# Article RE:Pacific (Doral) buyout of Cannondale



## dr.mediocre (May 7, 2008)

I hope that Cannondale doesn't suffer the same fate as other Pacific Bikes such as Schwinn, GT and Mongoose. These bikes were the best back in the day...


When stroller-maker Dorel Industries bought a high-end bicycle
maker, the Montreal company was simply thinking diversification.
Then the mud-slinging, poaching and intimidation began. Welcome
to the clubby world of elite cycling.

In the exclusive world of high-performance cycling,
Dorel Industries Inc. is facing an uphill climb.

Fitness-obsessed baby boomers with disposable income to burn are
flocking to the high-end bike segment, paying upward of $2,000 and
as much as $10,000 for the ultralightweight, high-tech precision
machines that have become must-have toys of the day.

Dorel, which makes children's gear and furniture and is already a major
player in mass market bicycles, sought to tap into the growing high-end
segment by scooping up prestigious manufacturer Cannondale Bicycle
Corp. of Bethel, Conn., in February.

But in cycling circles, Montreal-based Dorel
has come under attack for its high-low strategy.

Flogging a mass market line of bikes - including the famous Schwinn
brand - while selling the pricey and storied Cannondale through
independent bike dealers will weaken specialty sellers, one competing
high-end maker says.

Michael Sinyard, the founder and president of Cannondale rival
Specialized Bicycle Components, recently sent a letter to independent
U.S. bike dealers urging skepticism regarding Dorel's commitment to
maintaining the exclusivity of Cannondale and its other pricier models.

Dorel's acquisition of Cannondale is "bad news" for the
independent bicycle dealers channel - the only one through
which the high-performance bikes are sold, he warned.

"I believe if dealers continue to sell and promote Cannondale they are
strengthening this mass market conglomerate and eroding the specialty
retail channel," Mr. Sinyard wrote in the letter dated Feb. 11.

He charged that Dorel subsidiary Pacific Cycle already diluted the value
of top-line brands it acquired - such as Schwinn and GT - by shifting them
into the mass-merchant channel. Now, he said, the Cannondale name is
at risk.

In a letter of response to the dealers, Dorel's Cannondale Sports Group
president and chief executive officer Jeff Frehner - who logs between 200
and 250 miles a week on one of his 15 racing bikes - called Mr. Sinyard's
charges the "wild speculations and mud slinging of a competitor." He
mused that "perhaps Specialized is intimidated."

His division at Dorel remains committed to innovative product
development, dealer programs to increase revenue and profits,
improved marketing efforts in the independent dealers channel
and other measures, he said.

Specialized also apparently targeted Cannondale staffers, sending
out e-mail messages to Cannondale engineers trying to lure them
away. A human resources manager wrote in the e-mail, dated Feb.
5, that she would be travelling to Bethel in the next few weeks in
hopes of meeting with some of the Cannondale people. News of the
poaching raid appeared in trade publications online.

Dorel tried to turn Mr. Sinyard's broadside to its advantage, running an
online Cannondale ad saying: "Who has the best engineers in the industry?
Specialized knows. Mike Sinyard must be looking for higher standards."

The ad concludes that Cannondale's staff "can't be poached."
Mr. Sinyard was not available to comment further on the issue.

In a recent interview, Mr. Frehner, 39, said Cannondale is focusing
on relations with dealers. "In the last 90 days we've been doing a
lot of work to solidify our position in the dealer network," he said.

"There's been a lot of back-and-forth, which
didn't have to occur but it did," he added.

Dorel's chief financial officer Jeffrey Schwartz said: "We want to
make it clear that having Dorel behind Cannondale means we're going
to aggressively invest in new products."

Dorel created the new Cannondale Sports Group unit, which is separate
from the mass-market Pacific Cycle unit, and has solemnly sworn not to
dilute the Cannondale brand, Mr. Schwartz said.

But there is some convincing still to do.

The fact that Dorel is in other businesses of a more pedestrian
nature - ready-to-assemble furniture, children's car seats and
strollers - hasn't helped. Some critics have taken issue with the
notion that a consumer products manufacturer supplying Wal-Mart
can be trusted to maintain the higher standards required to design,
develop and sell top-end machines.

On the Internet, Dorel's efforts to break into the high
end of cycling fuelled discussion among enthusiasts.

"There's nothing hip about buying a bike from a company that also sells
furniture and baby strollers," one bike chat line participant wrote.

Arden Cottle, owner of the Out-Spoke'n specialty bike shop in Lake
Mary, Fla., thinks the controversy needs to be put into perspective.
"This is quite silly. All of us need to be focused on running, to the best
of our abilities, our companies," she said in a telephone interview.

"Look at it this way: Dorel has a lot of money to market Cannondale
as a label that deserves that kind of support," she said.

