Kona Bicycles was bought back by its founders, a month after massive job losses as its former parent company exited the struggling bicycle industry

Kona Bicycles bought back by founders, month after mass job cuts as former parent company abandoned struggling bike industry

Kona Bicycles, which was still winding down last month after a chaotic 24 hours that saw many job cuts and the brand’s stall quickly and ominously demolished at the Sea Otter Classic Event, has been bought back by its founders, who say the company is turning around “back to his roots”.

Dan Gerhard and Jake Heilbron, who co-founded the Vancouver-based off-road bicycle manufacturer with Jimbo Holmstrom in 1988, announced this week that they have bought back the company from Kent Outdoors, a Canadian sporting goods conglomerate that bought Kona in 2022. but which confirmed last month that it was looking for a buyer for the brand after announcing its desire to distance itself from a bicycle industry that continues to face “very significant challenges”.

In April, reports emerged of a wind-down process and mass layoffs after Kona employees were seen tearing down the brand’s stall at the Sea Otter Classic less than 24 hours after its creation, followed by a town hall meeting calling for confirmed the jobs are disappearing.

Kona Ouroboros gravel bike 1

> Kona Bicycles’ parent company appoints a new CFO amid fears of “cost-cutting measures” after the brand withdrew from the major cycling fair at the last minute

But this week, in a statement announcing their return to Kona, and with it the company’s effective rebirth, Gerhard and Heilbron said they are reuniting with a team of “dedicated, experienced” Kona employees to take the company “back to the basics”.

According to the two founders, the resurrected Kona will focus on renewing its relationship with dealers and retailers in North America and Europe, pausing direct-to-consumer service on its website and unveiling a new range of bikes at competitive Prices.

The statement reads:

Kona Bicycles has been in the news lately. We’d love to say it’s because the new Ouroboros is blowing everyone’s minds (because it really is that good), but honestly, it’s been a bumpy few years. So it’s time for a positive headline: Kona returns to its roots.

With this return to rider ownership and management, we are doubling down on our unique brand legacy and going back to basics.

Renewing relationships with our nearly 1,000 North American and European dealer network is our top priority. Most of us started out in bike shops, and in our eyes, IBDs are our strongest advocates and allies. Healthy retailers are key to ensuring Kona fans everywhere experience the ride of their lives.

To best respect our dealer relationships, we are pausing D2C for all bicycles. Konaworld.com will have changes reflecting this, and our social and communications channels will also be reworked as we get things going. Please be patient and we will keep you informed as we go through this transition.

On the bike side, new Kona inventory is heading to our warehouse and distributors, and in addition to the freshly released Ouroboros, we have some incredible bikes in the pipeline that we’re excited to reveal. We are beyond grateful for the support our suppliers have shown us in this regard. Vendors like Fairly Bikes, who have been with us since our first bike in 1988, are a testament to the value of long-term relationships where people take care of people.

More good news: we are now positioned to price our bikes much more competitively. Private ownership allows us to be leaner, more flexible and quicker on our feet. This, combined with the support of our suppliers, means we can deliver high quality bikes in a distinct Kona flavor at super attractive prices. We will never do a BOGO sale again, so don’t ask, but we promise to always offer good value.

We are back. We’re still here. Let’s ride… Welcome back to the smallest largest bike company in the world.

As noted above, Gerhard and Heilbron’s decision to repurchase Kona after two years comes after Kent Outdoors, following a “strategic review” of its operations, opted to give up a bicycle industry that they believe will survive another two years take to fully recover from the crisis. challenges that have wreaked havoc on her in the post-Covid period.

> Kona bikes are being phased out and put up for sale as the parent company exits the struggling bike market

“In connection with the capital investment and the appointment of the management team, the company has conducted a strategic review of its operating units and determined that it would continue to seek a buyer for its cycling business, Kona,” the Kent Outdoors press release said.

“This move allows the company to focus its resources on investing in its core water sports activities. The cycling industry has faced very significant challenges in the post-Covid world and Kona has not been immune to these headwinds.”

Kona Ouroboros

> “You need to delve into the next three to five years”: what lies ahead for a struggling bicycle industry in 2024?

An anonymous source within the company also said last month that Kent believes the global bicycle industry is unlikely to fully recover from the current struggles in the next 18 months to two years, and that they are not prepared to wait that long. Kent therefore decided to move away from the cycling sector and focus on existing water sports brands, where recovery is already underway.

Scott Taylor, the owner of Lancashire-based distributor Mount Green Cycles – which continued to import and distribute Kona bikes into the UK market despite the phase-out reports – instead blamed the manufacturer’s problems on the company’s policies and decisions Kent Outdoors. and not Kona’s bicycle sales or the bicycle market in general.

Taylor claimed that because Kent Outdoors has slowed their supply chains over the past year as they consider the brand’s future, there is – rather than the overstocking that has dominated the bike industry during this turbulent post-pandemic period – a shortage of some Kona models , with some dealers placing backorders for certain models.

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