BOULDER, Colo. (BRAIN) — Trek Bicycle president John Burke has told company leaders that he has decided to “right size” the company by 10% in response to slow sales and high inventory levels. But he says the company's overall strategy remains unchanged.
In an internal memo Burke sent to executives recently, he said details of the cuts would be announced Friday. He said in addition to a 10% cut in spending, Trek would substantially reduce its stock keeping units (SKUs), saying Trek’s model year 2026 SKUs will be 40% lower than model year 2024.
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“These are turbulent times in our business,” Burke began in a confidential Company Update document that Burke sent internally, which BRAIN has obtained.
He went on to say the global bike market is “in chaos,” with high inventory levels at wholesale and retail levels, leading to “significant and continued” discounting. He said retail sales were also below Trek forecasts, including in January and February this year. He said the company had not hit its monthly sales goals for the past 15 months.
He said the situation left him with three options: simply hope for better days ahead, continue to make cuts around the edges, or “right size our business to the realities of the marketplace.” He said he decided to take the third route.
He said Trek would reduce overall spending by 10% with cuts to programs and positions, with decisions made on or before March 8. Trek will also simplify its product lines and reduce inventory levels; He said model year 2026 inventory will be 20% lower, measured in days in stock, than they were before the pandemic bike boom.
However, Burke said Trek’s overall strategy has not changed and the brand’s “flywheel” is “spot on.”
BRAIN has reached out to a Trek representative for a response.
Other cuts
The Trek news comes amid many cuts across the independent bicycle channel and related businesses in the past year, including cuts at HLC, Rad Power, REI, Zwift, QBP, The Pro’s Closet and Signa Sports United (owner of WiggleCRC and other e-commerce brands).
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John Burke in a 2020 Trek photo.
