BANNER ELK, N.C. (BRAIN) — JC Lakey didn’t hesitate when asked his reaction Monday morning to Kona Bicycles’ founders reacquiring the brand from private equity-backed Kent Outdoors.
“I’ve already been spreading the news,” said Lakey, Headquarters Bike and Outdoor shop manager in Banner Elk. “I'm really excited. I was disappointed they imploded. I saw the article this morning in Bicycle Retailer and texted it to (Headquarters owner Sean Pepin) and a couple other people. ‘Dude, check this out!’ That was some good positive news for the day.”
Lakey’s reaction was typical of the Kona retailers BRAIN reached in the past two days following the news that Jake Heilbron and Dan Gerhard, who sold Kona to Kent Outdoors in 2021, would return and pledged to bring the brand back to its roots.
“We're excited about it,” said Craig Friedrich, Asheville Bike Company owner in North Carolina. “With Jake and Dan repurchasing the brand, we think they will do good things with it. They know what not to do with it now. Kona about ran themselves into the ground under the previous leadership. They're giving us the brand back from B2C to B2B.”
Kona took a lot of heat from retailers last June after a website rebuild included consumer-direct sales for the first time. It also overhauled the terms of its Ride Online click-and-collect sales option. Especially troubling was the 15% commission being offered to dealers who participate in the optional click-and-collect program.
Consumer direct sales will now be paused with sales going through bike shops, the Kona’s co-founders said.
“That makes us want to partner with them,” said Russ Chandler, Full Cycle owner in Boulder, Colorado. “If you're going to do omnichannel with your dealers, you can't hog all the margins. … It was clear to us that the soul had been sucked out of them in recent months by their former owner. We were about to drop them, but now we are considering keeping them while we wait to hear more details from the new (old) Kona.”
Personnel changes hurt brand
Also hurting the brand’s image with its retailers was personnel changes, with most of its sales reps being laid off and the closing of its Bellingham, Washington, company store.
“It really put a bad taste in our mouth when the original buyout happened and they basically fired their whole sales staff,” said Mike Colonna, purchasing manager for The Hub and Pisgah Tavern in Pisgah Forest, North Carolina. “It sounds like maybe some of those are going to be brought back into the organization, which would be cool. I would like to see that. Everything that I’ve read in the last couple of hours sounds like good news for the brand and perhaps for us as a dealer.”
Lakey said Kona reps frequently changed. “Their outside reps rotated like every couple of months,” he said. “Some new person would contact me and say, ‘I'm your new rep.’ That's pretty frustrating.”
Retailers like Friedrich weren’t shy in sharing their feelings when Kona announced a holiday buy-one, get-one-free promotion in which bikes were shipped to consumers unassembled.
“I was furious,” he said. “We were planning to drop the brand, but now we're looking forward to resuming with them.”
Lakey said the holiday promotion was discouraging but he never considered abandoning the brand.
Loyalty rewarded
“I wasn't going to vindictively not carry them. We didn't stock a lot of stuff, especially in the winter time, because we're kind of a ski town and not doing anything too much with bikes. We bought a couple of random bikes that (Kona was) discounting and we were getting a discount at wholesale, too. But if I had a bunch of stock and all the sudden they're blowing them out at half off, I'd be pissed.”
Despite the previous Kona turmoil, Sellwood Cycle owner Erik Tonkin, a longtime friend of Heilbron and Gerhard, said the news is good from personal and business standpoints, not to mention for an industry that's experienced more downs than ups recently.
"I just love those guys," said Tonkin, whose shop is located in Portland, Oregon, and was previously a Kona factory cyclocross racer. "They're my business heroes. I look forward to the opportunity to work with them again professionally. They'll always be personal friends of mine."
Michael Knoll, owner of Michael's Cycles in Prior Lake, Minnesota, also said he counts Heilbron and Gerhard as personal friends. "This is the best news because I'm a huge fan of Kona and most of my bikes and my fleet are Konas," Knoll said. "I'm way, way more optimistic about Kona than I was three days ago."
Back from the brink
Michael Roberts, owner of Epic Cycles in Black Mountain, North Carolina, and also critical of the D2C program, but still remained a dealer and recently sold his last Kona.
“If the company can be saved, I think this was the only option for them to do it,” Roberts said. “I think it's still going to be a tough road, getting some of the retailers back, and I think they're still sitting on a bunch of older stock. So I don't know what they're going to do in the next year.”
Roberts noted the Sea Otter Classic incident, when Kona abruptly left the festival last month a day before it opened after setting up its booth.
“I really did think the end was near,” he said. “I had heard rumors that the owners were trying to get the company back, but I wasn't really sure if they were just rumors or if there was any truth to it, but I really figured that was the end of the company.
“I think if anybody can bring it back from the ashes, I think these two guys can.”
