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Trek Decides to Roll Up Fisher

Published July 16, 2010

BY MEGAN TOMPKINS
WATERLOO, WI—Looking out the window at dirt trails from a suite at the Canyons Resort in Utah, Dave Guettler was preparing to be seriously courted by his Cannondale rep during its dealer event last month.

Guettler, owner of River City Bicycles in Portland, Oregon, is a former Gary Fisher dealer who lost the brand last month when Trek rolled the line into a collection under the Trek umbrella.

While all Trek retailers now have access to the Gary Fisher Collection, retailers that were Fisher-only were either offered the entire Trek line or asked to part ways if they were near established Trek dealers. That left some former Fisher dealers with open-to-buy dollars for non-Trek brands and competing suppliers angling to capture that share.

Guettler said he was one of the unfortunate few forced to end his longstanding Fisher relationship. Although he never carried Trek because The Bike Gallery in Portland is a major Trek dealer, he sold hundreds of Fisher bikes.

“I go way back with those guys,” said Guettler. “It’s an emotional thing to some extent, and a business thing to a lesser extent.”

While he appreciated the unique technologies Gary Fisher offered, Guettler said it’s replaceable. “From that respect it’s not as big of a hit. I will miss the relationship more than the product,” he said.

Hot 29er Category. Guettler was one of an estimated 200 U.S. retailers that carried just Gary Fisher. While that accounts for only 5 percent of the total U.S. dealer base, in a consolidated retail market suppliers are eager to open new doors or increase orders from accounts that will no longer carry the brand.

Gary Fisher was an early champion of the 29-inch wheel mountain bike, but other brands are now catching on. While still a niche category, 29er is one of the few mountain bike segments that is growing. And it’s hitting higher average price points—in the U.S., 65 percent of mountain bike hardtails over $1,000 are 29ers, according to Trek.

“Mountain as an overall category is losing sales. What’s significant is 29er sales—it’s really this year that it just went bam,” said Scott Montgomery, general manager for Scott USA. “Trends start in America for mountain biking. My sense is that you’ll see that escalate around the world.”

Scott is expanding its 29er line to include aluminum and carbon bikes. Montgomery said the timing couldn’t be better with Trek leaving Gary Fisher dealers exposed. “It just so happens that we’re getting really aggressive with 29ers this year,” he said, adding that he increased his 29er forecasts by 15 percent following Trek’s announcement.

Advanced Sports Inc. also feels well positioned to recruit new retailers as it brings new carbon 29ers to market under its Breezer brand. “Any change in distribution creates willingness among retailers to look at options,” said Pat Cunnane, ASI’s president.

Cunnane said introducing a 29er under the Breezer brand, championed by mountain biking pioneer Joe Breeze, offers a good alternative to Gary Fisher. “We have one of the authentic guys coming back into mountain bikes at a time when Fisher’s changing,” Cunnane said.

On the other hand, alternative brands could lose floor space in top-tier Trek stores that now have the opportunity to carry models that previously fell under Gary Fisher. According to Trek, 70 percent of U.S. Trek dealers weren’t selling Gary Fisher 29ers.

Trek’s Strategic Move. John Burke, Trek’s president, said retailers began clamoring last fall for Trek branded 29ers and Dual Sport bikes offered in the Gary Fisher line.

But fulfilling those requests would create unwanted redundancy in the Trek and Gary Fisher product lines, Burke said. “We started thinking, ‘Are we going to develop two lines of 29ers?’ We are going to duplicate a whole bunch of efforts to do that,” he said.

Burke said it made more sense to develop a single line that was best in class. Gary Fisher had product and brand equity in 29ers but Trek had much broader distribution.

“We do quite a bit of business with the Fisher brand, but nowhere near the volume we do with Trek,” said Burke. Since it acquired Gary Fisher in 1993, Trek has developed it into a standalone brand that ranks sixth in the U.S. Nonetheless, global sales for Trek are still 10 times that of Gary Fisher, said Burke.

By making the Gary Fisher Collection available to all Trek retailers, Trek stands to increase retail availability. Trek has three times the number of Gary Fisher dealers in the United States. And with more than 4,000 Trek dealers worldwide compared to 600 Gary Fisher doors worldwide, the brand will gain eight times the potential global distribution.

Burke emphasized the global breadth Trek offers, noting that the majority of Fisher sales are in the U.S. market. Gary Fisher pulled out of Germany, Austria and Switzerland last year because volume was low and demand there was weak for 29ers.

The focused Gary Fisher collection will have the Trek label but remain a distinct line. It eliminates categories that overlapped with Trek’s line such as kids and path, slims down 26-inch hardtails to reduce duplication and expands its 29er lineup. The tighter collection has 51 models compared to 76 models last year.

Burke said the reduction in SKUs will result in better product availability. That should assuage concerns of Trek retailers who reported shortages in 29ers this spring. Trek also upped its volume projections for Gary Fisher by 46 percent.

Bill Randen, general manager of Penn Cycle in Minneapolis, likes the streamlined approach to Gary Fisher. “I didn’t want to see a whole line of Trek 29ers come out to compete with Gary Fishers,” said Randen, who carries both lines in Penn’s six stores. “If they simplify the line and make it cleaner, without so much duplication, then that makes it easier to buy.”

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