Pacific Cycles (GT/Mongoose/Schwinn) buys Cannondale

It's always interesting when one company buys another. The effects further down the distribution chain can sometimes be more like nuclear fallout than anything else.

A couple years ago SRAM was almost a nobody company in cycling, then they purchased Avid (brakes), Truvativ (components) and most notably RockShox suspension. Almost overnight SRAM was a REAL somebody with leverage. One thing that SRAM Corp did was insist on was consolidation of all it's distributors. The guys in SA, Greenwall, doing RockShox at the time found themselves losing their agency to Cape Cycle Systems. That happened the world over. Many called foul - the smaller guys always seem to loose out. Now it's forgotten.

Last year Hayes bought Manitou suspension and Ritchey bought Syncros. Changes are coming I hear.

The latest in the soap opera of the bicycle industry is the sensational purchase of Cannondale bicycles by the parent company of Pacific Cycles who own the GT, Mongoose and Schwinn brands. You may recall that Cannondale was bankrupt in 2003 and sold to an investor for a paltry $58m. The effects of that were similar to what happened to RockShox except ProBike (Raleigh) lost Schwinn to Omnico who distribute GT and Mongoose in SA. Pacific insisted that their distributors handle all three of their brands - the result was that Omnico landed up with three mainstream bicycle brands under one small Cape Town warehouse roof.

Can you see where I'm going with this?

Cape Cycle Systems distribute Cannondale. Omnico distribute all of Pacific Cycles other brands. If they apply the same philosophy as they have in the past - CSS will lose Cannondale to Omnico. I reckon Omnico will like that. Talk about full circle.

However, if Pacific decide otherwise: "Our intention is to build a world-class company that dealers will want to buy from," said Schwartz. The plans from parent company Dorel are that Pacific Cycle will become a stand-alone division with an exclusive focus on mass merchant customers holding Mongoose and Schwinn brands; and Cannondale & GT in another division. That will certainly throw the cat among the pigeons too.

If that scenario plays out Omnico could find itself loosing GT to Cape Cycle Systems so that Pacific can consolidate GT and Cannondale under one company banner - and not by the decision of either CSS or Omnico. No, when these big US profit driven companies make a decision they're not thinking of the effects to the SA bike industry!

Watch this space.