The Best Stories of 2009

Our man of the year, Lance, caught in the shadow of his nemesis.

It’s been an interesting year in the world of cycling. There have been some duels for the ages between larger-than-life figures. I decided to ask each of RKP’s contributors to pick their three favorite stories of the year. Some of their answers may surprise you.—Padraig

Padraig—

Lance Armstrong. No other figure in cycling has ever made headlines worldwide the way Lance Armstrong does. Whether it’s his battle to rid the world of cancer, the birth of a new son, doping charges or his battle of wits with Alberto Contador, Armstrong is a headline wherever he goes, whatever he does. He is also significant because no other figure has half the ability to polarize a group of cyclists as Armstrong. To some, he is a virtually convicted doper, to others he is a champion and figure of hope. No matter what you think of him, he has the ability to keep cycling in the mainstream worldwide, which, ultimately, is good for cycling.

The conviction of Dr. Thompson. That Dr. Christopher Thomas Thompson was even tried for one felony—let alone six—was a big success for cyclists everywhere. There were more opportunities for this case to go off the rails than can be counted, but some significant points were in the initial investigation, once the case was turned over to the district attorney and, of course, in Thompson’s cross examination. This case will be cited as a turning point in the recognition by the average person that cyclists are both vulnerable to the actions of malicious drivers and have a right to the road.

Doping. From Christian “cycling has changed” Prudhomme, to Danilo “the killer” DiLuca to the blood transfusion kits found among Astana’s medical supplies, one should draw the conclusion that some riders might be cleaner than in the past, but cycling, as a sport, has yet to shed the taint of doping. Prudhomme, the Tour de France director, made the ludicrous statement, “I recently confirmed that ‘there were no suspected cases’ (during the 2009 Tour de France). This means that the fight against doping progresses.” Astarloza’s positive proved his statement was both premature and dead wrong. If anyone should have been fired from the ASO, it shouldn’t have been Patrice Clerc, but rather Prudhomme for making such a reckless statement on behalf of such a storied institution.

Honorable mentions:

The fire sale of Iron Horse bicycles to Dorel. Iron Horse wasn’t a prestigious brand, but it was long known as being a good value for new cyclists. Its descent into bankruptcy was an ugly, backbiting mess full of recrimination and charges of shady deals involving owner Cliff Weidberg and his son, who owned Randall Scott Cycles, a significant debtor to Iron Horse. Dorel (the parent for Cannondale, GT, Schwinn, Mongoose, Pacific, etc.) purchased Iron Horse for $5.2 million at auction, less than what Iron Horse’s three biggest secured creditors were owed, for a classic pennies-on-the-dollar deal. The sale left hanging dozens of unsecured creditors who were owed a combined $17 million as well as CIT Group for another $4 million, and made cycling’s biggest corporate colossus just a little bit bigger.

Lemond v. Trek. Just wait, the plus-size gal isn’t even on stage.

Da Robot—

Contador and Schleck denying Armstrong an 8th TdF. When the Lance returned, so much of the American cycloratti was hoping he’d return to his throne, but personally, I was ready to move on. As the hype ramped up and up and up, through LA’s collar bone break, through the Giro and into the initial stages of the Tour, I was really wishing for the sport to move on. Not to be ungrateful for contributions made, but I was ready for some new legends to emerge. And they did.

Philippe Gilbert’s end of season wins. What I love about Gilbert is his incredible tactical sense and timing. This is a guy who beats riders head and shoulders stronger than he is, by keeping his wits about him and playing them against one another. Not a weak rider, Gilbert shows what racing might be like in the absence of race radios, when smart riders win as much as strong ones.

The emergence of Edvald Boasson-Hagen. While everyone was talking about Andy Schleck and Alberto Contador (myself included) another young rider was winning races (10) and taking the overall in smaller stage races like the Eneco Tour and the Tour of Britain. Boasson-Hagen is 22. He is exactly the sort of rider that today’s top guns should be wary of, because he’s going to get better.

Rick Vosper—

USA Bike industry ignores its mounting inventory crisis for an entire year (repercussions will impact retail pricing and corporate profits until 2012). If you ever had any doubts as to whether bike companies know what they’re doing, well, here’s your answer.

Lemond v Trek: no matter which way it ends up (short of an out-of-court-plus-gag-order settlement), this story still has the potential to become the biggest scandal in US cycling history. It’s also the #1 story the cycling press wishes would just go away: no matter how—or even if—they report it, it’s a lose-lose for them.

