Backcountry.com acquires Competitive Cyclist
In a bow to the strength of the Little Rock upstart grown from zero by Brendan Quirk, powerhouse online retailer Backcountry.com acquired a rival in the cycling space, Competitive Cyclist, the terms of which were undisclosed.
Backcountry moved aggressively into cycling with a bevy of sites, including deal-of-the-day sites like Bonktown.com. It also operates Realcyclist.com, an operation much more like Competitive Cyclist, that is to say, a carrier of ready inventory at sustainable retail prices. According to those with whom we spoke, RealCyclist was never quite able to gain enough traction, quickly enough, to be a dominent player in the fast-growing world of online cycling.
That established, the two sites are not identical. Realcyclist's bailiwick is production-built complete bikes, whereas Competitive Cyclist's expertise lies in providing a soup-to-nuts, built-to-order bike for the apex customer. So, while the confluence of RealCyclist and Competitive Cyclist might seem a joining of like brands, they are in some ways complementary. Backcountry's desire for top-of-the-pyramid customers made a Competitive Cyclist acquisition that much more attractive.
Eat or be eaten
Europe is a hotbed for online cycling sales, with three sites in particular demonstrating muscular revenues. Chainreactioncycles.com and Wiggle are in the UK. Catalog juggernaut Rose is a fixture in Germany, and has moved over to the English speaking market with a site and a presence in the UK: Rosebikes.
These three companies have enjoyed monstrous growth over the past decade, and many of their sales are made to customers living and taking possession of products in the U.S.
Accordingly, Backcountry's acquisition not only adds—according to some estimates—$30 million in annual sales, pushing Backcountry's annual revenue to something around $325 million, it gives Backcountry's bike division the heft, and the customer base, to compete in a very fast growing segment of the online retail industry.
Better late than never?
It might seem like cycling retail is already conducted online. Not so. Not by a longshot, compared to the rest of industry.
But this is changing. Certainly smaller brands are already sold online, but the bigger headbadges have resisted the push to sell over the internet. Trek, Cannondale and Specialized were always the brands to watch. As long as these brands did not allow online sales, this was the dam that kept the industry from moving into pell mell online availability.
But there are cracks in that dam. Storefront and online retailer Nytro.com has just struck a deal to be a mail order seller of Cannondale bikes. Word has trickled out from the industry-only Trek World event that Trek is going to be offering its bikes and accessories for sale online. Bikes bought online will still have to be picked up at Trek's authorized retail stores. Parts, however—as I understand it—will not. They can be shipped directly to customers' locales.
Handwriting on the wall
It may well be that Backcountry.com recognized that several hundreds of millions of dollars in heretofore sequestered bike and accessory sales are poised to move from storefront to online. If so, it just bought a significant chunk of customers, expertise, and trained staff in this acquisition to prepare it for this soon-to-be-recognized largesse in online bike sales.
Competitive Cyclist will move from Little Rock, Arkansas to Backcountry's home in Park City, Utah. The majority of Competitive Cyclist's employees have been offered positions at what will be the new Park City digs, according to a key employee. Most all of the senior management of Competitive Cyclist will be moving, and co-founder and CEO Brendan Quirk will become General Manager of Backcountry.com's bicycle division. The parent company intends to operate all its existing cycling-specific sites, including those mentioned above along with HuckNroll.com and Chainlove.com.
This is the case, "for now," according to a letter sent by Backcountry.com's CEO Jill Layfield to bike vendors who sell to Backcountry. Still, Backcountry has not been shy about shutting sites down that underperform or that represent a multiplicity, and diffusion, of brands that do the same thing. One example is the now defunct Tramdock.com, which was folded into SteepandCheap.com. Only time will tell whether a distinction in, or consolidation of, brands like RealCyclist and Competitive Cyclist serves Backcountry's best interests.
