I didn’t realise that GT bikes were Dutch now. Road.cc is reporting its a decision by their Dutch owners to restructure but they are continuing to sell and it sounds like overall Pon Holdings is on sound footing financially.
PON, as an overall company, is by all reports just fine…GT, as a brand within their portfolio, is not.
While they may be “continuing to sell bikes”, it is existing inventory and no new models are being developed and no additional inventory is being purchased.
Ramping up from 8 to 23 employees and then laying most of them off after ~6 months, combined with the above inventory sell off, indicates they are circling the drain.
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My first MTB was a GT Outpost. I bought it with one of my first military paychecks in Ketchikan Alaska. Almost never rode off road and it was stolen a decade later at the grocery store 
(I still have my first “real” BMX, it’s in rough shape, but also a Diamondback. My parents wouldn’t let me race 
)
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Rocky Mountain has entered the chat…
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Bummer… I really like my RM bike rack!
Sucks to see RM go through this, I have a few friends that are directly impacted by this.
BUT, they’ve made some really poor decisions since 2020 or so. Increased prices, with some poor design and quality control, pushed them into a boutique price point without boutique quality. They also for some bizarre reason chose to develop their own electric motor for their E-bike line up, which is kind of crazy.
They seem to hit a negative feedback loop where they were bleeding money, and made it worse through poor shop relations, reduced quality control, but maintained prices.
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Filing is available for Rocky Mountain. It’s pretty bleak.
Good lord….their gross margin was only 21% last year. Their gross margin!
27% in 2023 and 2022 also ain’t great.
What’s worse is that the margins were boosted significantly by the Faucher division. The RM division had a gross margin of 12% last year.
Not certain what the Faucher division is or does, but I would look to spin that off and shutter RM. There is no future there, IMO.
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Industrial and transportation hardware supplier/distributor.
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Can you give more context? Why is a gross margin of 12-21% so bad? I know absolutely nothing about this stuff but am super interested!
Well, this can get pretty long and complicated, so I’ll try and just hit the headlines. Gross sales and margin are what you realize at the time of purchase. For simplicity sake, if every bike they sold went for $100, they would generate ~$12 of profit.at the top.
From that 13%, you need to cover not only all your overhead and expenses (rent, salaries, marketing, health insurance, etc) AND n have enough left over for some profit.
Suffice to say, 12% isn’t going to go far. Again, in broad strokes, and depending on the structure and sales volume of the company, you want your net margin (margin after EBITDA) to be somewhere in the 12% range. (Yes, those are very broad strokes….there are many exceptions). But in general for a company sourcing from overseas, it is a good generalization.
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This is the unfortunate but classic story of older bike brands. Nothing in that catalog differentiates them from any other brand, save the nostalgia of the name and a frame-styling quirk. Honestly, the same is true of Rocky Mountain, and this is coming from a current RM owner.
I had a Zaskar BITD, and I loved that bike; the time-honored adage of never selling a bike applies here; I shouldn’t have sold it. In the grand scheme of things, I likely got nothing for it anyway. I’d like to get one of their “gravel” frames for my son’s all-road bike, but we’ll see.
It’s a tough business these days, and I only see it getting tougher, at least in the short term.
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Most mountain bikes look pretty similar these days. I dare anyone to tell a silhouette of a Trek apart from a Transition or Giant etc. They’ve all found similar geometries, similar components, etc. Feels like we’re really splitting hairs, especially on the XC bike size. I could not for the life of me tell apart an Epic 8 from a Blur TR from a Yeti ASR.
My newest bike is actually pretty cool, a Forbidden Druid. First bike I’ve bought in a while that’s interesting to ride. Not perfect, but a great bike for all around riding.
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Ooof. Just told my shop that I want a new Rocky Mountain Element in the spring.
Hard to see how I go through with that if there’s no more company for warranty/parts support.
Their books look pretty dire. Not sure how they come back from this.