Wednesday, November 29, 2017

News Flash: Niner Bikes Files For Bankruptcy

An early Niner RIP-9: The company is reportedly being sold to an investor group.
A surprising story broke today by "Bicycle Retailer and Industry News" states that Niner Bikes has filed for Chapter 11 bankruptcy ahead of a planned sale to an investment company. The move is claimed to help expedite the the sale in the "...cleanest and fastest way to do it.", according to company co-founder, Chris Sugai.  

Of course, Niner Bikes made their name on the 29 inch wheel, which they famously championed early on and stuck with doggedly although 650B wheels and plus sized wheels became more popular within the last five years. The company even stayed out of the fat bike craze, much to their credit, I might add.

So, was this devotion to a single wheel size killing the company? Apparently not. According to "BRaIN", in this story published today, Niner stands in good stead financially. However; it appears that they cannot fund new R&D, new product lines, and yes, that means e-mtbs, which are the hottest selling bicycle in Europe by a long shot right now.

Added to this is that I have read or heard somewhere that Niner sells more of its gravel/all road/CX bike product than it does the mountain bike stuff. This isn't due to a dogged devotion to 29"ers, but most likely it is just what the article in "BRaIN" is saying- a lack of engineering and product development capabilities. This hinders growth and innovation on their mtb side, and also it affects the ability to diversify. (So, yes, maybe Niner is thinking they cannot compete the way they want to with the limited array of products they offer now.)

Interestingly, the "BRaIN" article closed out with this quote from the Chapter 11 filing:

"With a recapitalized balance sheet, the Debtor will be able to, among other things, hire the engineers and product managers necessary to design bikes for women, to begin offering kid’s models, to create electric mountain bikes, and continue to increase models with different wheel sizes. The Debtor also believes that by enlarging their omnichannel footprint they will be able to increase brand awareness and engagement, ultimately leading to substantial revenue growth."

Note the word "omnichannel". Of all the things coming out of this news story, this reflects what I think is going to be the most weighty of impacts. Not only for Niner's future, but the cycling industry as a whole. We won't be buying cycling stuff in the way that we once did anymore, nor in the way we think will will. It's going to look radically different before all is said and done.

Still, as I posted earlier today, it is the "pie" that needs growing, not the "how you sell it" that needs fixing so much. Unless the industry can entice people to ride by making safe places to use bicycles, then how you try to sell them will not make much difference.

10 comments:

Adam said...

"Unless the industry can entice people to ride by making safe places to use bicycles, then how you try to sell them will not make much difference."

YES YES YES

The bike industry will never thrive until/unless this is addressed.

Smithhammer said...

The industry might also do well to take a big step back from doing everything they can to convince people they need to spend $5000 or more in order to buy a "quality" bike and be considered a "serious" cyclist. After having taken that step back toward sanity, they might try investing in what people truly, actually want and need, and offering them quality bikes at reasonable price points in order to do, rather than this fool's errand they have been on for years, attempting to convince people they need all sorts of things that they actually don't and that they need to open a new line of credit in order to do so. How in the world is anyone really wondering why the bike market is shrinking?

The industry (and many LBS) have done this to themselves, attempting to create a ridiculously elitist culture that makes the average joe feel like a cheapskate, an idiot and a Fred five minutes after walking in the door. And instead of paying attention to this self-inflicted (and in my opinion), mortal wound, they continue to chase the next "thing" that will somehow miraculously save the industry. Right now, the perception seems to be that the latest magic pill will be e-bikes. Let's re-visit this folly in 5 years and see how that worked out...

Bruce Smithhammer said...

Funny - I hadn't even read your previous post about "Chasing the next big thing" when I posted the comment the above. Seems like we're on the same page. ;-)

Irishtsunami said...

I have a hard enough time keeping my bike clean and in working order without adding a motor. I can only imagine what a tune up and replacement batteries will add up to. Not to mention the planned obsolescence of everything in the bike industry.

Rainier Wolfcastle said...

With an influx of cash will we finally see a production version of their full suspension gravel bike?

Doug Mayer said...

I agree with all of Smithhammer's points above, but I wonder how do we start chipping away at the elitist, cater-to-the-rich culture in cycling? Do we get the tastemakers to ride and promote less expensive bikes? Is it a symptom of LBS attitudes? I know nothing about how bikes get marketed or sold, I just ride 'em.

Greg D said...

Smithhammer-
Very well said.

Guitar Ted said...

@Doug Meyer- In my opinion, the change has to come from the top. Brands have to get away from racing culture-centric thinking and marketing. Like I have said, that doesn't fit real well with the Lycra clad, mostly white male industry person that generally makes up the bulk of the heads of brands and marketing. Either they change their attitudes or they would need to be replaced with a more diverse labor force that reflected the nation we live in better.

Then, as I have stated as well, the cycling industry needs to fund and back cycling-centric ideas for places people can be and feel safe to ride a bicycle.

Unless you have those two things up to speed and in place, we will be in the same old circular way of thinking and acting the cycling industry has been in for decades.

Chris Sugai said...

Guitar Ted, thanks for posting a fair and balanced account. I agree we need to grow the cycling industry the vs making new standards that only incrementally improve the riding experience. IMBA, People for Bikes and NICA are just a few that deserve our support and dollars to help non-riders find the love we all enjoy

Peace,
Chris Sugai

Asheville Thumper said...

I own two Niners...RLT9 and SIR9 (27.5+). Both bikes have been nothing but fantastic for how I use them. My only regret is purchasing the alloy RLT9 when I should have waited for a steel RLT9 in my size to be available!

I hope Niner can come out of this and be successful. I truly like their bikes, and I have always had a positive experience with their customer service. To me, Niner falls somewhere in the Salsa/Surly line of bikes. They offer enthusiasts something just a little bit different at price points that are attainable with the "star" builds.