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Blue is back, with plans to expand product line

Published January 28, 2014
A shipment of 2014-model Blue bikes has hit the U.S.

WILMINGTON, Del. (BRAIN) — Blue Competition Cycles is back in business and looking to expand its product line in the coming years, its CEO told BRAIN.

After nearly two seasons off the market, Blue recently received its first shipment of bikes from Taiwan since the brand emerged from an unsuccessful merger with the now-bankrupt Divine Cycling Group. Blue is now owned by a Delaware-based investment group whose principals are the owners of Taiwan’s Asahi bike factory. 

CEO Steven Harad said Blue is rebuilding, patiently and carefully.

“I’m not talking about the past anymore,” Harad said with a chuckle. The industry veteran joined Blue in 2012, first as a consultant to its founders and then as CEO when the investment group Lake Rudd Partners bought the brand. Harad took steps to rebuild the brand in 2013, but then was left in limbo for about half a year when the Divine merger fell apart.

“All I can tell you is I’m thrilled to be back. I love the industry, I love Blue, and I’m really excited to be running the company,” he told BRAIN.

As of last week, Blue officially had no dealers, Harad said. But Blue had about 50 stores when it shut down, and Harad is in touch with many of them about re-stocking the brand. The company is offering generous terms — including a three-bike minimum. 

“We are coming in so late, everybody has already got bikes in, so we are offering a really low buy-in,” he said. “We sort of have to buy our way back into the dealers right now. I’ll have a better feeling (for the size of Blue’s dealer base) in six months. Right now it’s a blank slate as far as I’m concerned.”

'Just Blue'

Harad is working to finish up Blue’s 2015 model year specs over the coming weeks prior to the Taipei trade show in March. He said he plans to expand the brand beyond its current strengths in triathlon, road and cyclocross.

“We are looking at mountain bikes and the commuter market. We will branch out.”

The company has even changed its name to reflect its broader mission: “We are no longer Blue Competition Cycles. We are just Blue Cycles,” he said. 

Harad also is looking to expand Aerus Components and Aerus Bags, two brands that are tied to Blue. He said there is demand for the components, especially in Europe. Harad has experience building a component line, which he did with Oval Concepts when he worked for Oval owner Advanced Sports International.

Blue Cycles has two employees now: Harad and longtime Blue employee Daniel Stallings, who is returning as sales manager. But Harad said the connection to Asahi gives the brand deep resources. 

“A lot of people looked at (buying) Blue” when it was dormant after the DCGI collapse, he said. Most prospective buyers lacked the resources to rebuild the brand, he said.

“Being factory-owned is the only way to survive anymore. The factory backing is huge.”

'Brick-and-click'

He said one advantage of being mostly unemployed for the last half year is that he’s had plenty of time to visit retailers and think about the current state of bike retailing in the U.S. He took that research to heart as he developed a plan for the new Blue.

For example, he said the brand will have a strong MAP policy, and will look for stores that sell the experience of cycling to all comers. 

“I’ve been to a lot of stores over the last five or six months, and you can see the stores that are selling the experience and the ones who don’t. (Consumers) are going online because there’s no experience in some of the stores they go in to.”

Blue retailers who have brick-and-mortar stores will be allowed to sell the bikes online as well, at full retail.

“We are ‘brick-and-click.’ We can’t survive on brick-and-mortar alone, but we can thrive on brick-and-click,” he said.

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