Specialized Bikes: The "Not so nice guys"??

[PacMan]

My LBS is going through a little issue with Specialized. Interesting stuff to say the least. Here's a link to a blog where they tell their side of the story. It's an interesting read.

Specialized Bicycle - The Ugly Side

[Pain Freak]

Sorry to say, but that's how business works. I've heard and read about the horror stories of Specialized vendors and it beats me as to why people would even sign a contract with them. They don't care about their vendors who sell their products, they are just a tool to get profits for the company. This is really no different then what 100's of other companies do too though.

They do have a top notch product.

[RacinJason]

That sucks. The big bike cos go after the money. That just means they step on the little guys. Chumba helps all bike shops. As long as I am with them I will always take care of he dealers. Even if I'm not with them I will still help the people in the industry.

[carbonman]

Man that sucks. I hope they can get through this BS and give the Big S the middle finger salute. Specialized and Trek seem to be turning into concept stores and their dealers Must carry at least 80% of their brand. The people that loose out are the consumers as they can no longer compare brands side by side.

[skate]

Well I don't think specialized is fully to blame. I know that bike shop and I know the owners and i'm sure it's not all inocent as it seems.
It seems like a while back they were loosing some of the top notch employees way before this whole specialized ordeal.(there's a reason why)
Now B.W. is becoming a plain bike shop like (cough cough Performance) with most of them NOT ALL, being below average bike shop employees, plus they are extremely over priced all around. And has been that way which started about 2 years ago.

It's all about money, greed or whatever you want to call it and I bet it wasn't just on specialized end.

But as painfreak mentioned in the end it's all about business.

I bet there is more to this story than posted in the blog. After reading some of the comments on the blog it seems that thier may be other people that know that shop pretty well also.

[singletrakk]

specialized is a big company, and all they seem focused on now is their concept stores.They will step on whoever it takes keep their business on top.Sounds like a company with not too many morals.Heard a lot of stories about them.All that money for R&D does pay off though.They have some nice bikes.

[PacMan]

Granted that blog is just the Simmons' side of the story, but I spend enough time in there to know what's up and the majority of the blame goes to Specialized.

I never said they would be the best people to work for, but they treat customers great. And, their prices are on board with every other NON-INTERNET BASED bike shop.

[CalEpic]

Obviously a one-sided story and if true Specialized will be paying them a lot of money. My guess is there is much more to this story. I work in a similar industry that does business through independent retail dealers. A few things jump out at me after reading that blog

#1 - Only an idiot would do business and sign leases based upon verbal agreements. Whether or not verbal agreement pass legal muster, it's just stupid.

#2 - If this dealer can document that they met with S management, S management stated they wanted to grow with the dealer, dealer made financial commitments to realize that growth and S pulls the plug. That's a problem for S. There is an underlying legal requirement of dealing in good faith regardless of what a dealer agreement says.

#3 - Dealer claims an order was held/cancelled without prior notification. If there were not credit issues. This is a huge issue. See point above about dealing in good faith.

#4 - And this is the real issue in my opinion. I believe there were/are financial hardships at this dealership. The term "out of trust" refers to not paying for sold inventory as agreed. Once a dealer loses their ability to finance inventory through 3rd party sources, it's all over. I'm guessing this is the real reason for all this.

One could argue that S should take a kinder, gentler approach to resolving this situation and without first hand knowledge of the finer points we'll never know whether they are truly the big bullies or simply cutting their losses.

Before anyone judges a company or individual I think it's important to ask yourself if you're willing to work for free. Are you willing to be paid less than the next guy doing an inferior job? Dealers, manufacturers, distributors - If you look at the risk/reward ratio for this business it's a joke. People are in it because they're passionate about it. Some more than others but as Mike said, it's a business. It's not a hobby.

Bottom line - I smell a rat in this story and I'm not a big S guy.

C

[PacMan]

You make some good points. I'm definitley not disagreeing with you, but just to play a little "devil's advocate": if I were the Simmons' and I were that clearly in the wrong, why would I then start a Blog saying how evil Specialized is??

Also, in the comments section of the blog, in response to a comment made by someone who read the blog, Mike explains the financial issues and takes responsibility for his mistakes, but it appears Specialized broke the status quo on payment practices, catching them (and other bike shops) by surprise.

If they (the Simmons') are that decidedly in the wrong and they end up going out of business because of it, then they deserve what they get.

[allison]

From a totally different flip side of the coin... A few months ago Bicycle Warehouse opened a shop locally in Temecula. Our LBS (ie Bikes) has been selling specialized for a long time up here, and is a pretty big dealer. The owners/manager got real upset when they found out that BW was moving in just down the street, and have begun cutting back their Spec orders in response. They've still got plenty of bikes in there, but he's said they won't be ordering as much as they used to, since Specialized allowed another Spec dealer to move in so close to him, which he said wasn't allowed per the agreement.

