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Cannondale Retailers Discuss Dorel's Move

Published April 8, 2009

TARENTUM, PA (BRAIN)—It’s hard to find a more loyal Cannondale dealer than Pennsylvania native George Gatto.

Gatto Cycle Shop has been carrying Cannondale since the brand was in the motorcycle business.

Many things have changed for both retailer and manufacturer since that time. For Gatto, most of his business these days comes from motorcycle sales. His five bicycle shops have dwindled to one in the last four years, largely because of the headache of dealing with vendor demands, he said. Gatto said he’s happy with his two current brands—Cannondale and Giant.

Dorel Industries' recent decision to outsource Cannondale's manufacturing to Asia doesn’t surprise Gatto in the least. “Will I miss it? Sure,” Gatto said of bikes being produced in Bedford, Pennsylvania. “That ‘Made in PA’ was a great selling tool.”

Yet at the same time, Gatto believes that the “Made in USA” tag only went so far for consumers. “I think people are not willing to pay X number of dollars more [for American made].”

Gatto added that he’s not going to drop the Cannondale line just because of the brand’s latest decision to trim costs.

Drew Johnson, owner of World Famous City Cycle in Jacksonville, Florida, hasn’t made a decision on whether or not he’s going to keep Cannondale as a vendor. Before opening his shop three years ago, Johnson was a Florida sales rep for Cannondale.

“They’re taking away my advantage in the marketplace,” said Johnson, referring to Cannondale’s “Made in the USA” heritage.

Johnson’s shop has 200 bikes on the floor, 150 of which are Cannondale, with 100 being American-made Cannondales. His biggest seller for Cannondale is the CAAD9 aluminum road bike with a Shimano 105 gruppo, which retails at his shop for $1,399. Johnson said that’s an easy sell when stacked up against the competition—not only because it’s American-made, but lighter at that pricepoint.

Without that “great advantage,” Johnson will do his homework as to whether he will replace the brand or not. “I think it’s going to have a bigger effect on [Cannondale] sales than you think,” Johnson added.

When Revo Cycles owner Darrin Duhamel cut ties with Specialized late last year, he decided to bring back Cannondale as one of his main brands. His other main brand is Felt.

Duhamel said he's not too worried about Cannondale's manufacturing going to Asia, especially if it will mean "year round availability on the bulk of their products" and it makes them a "top-tier brand."

But he wants to see how Cannondale's latest move shakes out. One thing he will not accept is a "blended brand," where he's forced to carry Dorel's other brands like GT, Schwinn and Mongoose.

"I will not write another purchase order [if that happens], said Duhamel, whose shop is located in Dana Point, California.

In the meantime, he'll stick with the brand that he's known and loved for many years. "Heck, I ride two Cannondales," he added.

—Jason Norman

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