American public starts to figure out that bikes are actually a lot of fun (and practical transportation, too). This is THE biggest sea-change in public attitudes about cycling since That Skinny Blonde Kid won some race over in France 33 years ago … although sometimes I liked it better when we were just a bunch of geeks and outcasts instead of too-cool-for-school fashion mavens in skinny jeans and ironic t-shirts.

Bonus: Mavic’s parent company (Amer Sports) puts it up for sale, can’t find buyer, de-lists it, fires its own President. You know the economy’s bad when no one wants a highly regarded company with the lion’s share of a long-term lucrative market.

Bill McGann—

Contador’s Tour win as part of the Bizarro World of Team Astana. I know of no other time in cycling history when, after the designated team leader takes the Yellow Jersey, the team manager wanted to put on sackcloth and ashes. The psychological war Bruyneel and Armstrong waged against Contador remains about the oddest thing I ever saw in cycling.

The death duel between Di Luca and Menchov in the Giro. While I watched it, I tried to forget Di Luca’s past doping offenses (he made sure I was reminded later…) and watched 2 superb athletes fight until neither had a watt left. Menchov’s crash in the final time trial made even the race’s last moments exciting. His poor performance in the Tour showed he had gone truly deep in the Giro.

Grand Tour VAMs. Both the Giro and the Tour had some spectacularly high VAMs (average rate of vertical ascent in a climb). There was one day in the Tour that saw the Tour climbing speed record Bjarne Riis set on the Hautacam in 1996 eclipsed.

Bonus: And the UCI says they are getting a good handle on doping. I’ve got some good ocean-front land here in Arkansas for anyone who believes that. I believe we lost ground during 2009 in the hunt for a clean sport.

Souleur—

Contador wins second Tour de France. The lead up to the race was more drama than MTV’s “The Hill” leading up to prom night. Every day there were hints that all the indicators being tossed out by Astana that “all is well” and “we are all behind our leader” and “Contador is our GC leader.” It was something everyone who listened and watched knew was slick talk and that there was 2 GC riders on the team, neither submitting to the other in reality. To see the dynamics play out was something that kept us all tuned daily for the month of July. I personally cannot wait ‘til 2010′s TdF!!

Fabian Cancellara SMOKES TT world championship. Fabian is a statesman for cycling and in my opinion one of the peloton’s classiest riders. He can be many things, but his TT skills are phenomenal and his lead up to the World TT championship brought us to anticipate a performance, which he delivered in jaw-dropping fashion.

Devolder repeats at Tour of Flanders. I love all the Classics, but I love the Spring Classics especially. Seeing Cav win Milan San Remo was incredible, to see Boonen win Paris-Roubaix was great, to see Schleck win Leige was sweet as well, but to see the Belgian Devolder repeat his win at Tour of Flanders held a meaning that goes to the very core of this race, to his pedigree, which makes him a national hero yet again, and brings this one to the top for me.

Notables: Team Columbia HTC should have an honorable mention notably as they really pulled off greatness in light of adversity, despite the other teams riding senslessly against them at times (Hincapie’s maillot jaune loss in TdF), they stuck it out and perhaps had the team of the year.

Judge Orders Trek, LeMond to Settlement Conference

Trek and Greg LeMond have been ordered by the judge presiding over their case to hold a settlement conference in a last-ditch effort to avoid going to trial. U.S. magistrate judge Janie Mayeron ordered that the two parties to meet at a St. Paul, Minnesota, courthouse on January 28 for the purpose of perhaps negotiating a settlement.

As a prelude to the meeting, counsels for both parties are to meet on or before January 18 for a “full and frank discussion of settlement.”

However, if Trek and LeMond do not come to a settlement at the settlement conference, each attorney is required to submit a confidential letter to the judge. In it the attorneys must each give a progress report including outstanding issues and analyze their case’s merits and weaknesses.

While the roots of the conflict began with LeMond criticizing Lance Armstrong’s association with Dr. Michele Ferarri, a known proponent of EPO use for cycling, for business purposes, the conflict began when Trek informed LeMond that it would not renew its 13-year licensing agreement with him when it expires in 2010. LeMond filed suit on March 20 claiming that Trek had promoted Armstrong ahead of his brand and asked the court, essentially, to require Trek to continue to make and promote LeMond bicycles. On April 8, Trek sued to sever all ties with LeMond.

Trek cited multiple reasons for severing the relationship including dilution of the LeMond brand name due to mass-merchant line of parts bearing the LeMond name. And while there has been wide-spread belief that the brand never sold well, industry statistics show LeMond was the fifth largest road bike line in the U.S. in 1999.

