This year has been quite active for many apparel companies in the bike market, not only from new products and evolving designs, but also on the M&A front, where we now see two of the biggest brands in bike apparel now under new ownership. After months of rumors and speculation about the future of Pearl Izumi, fitness company, Nautilus in June announced it had acquired the running and bike brand for $68 million in cash and about $6 million in assumed debt. Shortly thereafter, Cannondale signed a deal to acquire Sugoi for an undisclosed amount.

Neither acquisition significantly consolidates the marketplace; however, the two deals combined could have some implications for the competitive landscape. Acquisitions and the integration that follows can often be difficult for a brand and some vendors feel they have a window of opportunity to grab some market share while these two brands are distracted. Several apparel brands throughout the industry are ramping up their efforts to attract new IBD accounts as the industry sifts through the ramifications of these acquisitions.

Pearl Izumi officials do not think there will be a problem. In fact, Ron Arp, Nautilus’ VP of corporate communications feels like the opposite is true. Arp told BOSS, “This will really leave the brand free to focus on creating and marketing the best high performance fitness apparel. The brand has been growing in the high teens – at an annual rate – for the past few years, and we expect that to accelerate.”

Similar sentiments were expressed by Sugoi management. BOSS 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.

Hollands and Pratner will remain with Sugoi for the next six months to facilitate the transition to the new management team that the two had put in place prior to the acquisition.

Arp also said that the “backbone” of Pearl – the design and sourcing teams – will be used to roll out other branded apparel products. Nautilus has conducted research that shows several of its brands, which include Nautilus, Stairmaster, Schwinn Fitness, Bowflex, and Trimline, would be well accepted by the market. The new brands should roll out as early as next year.

The Cannondale-Sugoi deal is unlikely to provide the same expansion opportunities, but it will give the two brands better economies of scale with two brands now able to share manufacturing and sourcing capabilities. The real challenge will be in the brand positioning.