Rossignol Buys Felt

Rossignol Buys Felt

French ski manufacturer is buying Felt Bicycles. It’s a dramatic turn for the scrappy brand based in Irvine, California. This is not Rossignol’s first foray into the bike market. In an effort to diversify their holdings they bought Time in 2015, and while they sell Look ski bindings, they have nothing to do with the Look bike product line.

Rossignol also owns ski brands Lange and Dynastar; Rossignol Group is, in turn, owned a Swedish equity group known as Altor Equity Partners, meaning Felt is now another pawn on the board in a world where companies are assets that are traded like so many baseball cards. 

So why was Felt on the block? From where I sit, the single greatest weakness the brand has shown here in the U.S. has been its dealer network. The rise of the concept store model for Specialized, Trek and Giant has been a blow not just to Felt, but also to brands like Bianchi, Cannondale, GT and Fuji. Remember how Fuji bought Performance last year? That was a genius strategic move meant to combat how they are being squeezed out of dealers. Being in the right dealers is an important piece of getting the public to respect your line. In the greater Los Angeles metropolis, I got to see how this played out first-hand because the shops that really supported bike culture and sponsored teams didn’t sell Felt. As a result, if you saw a Felt bike on a group ride, chances were you were riding next to me.

Felt also suffered from an imbalance in resource allocation. Compared to what they devoted to engineering and product development, they spent next to nothing on marketing and advertising, and as a result, they simply didn’t have the reputation they deserved. Ironically, having such a stellar product line posed a separate issue in that brands like Specialized didn’t want to have to face off against them on the shop floor. Because Felt was such a lean operation and because CEO had been the head product manager at GT under Richard Long (a doctorate degree in how to shave $10 off a bike’s landed cost to bring the consumer better value), Felt’s bike line was a study in value.

Their recent abandonment of the model-year system of product introduction was a terrific way to combat the problem every brand faces in forecasting. Order too few of a bike and you run out in June. Order too many and you end up with a warehouse full of dead product in November. Getting it right seems as much a matter of luck as it does insight.

However, the move to static product that is updated once a new design supplants the old one seems to have come too late to save them. It’s a frustrating turn for one of the more exciting brands in the bike market. For the bike-buying public, it’s easy to underestimate Felt’s size and reach, and hence the value of this purchase for Rossignol.

In the U.S., Felt is known as a road and triathlon brand. The DA set the standard for aero road bikes more than 10 years ago. More recently, the tri-only IA raised the bar and was the first triathlon-specific frame introduced, starting a fresh arms war among aero bike manufacturers. But in Europe, Felt is largely known as a low-end maker of kids bikes, trekking bikes and other categories like mountain and ebikes. They aren’t known as a high-end road brand. Market perception aside, the brand has clout thanks to distributor Sport Import, whose owner, Michael Müllmann, was Felt’s majority owner. Müllmann had been GT’s distributor during its rise in the ’80s and ’90s, and when GT informed him they would be setting up their own distribution, but gave him three years notice, he dumped them and joined forces with Duehring (with whom he’d had history due to GT) to revive the shuttered Felt brand. 

What Rossignol has purchased is Ford Pinto with a Hemi inside. Or in our terms, Peter Sagan riding for a continental team too weak to provide a leadout. The brand produces some of the best road bikes on the market from the standpoint of both technology and value. They make amazing mountain bikes and even have a patented suspension system in Equilink. They are a category killer in triathlon. They produce a broad and popular line of cruisers. Their BMX/freestyle line is huge in Europe, if not as well known stateside, and more recently they expanded their line of city bikes to include a range of ebikes. There’s not a bike segment out there that Felt doesn’t have expertise producing.

So what will Rossignol do? That of course, is the question. It’s unlikely they will lay off anyone Duehring hasn’t already laid off. Felt has always been an operation drum-head tight. To work at Felt is to have a hat collection. Would they dial back product development? It seems possible, but the cost would be high. The guys working there would get snatched up by Specialized or another bike brand lickety-split. Loyalty goes only so far if you have nothing to do.

