2008/02/04

Dorel buys Cannondale



Based just a few blocks from where I work, Dorel announced this morning that they bought Cannondale. Since 2003, Cannondale was owned by Pegasus, a company that buys for pure investments. Dorel on the other hand also bought Pacific Cycles in 2004, Pacific is the company that runs GT, Schwinn and Mongoose among others. While some are quick to come to the conclusion that Cannondale will move lower in the quality echelon of the bike world like GT and Schwinn, let's remember a few things.

First, GT and Schwinn went belly up before they were bought by Pacific and then Dorel. Since their acquisition, they have steadily moved back to be more profitable companies but also showing better products. Since 2004, GT went from producing dinosaur era bikes that seemed decades too late to cranking out modern technology like their internal geared downhill bikes to trendy sweet looking carbon bikes.

Dorel also announced the reorganisation of their bike brands, one division for mass marketed bikes sold in big floored stores (commonly known as the last places to buy bikes from) and the other for higher end bikes sold in dedicated bike stores. Cannondale will obviously be the star of the high end brands. Officials from both Dorel and Cannondale happily promised Cannondale would keep on doing what they do best and even go beyond by keeping innovation, design and passion as the key to their future. We will see what the future holds but Cannondale made their place in the industry by doing things their own way, by setting standards and not follow them and by doing so with quality second to none. If Dorel did their homework, they know exactly what they got their hands on and will only help the people at Cannondale to keep going forward with amazing ideas and products.

So Dorel guys, feel free to contact me for some advices, we can go have a lunch together any weekdays.

1 comment:

Slippery Pete said...

I think one more sign that this may be a good thing for the future of Cannondale is the fact the Jeff Frehner will be overseeing Cannondale and GT. I don't know all that much about him, but two things stand out.

First, he used to work for QBP (the same co. that owns Surly and Salsa). So he does have experience working for a company that focuses on IBDs and has a great reputation amongst IBDs.

Second, he is giving up overseeing Schwinn and Mongoose to concentrate on Cannondale and GT and the IBD market. From a career standpoint, it seems like a step down (or at least lateral) for him--going from managing three brands to two. Usually, as people progress in their careers, they try to put more brands, products, employees, etc. underneath them. That's how their power in the company is determined.

What this second point suggests is that he is being honest when he says that cycling is his "passion". He's scaling back what he oversees to concentrate on this new venture and ensure its success.

Time will tell, I guess.

--Slippery Pete