Specialized & Giant Pull out of Performance

This story comes courtesy of Bicycle Retailer and Industry News.

AUGUST 01, 2005 — ASPEN, CO (BRAIN)-€ Performance, the nation’s largest bicycle retailer, has discontinued its relationship with Specialized and Giant. Performance is also overhauling its 10 Supergo stores into large-scale Performance operations.

Late last week Giant and Specialized announced, individually, that they had terminated their relationships with Performance in agreements with the retail giant. Performance chief executive officer Garry Snook, however, said the decision to end business with both brands was not an agreement between parties, but exclusively a Performance decision.

Performance had been the largest single customer for both brands.

Specialized and Giant both announced the split as positive moves for their remaining dealers.

“Our vision is to be the best bike brand in the world”, said Specialized founder and president Mike Sinyard. “To achieve this vision, we first have to fulfill our mission of becoming the brand of choice of discerning customers and dealers and the supplier of choice for the full-service dealer. We are constantly re-evaluating our channels of distribution and making adjustments to help us fulfill that mission.”

Steve Boyd, Giant USA’s director of sales, said the “decision supports our core goal of remaining dedicated to our loyal dealers while also creating new opportunities for retailers interested in working with Giant.”

Performance’s reason for discontinuing the two brands, according to Snook, was surprisingly similar to an oft-heard complaint from smaller, mom-and-pop retailers: frustration with manufacturers’ demands.

“We believe that we should be the party that decides how to be the retailer in the relationship. We believe that we should decide where a store should be opened, and how they should be merchandized,” Snook said. “Don’t get me wrong, we spend a lot of time working with our vendors in a partnership. But working with them, it absolutely was not a partnership.”

Performance recently opened a flagship 12,000-square-foot store in Atlanta, a decided departure from the company’s traditional 5,000-square-foot operations. Performance has a few other large stores, a format with which it has been experimenting.

“What we wanted to test was whether we could position a Performance store close to where Supergo is in size without the big three of Trek, Giant and Specialized,” Snook said. “And they are working, they are on sales plan.”

Another test in Atlanta was the addition of Schwinn/GT to the mix of Fuji and Iron Horse. Schwinn/GT bikes will soon be carried in all Performance locations.

“They have been like a breath of fresh air,” Snook said, referring to Pacific Cycle, which owns Schwinn/GT.

In addition to the Supergo stores, Performance will convert ten of its largest Performance shops into the large-scale format.

“The larger stores will carry everything that the small ones do, but with more high-end product,” Snook said.

Performance will keep the Supergo Internet and mail order business intact with the Supergo name.

For the complete story, read the Aug. 15 issue of Bicycle Retailer and Industry News.


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