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By Jason Sumner, VeloNews Associate Editor
Meeting with hundreds of independent bicycle dealers (IBDs) for the first time since his company’s successful bid to acquire Schwinn and GT, Pacific Cycles CEO Chris Hornung pitched his Profit Plus Program at the Interbike trade show in Las Vegas on Sunday.
Hornung focused on the decreased prices that his company will charge dealers for bikes saying, “You pay too much for your bicycles. You can pay less.” But added that dealers will have to “forecast more efficiently than in the past.”
Hornung also confirmed that Pacific will utilize “dual-channel” distribution, meaning Schwinn and GT will both eventually become available in big-box stores like Wal-Mart and Target. In the past both brands have been exclusively distributed by IBDs, and some dealers were concerned that the move towards the mass market would erode both brand’s image.
Later in a press conference held the same day, Hornung denied that there was any backroom deal with Trek that might see licensing rights change hands. It had been rumored that Trek might acquire the rights to GT’s BMX line.
As for the Schwinn and GT mountain-bike racing teams, Hornung said he still wasn’t sure if the company would support one or both. However, his response indicated that things would be changing. “If we do continue (supporting a trade team) it will definitely be on a smaller scale,” he said.
Another indication that Pacific’s support of racing will be slim or none came last week when riders and staff of the existing Schwinn and GT squads (approximately 60 people) were informed they would not be receiving their final-quarter paychecks. This is completely within the rules following the purchase of a company that’s declared bankruptcy, but still came as a surprise to some of the riders.
Downhiller Steve Peat was reportedly the hardest hit, with Pacific opting not to pay him nearly $70,000 that would have been owed him if Schwinn/GT had not filed for bankruptcy. Overall World Cup dual champion Leigh Donovan was owed about $25,000.