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Iron Horse Pulls Out Of Specialty Channel

Published August 1, 2008

BY NICOLE FORMOSA

HOLBROOK, NY—News that Iron Horse Bicycle Company would discontinue sales of its bikes in the independent bicycle dealer channel drew mixed reactions from the brand’s retailers—some were let down, while others said they saw the move coming.

“It’s a big disappointment for us. We have a lot invested in the brand and we have for a number of years supported the brand in terms of how we represented it in the shop and how our sales staff sold the brand,” said Tani Walling, owner of The Path Bike Shop in Tustin, California.

Walling had carried Iron Horse bikes since 2004 and said the brand made up about 20 percent of the shop’s complete bike sales. He has pulled his remaining Iron Horse stock from the sales floor and will liquidate the product.

Cliff Weidberg, chief executive officer of Iron Horse Bicycle Company and World Wide Cycle Supply announced last month that, as of Sept. 1, Iron Horse would sell its middle and lower priced bicycles only in the sporting goods channel in the United States.

Its high-end bikes will be sold exclusively through Randall Scott Cycle Company, an online outlet with a showroom in Boulder, Colorado.

That company’s president, Randall Scott, is Weidberg’s son, according to several former Iron Horse employees who asked not to be named. Weidberg refused to comment on his relationship with Scott, but said that he has no financial stake in Randall Scott Cycle Company and that it’s a “separate, independent company.”

Weidberg maintains the reason for the change in business strategy stemmed from competition from companies like Trek and Specialized who ask dealers to make their bikes the No. 1 or No. 2 brands sold in their stores, pushing out niche brands like Iron Horse.

Over the past five years, the sporting goods channel had overtaken the specialty channel in terms of sales of Iron Horse bikes, Weidberg said.

“It became clear to us that we had to do something to protect our brand because we didn’t want to be the third, fourth, fifth, sixth brand in a store. You really don’t have a lot of possibility to be important if that’s where your position is,” Weidberg said. Iron Horse will be the top brand in Randall Scott’s retail store.

Weidberg views the Internet as playing a larger role in the future of bicycle sales and doesn’t believe that ramping up online sales will hurt the brand’s reputation.

“I think that probably is the way it’s been characterized for many years and I think it’s an old-fashioned view. I think the Internet represents a faster and more efficient way for the consumer to buy products,” he said.

International distribution channels will not change, Weidberg said.

Former Iron Horse dealer Brian McInnis, owner of JRA Cycles in Medford, Massachusetts, wasn’t surprised to hear the brand was pulling out of the IBD, and even says he saw it coming.

McInnis dropped the brand last year after hearing that Iron Horse’s license with Dave Weagle for his DW Link suspension system would not be renewed. He picked up Pivot, which uses the DW Link, and filled the void left by Iron Horse’s bread-and-butter, $300 to $400 bikes with GT’s pricepoint line.

“Luckily I went with my gut feeling and we decided not to take the bikes (in 2008),” McInnis said. “I just had a feeling that something was going wrong.”

Weagle said he decided in July 2007 not to renew the license with Iron Horse, which runs through March 31, 2009, because he wanted to take the DW Link in a different direction.

Along with Pivot, Independent Fabrication and Ibis also hold licenses for the DW Link, and Weagle will announce a fourth licensee before Interbike that will develop a downhill bike using his suspension system. Many gravity riders consider Iron Horse’s DW Link Sunday to be one of the best downhill bikes available.

For its 2010 bikes, Iron Horse has a license for a new suspension system, although Weidberg declined to elaborate on the specifics or whether the company would change its existing line-up.

It wasn’t just the impending loss of the DW Link that had JRA’s McInnis questioning Iron Horse. He had also grown frustrated vying against the Internet for sales of Iron Horse bikes. At first, Iron Horse would allow him to match online prices and offset the difference so he could keep his margins intact, but when the company changed that position, he was out of luck.

“Increasingly people would come in here, they’d test ride the bikes and buy them elsewhere,” McInnis said.

Bob Allen, sales manager for Mojo Wheels in Denver, Colorado, did well selling Sundays, but said there’s no love lost for Iron Horse, which was difficult to deal with in warranty situations and forced independent dealers to compete with wholesale online prices.

“I’m not going to miss their business, I’m not going to miss their company, I’m not going to miss their bike,” Allen said.

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