Whether the case settles out of court seems to be up to LeMond and what his greatest priority is. If protecting his brand and his income is his greatest priority, then the case will get settled behind closed doors; terms of the settlement are likely never to be known. If LeMond’s greater desire is to attempt to expose Lance Armstrong as sporting fraud, then this case is bound for a jury and the fireworks will be considerable.

LeMond’s choice may be pivotal. Should he pursue an open trial, the number of companies will to do business with him will shrink considerably. Certainly any players that consider themselves risk-averse would shy away from any association.

An out-of-court settlement would end the mudslinging and let LeMond get back to his mission of marketing a line of bicycles bearing his name. The business climate has changed significantly for the bike industry since LeMond negotiated his deal with Trek in 1995. The market consolidation taking place then has largely dried up. However, there is one notable exception.

Dorel, the parent company for Pacific Cycle and Cycling Sports Group, is the cockroach that ate Cincinatti of the bike industry. Dorel’s cycling brands include Mongoose, Schwinn, GT, Cannondale, Pacific, Roadmaster, Dyno and Sugoi.

And they are still buying. Recent purchases have included Australian distributor Gemini Bicycles as well as UK distributor Hot Wheels and Circle Bikes. Dorel also acquired the Iron Horse at auction for a measly $5.2 million following the bike brand’s demise amid multiple lawsuits and finger-pointing. Oak trees aren’t a shady as the deals made to try to keep the brand operational.

If LeMond were to go quietly, it wouldn’t take a science fiction author to imagine a deal with Dorel that could place the LeMond name in the mass market, the sporting goods chains or the IBD before the end of 2010.

Why Interbike is in September. In Las Vegas. Pt. II

The immense crowd at ‘Cross Vegas

But Doesn’t Interbike Need Trek and Specialized (and Now Cannondale and Felt) to Survive? The Critical Mass Theory.

A lot of industry observers, including me, have despaired for the future of Interbike without some of the industry’s most powerful players on hand. (To be fair, Specialized has maintained a good-faith presence at the show for a number of years, and used that presence to their advantage this year to showcase their Globe line).

Well, those  observers, including me, were wrong. For the first time in awhile, retailer numbers at Interbike ’09 were up.

So, Short Answer: No.

There’s plenty of retailers and retailer dollars left over, even after the big companies have taken their slice of the pie, something on the order of half the total industry budget for bikes alone and far more than that for equipment; not to mention plenty of suppliers who want those dollars. As long as those numbers maintain a kind of critical financial mass, Interbike will do just fine, thank you very much. In fact, a number of distributors prefer Interbike without the Big Guns there, because it means that much more retailer attention for themselves.

The Longer Answer to this question involves a complex set of dynamics I call Bike 2.0 and discuss in more detail here. This bit may be a little, ah, statistically dense for most folks, so enter at your own risk. Basically, Bike 2.0 as of 2010 is a lot like how the bike industry would have developed over the past 30 years had the Schwinn leviathan not swum onto the sandy shores of the mountain bike era and promptly collapsed, crushed under its own bone-breaking weight like a freshly beached whale.

Meanwhile, Trek and Specialized (and Giant and Felt and Cervélo and Cannondale and other companies who go the dealer show route) have reached their own equilibrium in the one-upmanship earlier-than-thou (also known as the “get-to-the-retailers’-checkbook-first”) game. Presumably they might want to show new product even earlier than late July, but they’re prevented from doing so by three reasons:

• Shimano’s next-year prototypes aren’t available in sufficient quantities yet. And Shimano (not to mention frame factories) can’t have production protos available much sooner than late July because their own production backs up against the Asian Lunar (Chinese) New Year, a two-or-more-week rout celebrated sometime between late January and mid-February, depending. (For 2009, it started Jan 26^th; for next year, not until Valentine’s Day). The holiday leaves not just factories but entire towns deserted, rather like the nations of France and Italy in the first two weeks of August each summer.
• They can barely get retailers to show up in July by offering free airline tickets (for the high rollers, anyway) and free beer. Besides,
• I think there’s some of big bike race scheduled that month anyway. Hard to get those expensive A-List athletes to show up much before August, anyway.

And the punchline to the early dealer presentations is this: retailers aren’t stupid. After just a couple of years being trotted around the block, they know to hold off their orders until they’ve seen everything their Alpha suppliers have to offer. And then they hold off another big chunk until Interbike anyway, just in case something better shows up.

