Advanced Sports International (ASI), maker of Fuji, SE Kestral, Breezer and Phat Cycles bike brands, has acquired the nation’s largest independent bicycle retailer, Performance Bicycle, for an undisclosed amount.

Private-equity firm North Castle Partners sold the business, which it had purchased in 2007 and grew from 74 locations to more than 100.

ASI formed Advanced Sports Enterprises to acquire Performance Bicycle, and the new parent company will oversee brand development, wholesale and retail operations while keeping ASI’s wholesale and Performance Bicycle’s retail operations separate, officials said.

ASI President and CEO Patrick J. Cunnane will continue to lead the brand development and wholesale division under the ASI banner in Philadelphia, while Performance Bicycle CEO David Pruitt will continue to lead the retail division under Performance Bicycle in North Carolina. Cunnane will be the CEO of Advanced Sports Enterprises.

“This move capitalizes on continuing changes in the bicycle industry,” Cunnane said. “ASI has seen remarkable growth over the last decade and, like so many of our customers, Performance has been an instrumental partner each step of the way. As our industry continues to evolve, ASE is ready to grow.”

“Competitive differentiation is absolutely critical given the historic shift we’re seeing in consumer buying behavior and the retail landscape as a whole,” Pruitt said. “This new business model will provide tangible benefits for both companies and will fuel the next round of growth for Performance. This will be great for our associates, our vendor partners and our customers. We’re very excited to move forward under this new structure.”

The move by ASI illustrates a potential growing movement within the active-lifestyle space for vendors to buy retailers as an alternative or additional route to their own direct-to-consumer investments. Earlier this year in the fitness equipment channel, vendor Johnson Health Tech — parent to Matrix, Vision and Horizon brands — closed on its second of two U.S. specialty retailer acquisitions in the United States to grow its footprint to more than 100 stores.

Specific to the bike industry, ASI’s purchase of Performance Bicycle illustrates the growing frustration of bicycle manufacturers who view the independent bicycle dealership (IBD) model as broken, but are also learning how difficult and expensive it can be to sell direct-to-consumer.

Lazard Middle Market Advisory served as the exclusive sell-side advisor to Performance Bicycle and North Castle Partners. Within the past year, North Castle Partners also sold nutritional supplement brand Doctor’s Best Inc. and fitness equipment manufacturer Octane Fitness.

Photo courtesy Fuji Bikes/ASI