In a move that took many in the specialty run and bicycle apparel industry by surprise, Cannondale announced that it will acquire Sugoi Performance Apparel for an undisclosed amount. This is an especially curious move by Sugoi, who has been consistently growing sales over the past few years and seemed to be building momentum towards international expansion. At the same time, the changes implemented by Pegasus Capital to bring Cannondale out of Bankruptcy in May of 2003, which included several job cuts and outsourcing apparel manufacturing, seem to be paying some dividends.

SEW spoke with Sugoi’s marketing director, Stan Wong, who said that the two companies will operate as separate, autonomous organizations and both sales forces will remain intact. Additionally, Cannondale and Sugoi headquarters will remain in their current locations. He also stated that Sugoi’s owners, David Hollands and Carol Pratner, were working to take the company “to the next level” by bringing in new talent on the design and management teams when Cannondale approached them with this offer.

“They realized that this deal could accelerate the growth of the company,” said Wong. “It is really about having access to experience and resources on a global scale.”

While the benefits for Sugoi are clearly in international expansion and the access to Cannondale’s infrastructure, the synergies for Cannondale seem to be completely dependent on Sugoi’s future growth. The two companies are banking on the Sugoi brand’s and the Cannondale apparel brand’s abilities to speak to different types of customers and have made it a top priority to “crystallize the brand focus” between the two.

David Hollands and Carol Pratner will remain with Sugoi for the next six months to facilitate the transition to the new management team which the two had put in place prior to the acquisition. Wong said that the sale of the company was really more about the future growth of the company than any desire by Pratner and Hollands to step aside.

Calls made to Cannondale management were not returned at press time.