TRAVERSE CITY, Mich. (BRAIN) — After 44 years in business, Bob and Kris McLain have sold McLain Cycle & Fitness to Specialized Bicycle Components. Specialized has not confirmed the purchase and has declined to comment on this or other recent retail acquisitions. But industry sources tell BRAIN the company has purchased, or is close to purchasing, several other stores and multi-store businesses in several states.
McLain helped establish Traverse City as a mountain biking destination in the 1990s. The store supported local trail building efforts and Bob McLain was race director for the major NORBA and UCI cross country races held there in decades past. McLain and the store have also supported the ongoing Iceman Cometh Challenge race, one of the largest mountain bike events in the country.
Bob McLain told BRAIN he reached out to Specialized eight or 10 weeks ago to see if they were interested in buying the business.
"I had seen some articles in BRAIN (about Specialized acquiring or helping retailers sell their stores) and talked to some other dealers, so I thought it was worth a phone call," McLain said. "I started talking to them to see if they might be interested and of course they know the store because we've been Specialized dealers all along. Next thing we know, we had an agreement."
McLain, 63, said he hadn't made a long-range plan to exit his business.
"I never really had put anything together. I could work another five or 10 years ... at the same time, it was time. The industry is changing and there's a shortage of product. Sales have been good but they could be a lot better if we had more product. And I don't see that changing for a couple of years," he said.
Specialized has been McLain's primary line for years, although the store carries a few other brands, such as Borealis fat bikes. "Specialized has been really good to us over the years. We had the first (Specialized) concept store in Michigan, and then a few years later they helped us remodel the store again. We've obviously been a pretty good dealer for them, so it was kind of a natural move."
McLain said Specialized has hired all his employees. He said he didn't know if the company will change the name of the stores. McLain has two locations in Traverse City and one in Cadillac.
Specialized has recently gone on the offensive after losing retail distribution in some key markets, often to Trek. When Trek bought Bicycle Sports Shop in Austin, Texas, a major Specialized dealer, Specialized opened a company-owned consultation and delivery business there and is expected to open a showroom or full store in Austin by year's end.
In the San Francisco Bay Area, Specialized stopped selling bikes to Mike's Bikes after that 12-store chain was sold to Pon Bike Holdings, the owner of Cervélo, Santa Cruz, and other bike brands. Mike's had been primarily a Specialized dealer for years, and was Specialized's largest dealer in the important Bay Area market.
Mike's CEO Ken Martin told BRAIN it was Specialized founder Mike Sinyard's decision to stop selling bikes to Mike's after the sale. Martin said Pon was not opposed to the stores selling Specialized bikes.
Specialized has said it will open a delivery operation in the Bay Area to service online customers there. According to Mike's, Specialized canceled about 400 pre-paid customer bike orders through Mike's and has said the Mike's will not provide warranty service on Specialized bikes after Oct. 1.
Martin told BRAIN that the stores have added Giant bikes as their main line; Giant officially announced it Thursday. Martin told BRAIN the stores may add several other lines as well.
While Trek has bought dozens of stores in recent years, Specialized has not been as aggressive. The company will not confirm how many stores it owns, but it has long operated stores in Costa Mesa and Santa Monica, California, as well as Specialized Experience Centers in Boulder, Colorado, and Santa Cruz, California. The Experience Centers offer demos and rentals and perform bike fits but do little or no retail sales.
In recent months Specialized has been advertising to fill retail positions in Austin, as well as in Connecticut (at Biker's Edge), Arizona (at Oro Valley Bicycle), Santa Monica; Chicago; Birmingham/Rochester, Michigan; and Long Island City, New York.
BRAIN will report on other business sales as we can confirm them.
