Trek plans to "right size" with 10% cuts to spending
03-06-24, 07:30 AM
#1
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Trek plans to "right size" with 10% cuts to spending
https://bicycleretailer.com/industry...-cuts-spending
Looks like Trek is pulling back. Slow sales + high inventory levels. Not a good mix.
Looks like Trek is pulling back. Slow sales + high inventory levels. Not a good mix.
03-06-24, 07:46 AM
#2
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It does make me wonder...How much of the Boom led to increased cash reserves for rainy days and how much landed in investor pockets? Not that it matters much. 10% Isn't enough to warrant any concern. There are probably a lot of bought/forced out Ma&PA's happy to be debt free and free of the bust.
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03-06-24, 10:41 AM
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Buying up and running failing, or barely treading water shops not a good business move? Who knew.? When they start closing shops, then that will be the.....Oh wait, too late....Couldn't happen to a nicer company. Welcome to the IBD retail jungle, not so easy, eh?....
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03-06-24, 12:13 PM
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The best bike shop in the county west of Portland was Bike Gallery. For decades. Trek dealer but also a decent selection of other brands. Excellent shop and mechanics. A few years back, it started evolving to a Trek concept showcase. Stopped carrying other brands. I rarely used their mechanics because I do my own work but they had a decent selection of parts and often old ones. Now, if your bike isn't a newish Trek or very closely compatible, they don't have a clue or the parts. Funniest thing about all this is I now go up the street to REI, forever infamous for its very mediocre selection of bikes and gear for serious riders, to talk to a real mechanic who can bring out the box of those screws used years ago! (And knows what I am talking about!)
If Trek downsizes that shop, it will become that long dead insect, just a hollow shell.
If Trek downsizes that shop, it will become that long dead insect, just a hollow shell.
03-06-24, 01:01 PM
#5
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Not surprising as they expanded staff during the pandemic and sales were brisk. With sales back to pre-pandemic levels they need to reduce overhead.
It is tough for these companies with the need to produce products for many diverse markets with mountain bikes and hybrid bikes and gravel bikes and electric bikes as well as traditional road bikes. They are also competing against bikes being made in Taiwan and China with their lower labor costs.
It is tough for these companies with the need to produce products for many diverse markets with mountain bikes and hybrid bikes and gravel bikes and electric bikes as well as traditional road bikes. They are also competing against bikes being made in Taiwan and China with their lower labor costs.
03-06-24, 01:49 PM
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Welp, one easy way to cut the SKUs is to stop carrying spare parts for older bikes. So if you bought a Trek before 2021, better stock up now!
03-06-24, 01:58 PM
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Meh.
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03-06-24, 02:49 PM
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03-06-24, 07:42 PM
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03-06-24, 07:47 PM
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That jersey came from the downtown Portland store. My GF was going to buy me one as a surprise during CO in 2012, but they ran out of my size before she could..She later contacted the shop and they shipped her one even though it was not something they normally did. I have a pair of booties I bought from that shop before the 2005 CO.
03-07-24, 05:58 AM
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That’s a shame
Some hard-working people are going to lose their jobs, it sounds like.
i hope they will “right size” some executives out of their jobs (or at least across-the-board executive pay cuts) and not just the little guys trying to pay their rent. Executives are the first to take credit when things go right; they should share in the pain when things go wrong.
As for “hasn’t got a sales target for 15 months” that may not mean anything other than someone is setting unrealistic targets. They did that at my old company, with the “shoot for the stars, hit the moon” mentality.
As for reducing SKUs, I feel like there are way too many choices; they can just be smarter about what they offer. Do they really need so many Domane and Madone models?
One thing missing from their line up is affordable eBikes. (And not just Beach cruisers from Electra) Something in the $1,000 - $1500 range.
i hope they will “right size” some executives out of their jobs (or at least across-the-board executive pay cuts) and not just the little guys trying to pay their rent. Executives are the first to take credit when things go right; they should share in the pain when things go wrong.
As for “hasn’t got a sales target for 15 months” that may not mean anything other than someone is setting unrealistic targets. They did that at my old company, with the “shoot for the stars, hit the moon” mentality.