So what’s the big driver for Trek and Specialized (and now other companies besides) to spend literal millions of collective dollars schlepping bikes, retailers, and their own overworked staffs all over the country in a frenzied rush to accomplish nothing concrete, sales-wise? The answer is simple: retailer attention. By putting on their own show, the big guns can get hours and even days of buyers’ undivided attention, present their products in the very best light, and do a little beer-drinking together while they’re at it.

The late July/early August part is mostly because it’s the earliest they can possibly do so.

The Bottom Line.  Barring another Bio-style power grab (which you won’t even find references to on the Interwebs anymore), Interbike is doing just fine where (and when) it is.

Why Las Vegas? The Black Hole Theory.

Nielsen (the company that wons Interbike and a whole bunch of other shows besides) loves Las Vegas because it’s close enough for dealers from SoCal to drive in, and enticing (and cheap) enough to get less-local retailers to fly in. Plus from the show management’s point of view, it’s easy to work with: centralized services, a very effective infrastructure, and—given the fact that Nielsen hosts a half-dozen other shows there each year—god only knows what kind of illicit perks, kickbacks, comps, showgirls, drugs, leather-clad teenage boys, free show tix, in-room massuesses, and deposits into secret bank accounts in the Lesser Dutch Antilles are going on in the back room.

The Short Answer: It’s one of the few places big enough that retailers will actually go to. At least that’s what Interbike thinks. Plus there’s a huge inertial pull—sort of a reality-distorting black hole—surrounding Las Vegas that sucks all other thinking past its Event Horizon.

The Longer Answer. Interest in moving Interbike to someplace,  anyplace, other than Vegas comes up every couple of years. And Interbike does a survey.

Suppliers, for the record, uniformly hate Vegas—the heat, the dust, the unions, the prices, the sheer budget-numbing cost of moving all their people and stuff halfway across the country for five days. Retailers tend to hate it for most of the same reasons, plus it’s a crappy venue for bikes and a crappy excuse for a vacation besides.

But Interbike and the NBDA claim that a huge number of retailers prefer Las Vegas to the other locations big enough to hold the whole extravaganza under one roof (currently Denver and the new facility in Anaheim). So back to Vegas we go, year after year.

Interestingly, I’ve been trying literally for years to find out who these retailers are who demand Las Vegas as their destination of choice, just to see what kind of creature could like both bikes and that curious tumbleweed-infested patch of desert called Sin City. I’m sure they exist, these retailers, but in thirty years in this business I have yet to meet a single one.

The folks I see drinking and gambling far into the night (and sometimes when I get up early to make a 7:00 meeting, into the next morning, too) tend to be low-level employees on both the wholesale and retail sides of the business who treat a once-a-year trip to Vegas as a sort of combination paid vacation and five-day drunk. Store owners and senior distributor types have too much work going on to mess much with stuff like that. For them, Interbike is the toughest work week of the year, and one that comes after thirty or even forty days of show prep (or, in the case of retailers, summer sales frenzy) without a day off.

No wonder half the industry is sick the week after Interbike. It’s not the germs as much as it is sheer exhaustion.

The Bottom Line. Yeah, it sucks, and everyone knows it. But we’re going there again next year, and the next, and every year for the foreseeable future. And some people seem to like it. Besides, what do you think Interbike is about, anyway—selling bikes?

To learn more about Rick and his background, check out his bio here or go to his site here.

Why Interbike is In September. In Las Vegas.

Theories of Dynamic Tension, Critical Mass, And Black Holes.

In the wake of the, ah, mixed reviews that ensued from Interbike Demo East last week, now might be a good time to reconsider the whole Interbike question from an insider’s perspective…and why it makes almost no sense whatever that the biggest trade show of the year is held in the middle of September, without many of its biggest players, in the bike-unfriendliest district of what is already one of the least bike-friendly cities in North America.

Better minds than my own (which, I realize, could be just about anyone’s) have struggled with this problem, only to give up under the Sisyphean challenge of making sense of the whole messy thing. If I have succeeded where others have failed, it’s only because I realized early on the possibility—indeed the very probability— that trying to make sense of any and all questions concerning Interbike’s location in time and space are ultimately doomed, because in fact they make no sense whatever.

Like so many things in the bike business, understanding Interbike is like peeling an onion: by the time you reach the center, you discover there’s nothing there. That and the stink on your hands, of course. So here’s a series of three multilayered questions and answers designed to peel away the layers a diverse as misplaced corporate greed,  the rise (and fall) of the mountain bike, and the ever-changing dates for Chinese New Year (really!). All presented one at a time so you can discover for yourself the Great Nothingness which resides therein.

