Nike Cuts Ties with Trek

Nike plans to drop most of its cycling apparel and footwear line for consumers as it narrows its focus to outfitting cycling teams and Nike-endorsed athletes. Nike's seven-year relationship with Trek Bicycle Corp., which produces clothing and shoes for cyclists under the Nike brand, will not be renewed after it ends this year, Nike spokesman Derek Kent told local papers. The pullback was first reported on local blog bikeportland.org.

Nike will reportedly eliminate some positions, but Kent said the company expects to retain the “vast majority” of its cycling employees to work on cycling and other sport-specific initiatives. Nike will continue to distribute its Discovery Channel line, Lance Armstrong 10//2 collection, and specialty jerseys. The scaling back in cycling is “consistent with the road map” laid out in February by Chief Executive Mark Parker to “streamline, edit and optimize” Nike's opportunities, Kent said. At the time, Nike said it plans to reorganize to focus on its core businesses of running, basketball, soccer, men's training, women's fitness and sport culture.

Trek will finish work on the new fall line of products and continue to distribute products into 2008. The company will be putting more resources into its own Trek line.

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

Nike Cuts Ties with Trek

Nike plans to drop most of its cycling apparel and footwear line for consumers as it narrows its focus to outfitting cycling teams and Nike-endorser athletes. Nike's seven-year relationship with Trek Bicycle Corp., which produces clothing and shoes for cyclists under the Nike brand, will not be renewed after it ends this year, Nike spokesman Derek Kent told The Oregonian.

According to the Portland-based newspaper, Nike will eliminate some positions, but Kent said the company expects to retain the “vast majority” of its cycling employees to work on cycling or other sport-specific initiatives. Nike will continue to distribute its Discovery Channel line, Lance Armstrong 10//2 collection, and specialty jerseys, he said.

The pullback, first reported on local blog bikeportland.org, reflects the difficulty Nike has had making a name for itself among established cycling brands such as Sidi, Shimano and Castelli, according to the Oregonian.

The scaling back in cycling is “consistent with the road map” laid out in February by Chief Executive Mark Parker to “streamline, edit and optimize” Nike's opportunities, Kent said. At the time, Nike said plans to reorganize to focus on its core consumer businesses of running, basketball, soccer, men's training, women's fitness and sport culture.

Nike had developed cycling footwear and apparel for years, but it launched its most aggressive effort after cancer survivor Lance Armstrong's first Tour de France win in 1999. The deal with Trek was inked in 2000 and the first Swoosh-branded products from Trek began appearing in 2001. Under the licensing agreement, Trek and Nike jointly worked on the development and manufacturing, and Trek handled distribution through independent bike dealerships and Nike stores.

But Trek said ultimately it became clear that it did not make financial sense to continue working with Nike.

“It was not a very profitable business for us,” Pat Sullivan, a general manager for Wisconsin-based Trek told the Oregonian. He added that because Trek paid Nike royalties, the business did not seem to generate much enthusiasm on Nike's side.

“It was in both parties' best interest to move on,” he said.

Trek will finish work on the new fall line of products and continue to distribute products into 2008, Sullivan said. The company, he said, will be “putting more resources” into its own Trek line.

About The Author

Thomas J. Ryan

Thomas J. Ryan Senior Business Editor | SGB Media tryan@sgbonline.com | 917.375.4699

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