As for reducing SKUs, I feel like there are way too many choices; they can just be smarter about what they offer. Do they really need so many Domane and Madone models?
One thing missing from their line up is affordable eBikes. (And not just Beach cruisers from Electra) Something in the $1,000 - $1500 range.
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03-07-24, 06:08 AM
#12
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Calsun, Trek has almost all of their bikes manufactured in China and Taiwan. The models the brand relies upon for survival are mostly made in China.
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03-07-24, 08:37 AM
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Need to add Cambodia to the list. Or that’s the recent label I saw.
Mmm. I may be should go get the bike I’ve been eyeing before the go out of business. 56 or 58? Carbon or aluminum?
Mmm. I may be should go get the bike I’ve been eyeing before the go out of business. 56 or 58? Carbon or aluminum?
03-07-24, 08:49 AM
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03-07-24, 09:28 AM
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Could be wrong, but I believe that Trek no longer manufactures any production framesets in the U.S. They may still build some development prototypes in-house, though I'm not sure about that.
03-07-24, 09:33 AM
#16
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Not surprising as they expanded staff during the pandemic and sales were brisk. With sales back to pre-pandemic levels they need to reduce overhead.
It is tough for these companies with the need to produce products for many diverse markets with mountain bikes and hybrid bikes and gravel bikes and electric bikes as well as traditional road bikes. They are also competing against bikes being made in Taiwan and China with their lower labor costs.
It is tough for these companies with the need to produce products for many diverse markets with mountain bikes and hybrid bikes and gravel bikes and electric bikes as well as traditional road bikes. They are also competing against bikes being made in Taiwan and China with their lower labor costs.
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03-07-24, 09:38 AM
#17
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I needed a random small part last year and went to a Trek shop down the street. The guy looked at me like he was learning a new English word for the first time. The way these shops are run nowadays, if something didn't come out of the Trek factory box, then they don't know what it is. Totally useless shops.
03-07-24, 12:19 PM
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I needed a random small part last year and went to a Trek shop down the street. The guy looked at me like he was learning a new English word for the first time. The way these shops are run nowadays, if something didn't come out of the Trek factory box, then they don't know what it is. Totally useless shops.
03-07-24, 02:12 PM
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If you search for info on the web, the situation does not appear to be good.
03-07-24, 03:03 PM
#20
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'Bikefarmer' on Youtube has an entertaining Trek rant.
In a related event, Trek just set up a new fancy store in our town.
In a related event, Trek just set up a new fancy store in our town.
03-07-24, 03:22 PM
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This isn't just Trek. It's all the bike companies. The Covid boom has ended and now they have to face reality.
Quite frankly, I'm glad this is happening. I get that the market dictates price but it went too far and we were being bent over on bike and bike component prices. I'm seeing Fox Factory forks right now going for $500-$600 that were normally $1000+
I also just bought a bike 20% off retail.
Quite frankly, I'm glad this is happening. I get that the market dictates price but it went too far and we were being bent over on bike and bike component prices. I'm seeing Fox Factory forks right now going for $500-$600 that were normally $1000+
I also just bought a bike 20% off retail.
Last edited by prj71; 03-07-24 at 03:26 PM.
03-07-24, 08:09 PM
#22
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No it's not just Trek but Trek has been making poor business moves for a while. Keeping stores open that are under performing just to get your name out there isn't great for business. Shutting down and buying out IBDs to turn them into Trek corporate stores is in the same vain.
03-08-24, 10:14 AM
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False.
From Trek's Wikipedia page, end of the very first paragraph.
By saying "nearly all" it implies that some are still US-made. (top of the line, I think)
From Trek's Wikipedia page, end of the very first paragraph.
By saying "nearly all" it implies that some are still US-made. (top of the line, I think)
03-08-24, 11:56 AM
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https://www.bicycleretailer.com/indu...impending-cuts
03-08-24, 01:48 PM
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"It's like nothing I've ever seen in my 30 years." Isn't that the same phrase we heard from the summer of 2020 through the summer of 2021?
What goes up must come down. (Except for a few NASA missions.)
What goes up must come down. (Except for a few NASA missions.)