Rossignol CEO Bruno Cercley has given some indication of the new direction. First, he has said he wants to double Felt’s annual revenue from $30M to $60M in the next five years, which is an unsurprising goal for a company just purchased by an equity group. Would the distribution model change? One must hope so. They need to do something to get into more dealers that really foster culture so that word better spreads about how good the bikes are. But setting the Rossignol sales force loose on their existing ski accounts won’t get the job done. That would alienate some existing accounts and wouldn’t suffice for much of the country.

But Rossignol has resources Felt has badly needed. With some investment they could sponsor a ProTeam riding the Tour de France come 2018, granting the brand woefully lacking exposure. Given Rossignol’s distribution might one wonders if Sport Import might be kicked to the curb at this juncture.

There’s one other notable clue to the future of Felt and its employees. Rossignol plans to develop a line of Rossignol-branded mountain bikes, and they’ll need to add to Felt’s team to free up the talent to produce a second line of bikes. Rossignol has, like many forward-looking brands, recognized what the future holds: a warmer climate that has already hurt the ski industry and will continue to do so. We’re going to see ski areas closing due to lack of snow, or not enough snow and for Rossignol to survive long-term, they’ll need to invest in warm weather recreation, which is why purchasing Felt is a strategic move to ensure their future.

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18 comments

  1. Adam

    I’ve been reading your reviews for a decade now and one consistent message is that Felt makes great bikes. This has always put them at the top of my list, but I run into trouble sourcing one. I hope this helps.

    Also can’t help but notice that Felt have been twice stung by Pro sponsorship. They were right there when Slipstream were an upstart with big aspirations only to lose out in the Cervelo merger. Then again, they took another leap of faith in what felt like a partnership with a young Argos squad that paid off with three Tour stage wins, only to lose out again to Giant. Had either of those relationships lasted another two years I feel their fate would be different, but that they simply couldn’t swing it financially.

    With many ski resorts now doing as much business in the summer as the winter, I wonder if the new model is have these stocked in every resort town from April to October.


    1. Author
      Padraig

      Sources I have told me that they were ready to walk from Slipstream because Vaughters wanted so much money. I don’t know exactly who ultimately concluded not to renew, but it wasn’t as cut and dried as Slipstream deciding to go with a better offer from Cervelo. There were multiple pieces in play and it simply became better for Slipstream to go with Cervelo; that wasn’t an easy marriage. Lots of riders lost sponsorship, so it wasn’t an obvious deal at the outset. With Argos, Felt, I’m told, elected not to renew due to the amount of money the team wanted. I think that you’re right that the investment with Argos would have been wise for them, but it’s easier to make that call in 2017.

      I think that as ski resorts continue their transition to becoming mountain resorts the logic of a Rossignol mountain bike line will become self-apparent. Why give that business up to Scott? Rossi is a bigger name in skis than Scott is, and as resorts try to sell skiers on summer vacations, I suspect they’ll want to capitalize on that familiarity. Nevermind the fact that Scott’s MTB line kills.

  2. Karl

    I think that Rossignol has a great opportunity to market Felt as a top notch cyclocross brand with Wout Van Aert in the rainbow bands and on a Felt for the next year.

    Felt makes some great bikes. I currently have a F1PR, and used to have an F1SL.

  3. Noel

    I’m lucky enough to have a good Felt dealer near by, and my road bike at the moment is Felt AR that I absolutely love. I’d would be very happy to see the brand get the recognition and market penetration I feel they deserve. I sing their praises every chance I get.

  4. Ken

    “To work at Felt is to have a hat collection.”

    This is a great line. I’m going to steal it for when I have to describe my company 😉

  5. Brian

    My Felt VR3 should be be arriving next week, I live in Scandinavia and sourcing a Felt here is not easy, found a shop in Germany and a chain in the UK. It was a 3 horse race but in the end the Felt had some options I really wanted along with the right geometry, it didn’t hurt it was cheaper than a equivalent Canyon Endurace CF SL. Another thing will be that it’ll properly be as rare as a custom made bicycle here.