1. Why September? The Dynamic Tension Theory

The Dynamic Tension theory, for those of us old enough to remember Charles Atlas ads in the back of comic books and/or to’ve had sand kicked in our faces by bullies at the beach, involves equally strong opposing forces counterbalancing each other. Which, we might point out, accomplishing exactly nothing. In the case of bike business trade shows, those opposing forces are suppliers and retailers. But the results are the same.

The short answer is, suppliers want dealers’ orders as early as possible in order to book their own orders for factory time and materials, and then have the retailers take delivery on their product as soon as possible. This accomplishes three important things: it streamlines the manufacturing process (meaning better prices and improved reliability of delivery), locks down as many of the retailers’ open-to-buy dollars as possible, and most importantly, puts the inventory in the retailers’ warehouses instead of their own.

Retailers, understandably, want to see suppliers inventory their own darn product and deliver it to their places of business as needed. That’s—according to retailers, anyway—what suppliers are supposed to do. (Suppliers, needless to say, have their own version of this theory, mentioned above, and which they propagate by means of non-cancellable advance orders and 180-day lines of credit. Both theories have their merits and disadvantages.)

“As needed,” for a big chunk of the country anyway, means March or April. In California it can run as late as May, which is when that quirky state’s joke of a “rainy season” ends. (In Seattle, on the other hand, it rains all the damn time anyway, so people tend not to care what month it is.) And for virtually all retailers, September is still a critical part of the selling season and one of their best months for making money. And as a result, one of the worst for having trade shows. This is one reason Interbike is always held in the middle of the week—so retailers and their staff can get back to work as soon as they blow town in a haze of jet exhaust and beer fumes.

For years, bike industry trade shows were held in January (BDS) or February (the old Toy & Bike Show in midtown Manhattan), or even (in the case of the now-defunct CABDA show), as late as March. Retailers would slog through the snow and ice (or go to sunny Long Beach where the BDS show was held, literally, in a basketball rink that  always smelled funny), order up what they wanted for the coming season, and expect to have it delivered a couple months later.

They didn’t get it, of course, but that’s what they expected.

Now here’s the longer answer. The balance of power in the industry was changing. Prior to, say, 1980, you had Schwinn Bicycle Company of Chicago on the one hand—Schwinn being the equivalent of modern-day empires like Trek, Specialized, and Easton-Bell Sports, all rolled into one and ruled like a kingdom by whichever male member of the Schwinn Family Trust happened to be dictator-for-life at the moment. And on the other hand, you had, well, everyone else.

Schwinn was so powerful, in fact, that they could book their preseason orders pretty much whenever they wanted, and with the actual product largely sight unseen, and leave the scraps for the peons.

But in the 1980’s two things happened: the rise of the mountain bike, and the collapse of Schwinn family. Some historians correlate these events to a higher degree than others, but the net effect was the same either way.  Schwinn had a massive, vertically integrated, almost industrial revolution approach to supply chain management. The new breed (like Specialized and GT and, later on, Trek and Cannondale) had much less interest in being in the manufacturing end of the business. They saw—correctly as it happened—that Asian-sourced manufacturing was not just cheaper, but ultimately better than Made-In-USA  product (with the possible exception of the old Schwinn Paramount factory, which survives to this day as the artisan brand Waterford). But Asian manufacturing meant longer lead times—that ocean’s not going to cross itself, you know. And lacking the power of suppliers to compel retailer orders the way the old Schwinn had, that meant earlier trade shows.

The Bottom Line. Strategically, Interbike is all about getting retailers to the show. Everything else is window-dressing: deliver enough retailers ready to buy stuff, and suppliers will flock to Tierra del Fuego on Mother’s Day. And the current fourth-week-in-September dates represent that point of dynamic tension between the latest date suppliers can wait for retailers’ orders, and the earliest date when the retailers are willing to show up and deliver them.

Tweaking these dates get you into hot water no matter which way you jump. Move them up a week and you’re in the middle of the High Holidays for those of the Jewish persuasion. Push them back a week into October and even more suppliers will defect and decide it’s more cost-effective to put on their own shows, as any number of big (and even not-so-big) suppliers are doing.

Some folks might even say naive things like, why don’t we time our trade shows/model-year introductions to generate excitement among consumers and maximize increase sales industry wide? But as shown above, that would just be silly.

Next week: Part II

To learn more about Rick and his background, check out his bio here or go to his site here.