This is all paraphrasing from memory, so..

But, I wonder if our local BW store will stop carrying Spec also. If so, that means not much Spec in our area I guess

FWIW, BW is hella expensive. We checked out stuff at our LBS and BW was a few percent more than their stuff. And they're just a mom-and-pop store.

[Wrecker]

Anyone remember Schwinn??? And I used to think history was a useless subject, funny how things repeat themselves

[soul rider]

more details to the story than is reported...i heard the statement that Pacific owns 51% of Specialized...true or not? that means Pacific would be pulling the strings

[PacMan]

Originally Posted by allison

From a totally different flip side of the coin... A few months ago Bicycle Warehouse opened a shop locally in Temecula. Our LBS (ie Bikes) has been selling specialized for a long time up here, and is a pretty big dealer. The owners/manager got real upset when they found out that BW was moving in just down the street, and have begun cutting back their Spec orders in response. They've still got plenty of bikes in there, but he's said they won't be ordering as much as they used to, since Specialized allowed another Spec dealer to move in so close to him, which he said wasn't allowed per the agreement.

This is all paraphrasing from memory, so..

But, I wonder if our local BW store will stop carrying Spec also. If so, that means not much Spec in our area I guess

FWIW, BW is hella expensive. We checked out stuff at our LBS and BW was a few percent more than their stuff. And they're just a mom-and-pop store.

But Red Hawk Cyclery carries Specialized and that isn't very far from IE Bikes either. Was IE Bikes upset at that too?? Not that I care, I'm just wondering.

[allison]

Originally Posted by PacMan

But Red Hawk Cyclery carries Specialized and that isn't very far from IE Bikes either. Was IE Bikes upset at that too?? Not that I care, I'm just wondering.

Redhawk is on the entire other side of town, actually. They have a working relationship, though, of some kind. I know that the IE road bike team actually goes through Redhawk for most stuff (including bikes and parts). I've never really heard discussion about the two one way or the other.

Redhawk's got a pretty small store, and a small selection of stuff. Though, what store in our area doesn't?

[SAR_boats]

Originally Posted by Wrecker

Anyone remember Schwinn???

Who?

Originally Posted by soul rider

more details to the story than is reported...i heard the statement that Pacific owns 51% of Specialized...true or not? that means Pacific would be pulling the strings

Pacific owns: Pacific, GT, Schwinn, Murray, Mongoose, Roadmaster, Powerlite and Dyno brands.

Pacifics 3 biggest competitors are Giant, Trek and Specialized

Mike Sinyard, who founded Specialized, owns the majority stake. Additionally, Specialized is a private company and is not publicly traded.

[Pho'dUp]

Also, Taiwan based Merida owns a minority chunk of Specialized. Bought in 2001, guesstimated at 30% of Specialized.

Some interesting reading regarding the top (volume) bicycle manufacturers Merida and Giant.

TaiwanHeadlines - Business - Taiwan becomes largest supplier of high-level bicycles to US

Originally Posted by SAR_boats

Who?



Pacific owns: Pacific, GT, Schwinn, Murray, Mongoose, Roadmaster, Powerlite and Dyno brands.

Pacifics 3 biggest competitors are Giant, Trek and Specialized

Mike Sinyard, who founded Specialized, owns the majority stake. Additionally, Specialized is a private company and is not publicly traded.

[PacMan]

Originally Posted by allison

Redhawk is on the entire other side of town, actually. They have a working relationship, though, of some kind. I know that the IE road bike team actually goes through Redhawk for most stuff (including bikes and parts). I've never really heard discussion about the two one way or the other.

Redhawk's got a pretty small store, and a small selection of stuff. Though, what store in our area doesn't?

Well, all the way across town can't be more than 7-8 miles. Of course, it's a lot better than 2 minutes down the freeway.

Ya, the trail and bike shop situation in the Temecula area leaves a little to be desired for sure.

[allison]

Originally Posted by PacMan

Well, all the way across town can't be more than 7-8 miles. Of course, it's a lot better than 2 minutes down the freeway.

Ya, the trail and bike shop situation in the Temecula area leaves a little to be desired for sure.

It's probably 15+ miles (driving). I guess I could look it up, but I don't really feel like it It's definitely more than 8.

Either way, as I said, I think that IE and Redhawk probably work together, and both are privately owned, as opposed to being larger shops that own multiple locations. Not sure if that makes a difference or not also. I'm not involved with either shop and don't keep up with bike retailer politics

[BrewMaster]

I work for a big company (not biking related) that has some smaller dealers. Our credit dept does their best to work with tough accounts, but sometimes you just have to cut your losses and get rid of them. While I have sympathy for a LBS, if you do not pay per the contract you signed then you cannot blame S for enforcing the contract. That is what contracts are for.

Perhaps S is doing this to promote their own concept stores and all that jazz. While this could be true, it still doesn't change the fact that BW did not comply with the contract and pay on time.