story in the American bicycle business. The brand is still here, but the history has taken a different arc under a European owner.  

Contact Jay Townley: jay@humanpoweredsolutions.com