By VeloNews Interactive
Following the bankruptcy of its European division, the owners of the Schwinn/GT Corporation announced plans to sell the company, retaining Credit Suisse First Boston as an advisor in discussions with several potential buyers of both the cycling and fitness businesses.
Last month, Schwinn/GT’s European division ceased operation and went into receivership, leaving several retailers and suppliers uncertain as to the entire company’s future. In particular, the European difficulties put into doubt the firm’s relationship with bike suppliers in Taiwan.
Schwinn has faced financial difficulties since its 1998 acquisition of GT, a company nearly bankrupt at the time of its sale. Despite recent financial difficulties, Schwinn/GT CEO Jeff Sinclair said that the company and its divisions represent a good opportunity for possible buyers.
“Schwinn, GT and several other brands under the Schwinn/GT umbrella comprise one of the most powerful groups of brand names in the cycling industry and strong positions in several global markets,” Sinclair said in a release issued Thursday. “Schwinn is a famous brand with a history that spans three centuries, while GT is widely recognized for its innovation and technical expertise in the mountain bike and BMX categories.” According to the release, several potential buyers have already been in contact with the company, expressing “a specific interest in the strong position that Schwinn/GT has in the IBD (Independent Bike Dealer) channel. The fitness brands, including Schwinn and Trimline, have established solid positions in the industry and continue to grow at a healthy pace,” Sinclair said.
Sinclair said the parent company is considering offers either for all of Schwinn/GT business or for the bicycle and fitness businesses separately.
Wallace Rueckel, principal of Questor, the principal shareholder of Schwinn/GT, said, “The integration of the cycling operations of Schwinn and GT are now essentially complete, while the fitness business has grown threefold since we acquired the company. Now is an ideal time to explore strategic options.”
Those strategic options include the possible sale of the bike division to Huffy and the possible sale of the fitness division to Nautilus. With a nearly century-old name behind it, it’s almost a certainty that the Schwinn brand will continue in one form or another. The original Chicago-based company went bankrupt in 1992 and an investment group, headed by Scott Sports, purchased the brand for $50 million in 1993. The company was then sold to the Questor group in 1997, which then acquired the nearly bankrupt GT in 1998.
The company recently announced a small round of layoffs at its Boulder, Colorado, headquarters, but no further announcements regarding staff or facilities have been made.