Last week, we reported about turbulent times in the European bicycle industry as several prominent names found themselves in financial difficulties. Now, the focus shifts to North America, where the cycling sector is grappling with similar challenges, marked by restructuring efforts and insolvency filings.
GT Bicycles: Restructuring Amid Economic Pressures
GT Bicycles, an iconic brand in the cycling world, is implementing significant cost-cutting measures under the ownership of Pon Bike. CEO Jason Schiers recently announced in an interview with the North American industry magazine Bicycle Retailer & Industry News a series of changes aimed at stabilizing the company, including workforce reductions and a pause on launching new models for the foreseeable future. These moves aim to address persistently high inventory levels and refocus efforts on clearing existing stock.
The company’s decision follows a challenging year in which high inventory, supply chain challenges, and sluggish consumer demand created financial strain. GT Bicycles has also announced it will no longer provide direct sponsorship to athletes, ending long-standing partnerships in an effort to streamline operations. Warranty and service needs will now be managed through the existing structures of Pon Bike’s Cycling Sports Group. While the restructuring efforts are significant, Schiers highlighted that the goal is to preserve the brand’s core identity and prepare it for long-term growth.
Rocky Mountain Bicycles: Filing for Restructuring to Avoid Bankruptcy
Rocky Mountain Bicycles, one of Canada’s most iconic mountain bike brands, has filed for creditor protection under Canada’s Companies’ Creditors Arrangement Act (CCAA) in a bid to restructure its operations and avoid bankruptcy. The move comes after a difficult period for the company. According to a press release sent out on December 19th, Rocky Mountain faced a sharp decline in sales, compounded by overproduction during the pandemic, leading to significant inventory challenges.
The filing is intended to provide Rocky Mountain with the legal framework to continue operations while developing a plan to stabilize its finances. The company has announced a Sales and Investment Solicitation Process (SISP), seeking new investors or potential buyers to secure its future. Ernst & Young has been appointed as the monitor to oversee the restructuring process. Despite this setback, the brand is determined to maintain its identity as a leading innovator in mountain biking.