    1. Rick

      I have to agree with you Bagni. This sort of behind the curtain industry news is a “yawn”. The bottom line is that when these companies change ownership, hard working folks that have committed years of their working lives, are the ones that have their families uprooted or lose their jobs. One thing that you can count on for Felt and that’ that change is coming.

    2. TomInAlbany

      I actually like these posts. It is a reminder that, though a passion, it is still an industry and, as such, is still driven by market forces.

      Then again, I ride a Serotta….

  6. Dizzy

    While teaching at a seminar, an attendee and I began a cycling conversation. He referred me to a LBS that did meticulous bike fits. After the fit, I was introduced to a Felt F5C that was a perfect fit for my small frame. However the price was too high. The shop owner asked, “How much can you afford?” When I told him the number, he said, “Take it. It’s three years old and such a small frame, I’ll never get rid of it.” Cha-ching! So my first road bike was a 2005, full carbon Felt F5C w/a full 105 Group; a rocket.
    After a few years, my back couldn’t take the low geometry and I had to move on to another bike. But that beauty still hangs in my garage and my mind can feel the ride beneath me when I look at it!

    Best of luck to all the craftsmen at Felt! Dizzy

  7. Chuck

    I ride a Felt FC (now on its third season). Like you, more times than not I’ll be the only guy riding a Felt. There’s a part of me that loves riding a bike that isn’t as common as what everyone else is riding, but knowing that’s it’s as good a bike (if not better). And I’ve always felt (no pun intended) that Felt punched well above its weight in terms of quality of their product. So riding a Felt is sort of like being in a select fraternity. But I also know that that means Felt doesn’t have the same dealer network as the “big boys” and isn’t selling as many bikes. Obviously, from a staying in business standpoint that’s not a good/positive thing. I hope the purchase by Rossignol is a good thing. Would love to see Felt back at the UCI World Tour level.

    1. TomInAlbany

      I’m concerned with buying a Felt and not being able to get good service. Any issues from your point of view? (I to the most basic maintenance and leave the hard/interesting stuff to the shops.)

    2. Chuck

      Tom – For all intents and purposes, I’m a bike mechanic do my own work on my bike(s). I built my Felt FC from a bare frame. As far as any bike maintenance goes, a Felt is pretty much like any other bike and there’s no reason a competent shop couldn’t service it … even if they’re not a Felt dealer or you didn’t buy it from them. If they’re not a Felt dealer, they probably wouldn’t stock Felt-specific parts, e.g., a rear derailleur hanger, seat post clamp, but they ought to be able to source the parts. Where it could possibly get tricky is if you had a warranty or other issue with the frame itself. A bike shop that isn’t a Felt dealer might not want to be an intermediary and you might have to deal with Felt directly. Hope that helps/answers your question. Cheers, Chuck

    3. Chuck

      Tom – And I wouldn’t worry about Felt as an actual frame/bike. Marcel Kittel won 3 TdF stages in 2013 on a Felt that you or I could buy. Their stuff is great. As technically advanced as any other manufacturer. For example, I don’t know any other “mass” manufacturer building frames using TeXtreme carbon fiber. The AR is a cutting edge aero road bike. And the FR is a great all-around road bike. Plus IMHO Felt bikes are well spec’ed (if you’re buying a complete bike) and very competitively priced. Cheers, Chuck


    4. Author
      Padraig

      No need to be concerned Tom. Your local shop will still be your go-to. The folks at Rossignol are smart enough to know that if they botch the transition and customer service suffers they are devaluing their purchase. I expect they will take terrific care during the transition. There could be some lapses in institutional memory if not all the warehouse/service/warranty staff are kept, but it’s important to bear in mind that it’s rare that an issue with a bike rises to the point of needing a warranty return. Even if it does, that’s an issue that will be addressed by your local Felt dealer, so your interface and experience won’t change a bit. You’ll simply visit your shop and let them deal with it.

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