Wilton’s Cannondale sold to European ‘mobility’ giant
WILTON — Cannondale Bicycles, one of the industry’s enduring brands based in Connecticut, is getting a new owner in The Netherlands that has an existing lineup of performance bikes, including Cervelo, Focus and Santa Cruz.
Canadian company Dorel Industries is selling Wiltonbased Cannondale and its other bicycle brands to Pon Holdings for $810 million. Dorel plans to use the net proceeds to pare debt and focus on home furnishings and child product lines that include car seats and strollers.
Dorel made the decision to sell despite what it described this summer as “unprecedented demand” for bikes, as families seek outdoor diversions during the COVID-19 pandemic. Across Dorel Sports bicycle lines, sales totaled $588 million in the first half of this year, a 24 percent surge compared to the same period in 2020.
“Demand for bikes showed no signs of slowing, and Cannondale’s models remain extremely popular,” Dorel Industries CEO Martin Schwartz said in August. “2022 is going to be another year of trying to get as much supply as we can.”
Pon Holdings bills itself as a “mobility” company, with businesses ranging from vessel propulsion systems to Porsche imports in The Netherlands.
Cannondale marks its 50th year in business this year, with Joe Montgomery
founding the company in 1971 initially to make bicycle trailers and other accessories. Within a dozen years, the company switched the focus to making performance bikes.
A failed side venture into off-road motorcycles sent Cannondale into bankruptcy in 2003. A private equity firm bought the company for $58 million, then flipped it in 2008 to Dorel for nearly four times that amount.
Cannondale bikes are sold anywhere from $1,000 to $12,500, including new electric “gravel” bikes that sell for $3,500 and $5,000.
At the Outdoor Sports Center located a short distance from Cannondale’s headquarters, sales boomed from the outset when the store reopened in May 2020, according to Jeff Koehler, a sales manager at the store.
“There was a mad rush. I think we did 300 bikes in 10 days,” Koehler said. “We knew we wouldn’t get bikes in the immediate term. That season essentially we knew we were basically out once we were sold out of those.”
Stocking inventory remains an ongoing issue, Koehler added, as container
ships loiter off ports while they wait for berths to offload their cargoes.
Only last March, Dorel opened a fulfillment center outside Savannah, Ga., that totals nearly 800,000 square feet of space, and the company is weighing shifting more bike assembly to the United States.
Speaking in August, Dorel’s chief financial officer said inventory remains an ongoing problem, calling attention in particular to demand for Cannondale models.
“Even if, suddenly, there was 50 percent more container ships available, we would still have supply constraints because the factories are either closed or can’t keep up with demand,” said Dorel CFO Jeffrey Schwartz said. “By the time they make it to our warehouse, for the most part, we turn around and then send them off to the customers . ... We finished Q2 with 31 bikes available, so that’s pretty crazy for a business like us.”