A big selling point is that most Cannondale frames continue to be
assembled in the U.S., whereas rivals Specialized, Trek Bicycle
Corp. and Giant Bicycles have theirs made offshore, she said.

"It's a better quality, nicer weld, with more patents."

DOREL INDUSTRIES (DII.B) Close: $31.03, down 26¢


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## eldarko (Oct 27, 2007)

This is an effort by competitors to generate concern surrounding the acquisition, and move their product into Cannondale stores. There is no reason for Dorel to interfere with how Cannondale makes bikes. They will continue to make the great bikes they are known for. If you buy into this FUD that Specialized is trying to spread shame on you.


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## zamboni (Sep 11, 2003)

Just like Swatch they own Omega,Longine,Rado to name a few, is that mean they were all poor quality watches ? Same rule apply to Cannondale if Dorel makes the worng move no one is going to buy Cannondale product with bad design & quality.


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## funhog1 (Jan 26, 2003)

....and next time...can someone help Dr. Mediocre learn how to spell "Dorel"

zzzzzzz zzzzzzz
zzzzzz

zzzzzz
zzzzz


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## dr.mediocre (May 7, 2008)

funhog1 said:


> ....and next time...can someone help Dr. Mediocre learn how to spell "Dorel"
> 
> zzzzzzz zzzzzzz
> zzzzzz
> ...


I can spell a$$hole just fine.


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## dr.mediocre (May 7, 2008)

zamboni said:


> Just like Swatch they own Omega,Longine,Rado to name a few, is that mean they were all poor quality watches ? Same rule apply to Cannondale if Dorel makes the worng move no one is going to buy Cannondale product with bad design & quality.


My first FS Mountainbike was a Cannondale Super V that I found at the flea market. This guy had about 20 bikes in a big pile on the back of his flatbed. I saw the Super V and asked what he wanted for the "old beatup white one" and he said $50 with the wheels. I jumped on that quick. All it needed was some TLC and cables. I spent all of $25 tuning it up and rode that thing for 3 years. It was unbreakable. I really liked the head shock (I may be the only one that has that opinion). Anyway, I always loved the fact that it was an awesome, classic bike and always got mad props from people on the trails. I ended up selling it to a guy that does a yearly "classic ride" where all bike must be at least 15-20 years old. He gave me $250 for it.

I wish I had it back, it was always a head turner at the trails. 

Lets just hope that Dorel / Pacific bikes holds true to the Cannondale legacy. I would hate for them to go the way of Schwinn, Mongoose, Diamondback as their recent history would suggest. My local REI in Atlanta started carrying Cannondales last year at a very low pricepoint as compared to the LBS that used to sell them only 2 years prior. . I hope that's the case. Before that the highest end bikes REI had were K2's. If the quality remains and the pricepoint is lower, that can only be a good thing


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## Chainstay (Mar 13, 2004)

*It's a cheap shot from Specialized*

I think this is an interesting article. It's an example of some pretty dirty pool on Specialized part. In my view they are questioning the passion that the new owners of the Cannondale Brand have for cycling and they are going right to the Cannondale dealers to do it. 

I am neither a Spec nor a Cannondale owner but I have a lot of respect for the tradition and innovation of the Cannondale organization. I wouldn't throw that down the road because of new owners without giving them a chance to prove themselves. 

A cheap shot for sure, as if Spec was the epitome of doing everything for the sport and nothing for the shareholders.

I am a Marketer so I'm also interested in what if any social media are being used in the smear campaign

http://www.reportonbusiness.com/servlet/story/RTGAM.20080514.wrdorel15/BNStory/robMarketing/home


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## zamboni (Sep 11, 2003)

For what I was told by Cannondale rep Dorel will leverage with Cannondale specialty for their GT brand bikes and leave them alone for now. I can see they will move the low end products to oversea in the next 12 months that leave PA facility to MFG Super Six and perhpas GT bikes.


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## funhog1 (Jan 26, 2003)

*Better Stick to whatchcu know then..*



dr.mediocre said:


> I can spell a$$hole just fine.


better stick to whatchu know then


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## robertburns3 (Jan 11, 2007)

zamboni said:


> For what I was told by Cannondale rep Dorel will leverage with Cannondale specialty for their GT brand bikes and leave them alone for now. I can see they will move the low end products to oversea in the next 12 months that leave PA facility to MFG Super Six and perhpas GT bikes.


Many of the low-end bikes went overseas prior to Dorel's purchase. Unfortunately.

As far as Dorel screwing their dealers, as the Specialized letter suggests, Cannondale has had rocky relationships with their dealers for a long time, as have other makers. I am not sure we have have any reason to think that Dorel could make it worse.


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## zamboni (Sep 11, 2003)

It's all about profit for Dorel and I hope they will leave Cannondale as a seperate unit and let them develop & continue what they do best for Cannondale road bike.


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