When Pacific Cycles acquired Schwinn two years ago independent bike dealers started having second thoughts about the Schwinn brand. When Pacific began distributing the bikes to retailers like Wal-Mart, Target, and Toys ‘R Us, I.B.D.’s started jumping ship. The general sentiment was that small bike shop owners could never compete with “big-box” stores, one of which already has $140 billion in sales this year.

In an effort to get the dealers back into the fold, Pacific has just launched a campaign around new branding for a higher tier line targeted to the smaller retailers.
In an exclusive interview with The BOSS Report, Richard Wittenberg said the new Schwinn Select brand is “targeted at specialty retailers and sporting goods stores”, going on to say that keeping the IBD market intact “has been a challenge for us”.

Wittenberg did point out that their market research indicates that Schwinn is still the most powerful brand with the most recognition.

The new bikes will retail for more than the traditional Schwinn. Wittenberg said “The average price for an adult geared bicycle is around $150, the Schwinn Select bicycles will start at just north of $200.”

The idea is to differentiate the higher-end Schwinn from the big-box models. Schwinn Select bicycles are made in separate facilities, with more, upgraded features.
Wittenberg went on to say that the fears over competing with Wal-Mart were “unfounded” because “there are your value-based customers and your service-based customers and the two never mix.”

BOSS performed an informal survey of some independent bike dealers and found that the average bicycle sale was between $450 and $800.

“We don’t discount our bikes or play the price game, our customers come to us because we give them a higher level of service, and a better riding experience,” said Ilan Paltrow, owner of Ultimate Bicycles and Bicycle Sport, both in Charlotte, NC.

While Pacific’s idea may be in-line with IBD’s existing strategies, it may be too little too late. In one published report it was stated that between 50%-70% of all Schwinn dealers have dropped the brand or gone out of business since Pacific’s acquisition.