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Mixed emotions at retail over Electra acquisition

Published January 7, 2014
Non-Trek dealers fear being frozen out of the cruiser brand, while some Waterloo faithful see upside.

ROCKY RIVER, OH (BRAIN) — When Scott Cowan learned about Electra’s ownership change Monday, he was both stunned and concerned. The owner of three family-oriented shops in Ohio also sells Raleigh and Giant, but Electra is one of his main brands.

Cowan has carried Electra almost since its founding, and Century Cycles moves a couple hundred Townie models — featuring Electra’s patented Flat Foot technology — every year, he said. But now under Trek, he’s worried those sales may go away.

“It’s a great thing for Trek, a real coup,” Cowan said. “But my initial response is that they will cut us off if we’re not a Trek dealer. Skip (Hess, Electra president) claims that Electra dealers will still be Electra dealers. I might believe that for a year. But if you look at past history, it doesn’t take you long to see that (Trek) will assimilate the brand,” he said, referring to the acquisitions of Klein, Gary Fisher and Bontrager. “The big keep getting bigger — that’s scary,” he added.

With a large Trek dealer in his back yard, Cowan doesn’t see how he can pick up the brand — even if he chose to do so — because of Trek’s territory restrictions.

Electra’s Townies are also big movers at Summit City Bicycles & Fitness in Fort Wayne, Indiana. Manager David Coar said the store, which also carries Specialized and Trek, rolls more Electra bikes than Treks out of its doors.

“To me Electra is a lifestyle, culture-driven brand, and it remains to be seen how this big brand is going to let them focus on what they need to be doing. How’s Trek not going to erode that with its corporate image?” Coar wondered.

Coar said his Electra outside rep helped grow sales in the Midwest region. His firing on Monday — when Electra’s outside rep force was let go — was both surprising and disappointing. “This guy goes out of his way. He was the best rep out of all the reps we have. It’s sad that people who poured so much into it get let go,” he said.

Many Trek retailers who stock Electra see nothing but an upside to the transaction. They said it would simplify and improve how they do business with Electra, with shorter shipping times, lower freight costs and better inventory control.

“We now will have bikes warehoused in New Jersey as opposed to Chicago,” said James Erbe, purchasing manager at Brielle Cyclery, a three-store New Jersey retailer that carries both Trek and Electra, as well as Cannondale, and operates a Trek concept store. “Shipping times will go from three to four days to overnight.

“It’s very complementary to what Trek does. We couldn’t be happier,” Erbe added.

Brian Cox, vice president of operations at Jax Bicycle Center, with eight Trek concept stores in Southern California, anticipates that his sales of Electra will increase as Trek gains better control of product supply. Trek and Electra are his two biggest vendors.

“If there has been any downside to our relationship with Electra, it’s that inventory availability has been spotty at times,” Cox said. “We rely on our distribution partners to have inventory when we need it. Trek’s ability to maintain an inventory level should be superior to what Electra was able to do. That will help us out.

“Electra occupies a very unique niche in the marketplace,” Cox added. “It will be interesting to see if Trek can maintain that unique quality. That’s always a challenge when you have multiple brands under one roof.”

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