Avanti Bicycle Co. buys Pacific Brands Bicycle Division

[AUbicycles]

Big Industry News:
Avanti Bicycle Co. have just announced that they have bought the Pacific Brand Bicycle Division who carry Norco, Malvern Star, Ridley, Repco, Bell, Giro and more.

[rudeboy]

Steve Paraskevas adds "We will have the most compelling range of product in the market and with the collective group of brands and a wider distribution network we will be able to channel more investment into areas such as marketing and product development to continue to help grow cycling in Australia and New Zealand".

as Pacific brands has a distribution deal with Woolworths does this mean that Advanti will be sold in Big W stores or will bikes like the Diamondback be sold in LBS

[AUbicycles]

I remember when Diamondbacks were sold in LBS's but you will have to forgive me, those were my BMX days and I don't know how this brand fares.

With such a purchase it would usually mean that distribution channels are open - however:
• It may not be in the interest of Avanti to put their 'Avanti' bikes into supermarkets
• The retailer may not be able to accommodate a wider range or be able to sell higher priced bikes
• An open distribution channel for one brand wouldn't necessarily mean other brands will be taken up

For AvantiPlus dealers it should however mean easier access to more good brands.

[MattyK]

FYI, their 2012 dealer manual/catalogue:
http://issuu.com/avantiplus/docs/2012_b ... _manual_lr

[rudeboy]

I remember when Diamondbacks were sold in LBS's but you will have to forgive me, those were my BMX days and I don't know how this brand fares.

With such a purchase it would usually mean that distribution channels are open - however:
• It may not be in the interest of Avanti to put their 'Avanti' bikes into supermarkets
• The retailer may not be able to accommodate a wider range or be able to sell higher priced bikes
• An open distribution channel for one brand wouldn't necessarily mean other brands will be taken up

For AvantiPlus dealers it should however mean easier access to more good brands.

for me the diamondback SR1 has been a great entry level bike that was bought for price mainly. Only time will tell how it stands up and as I am currently 125kg+ it is being heavily load tested.

If it does me 12-18 months I will be happy because if I am still motivated like I am now an upgrade will be in order.

They are currently only available through Big W online and as such could mean problems when it comes to servicing, as my LBS expressed his reluctance to service department store bikes.

[familyguy]

I'm not sure about this. Less competition within the Australian market through less distributors/importers? More competition as more LBS' play against one another with Avanti/MS/Masi/Norco in each store? Will Avanti now take over/honour the lifetime warranty on my C5 should it crack?

I think they'll keep the Avanti/MS/Masi/etc stuff well away from any Big W dealings.

Jim

[trailgumby]

That will have some impact on the BikeHub franchise/chain of stores. The Pacific Brands collection of bike brands was their main line.

[familyguy]

In our area, there's enough separation to give BikeHub and Avanti Plus their own 'area', so to speak. The competition was there, but you couldnt walk from one to the other. For those who have the two stores in close proximity, competition within the same branding now will be interesting to see

Jim

[pauls51]

Found out yesterday morning as my mrs got the chop..... No confirmation yet whether Ridley is included in the deal

[gdt]

as Pacific brands has a distribution deal with Woolworths does this mean that Advanti will be sold in Big W stores or will bikes like the Diamondback be sold in LBS

Selling bikes would trash the Avanti brand, but I hope you'd see some accessories.

Selling a $2K to $12K bike is not a good deal for the department stores: it's expensive stock selling at a slow rate which takes expertise to sell; not really a good fit for modern department stores. It's why they don't sell cars. It's why they sell Apple computers (they are expensive, but the simple model range means you don't need to know much to sell them).

The question at the top of my mind is what happens to the Malvern Star Oppy. It is fierce competition for the Avanti range.

I assume that a number of the Bike Hub stores are toast.

This purchase is the potential for a single distributor to build a low to top end range of bikes sold through various levels of outlet. It would do cycling in Australia the world of good if Avanti made the most of that opportunity. For example, the bike display in the department store could be managed by Avanti/BikeHub rather than having bikes assembled by the store's staff. The win for Avanti would be to drive business via the department store to their own stores for people seeking a more expensive bike.

To do that you might brand some of the more swank items in the department store display as Avanti/Oppy. That's the main reason you might keep the Malvern Star brand -- to whack MStar on the trendy stuff, Malvern Star on the usual stuff, and Malvern Star Oppy on the top shelf stuff.

With the above in mind, I very much hope we'll see Woolies with Malvern Star bikes and a few Oppy/Avanti accessories.

[rudeboy]

big W and wooliies are taking the threat from Costco seriously and there are rumours of Big W expanding their range across the store to things you would not normally expect. Something like gdt suggest may be possible, look at the way they have their optical department set up.

[trailgumby]

With the above in mind, I very much hope we'll see Woolies with Malvern Star bikes and a few Oppy/Avanti accessories.

Branding suicide.

[im_no_pro]

I assume that a number of the Bike Hub stores are toast.

Pac Brands were only the franchisor. To can Bike Hub stores they would either have to pay out the Franchisee or wait until the end of the franchise agreement AFAIK. I wouldnt expect it in the short term. Some stores may be company owned however, im not 100% sure.

[im_no_pro]

With the above in mind, I very much hope we'll see Woolies with Malvern Star bikes and a few Oppy/Avanti accessories.

Branding suicide.

Not necessarily. If their view is they have too many brands competing in the same space, they could quite easily reposition a brand into another segment of the market. If, for example, it was MS then it would mean the end of MS as we currently know it, but not be brand suicide. They could quite possibly leverage more profit out of a lower cost base product with a wider market appeal/reach.

[pauls51]

[\quote]

Pac Brands were only the franchisor. To can Bike Hub stores they would either have to pay out the Franchisee or wait until the end of the franchise agreement AFAIK. I wouldnt expect it in the short term. Some stores may be company owned however, im not 100% sure.

Correct... I know of a few Hub stores that are 100% owned by Pac brands will now be owned by Avanti

[familyguy]

With the above in mind, I very much hope we'll see Woolies with Malvern Star bikes and a few Oppy/Avanti accessories.

Branding suicide.

Not necessarily. If their view is they have too many brands competing in the same space, they could quite easily reposition a brand into another segment of the market. If, for example, it was MS then it would mean the end of MS as we currently know it, but not be brand suicide. They could quite possibly leverage more profit out of a lower cost base product with a wider market appeal/reach.

After the work Pac Brands did to lift Malvern Star from historical to current, would it be smart for Avanti to supermarket-ize the brand now? I'll be going past my LBS to discuss ramifications tonight...

Jim

[birdbrain]

Used to be a great company when I worked for South Pacific Tyres. Not so now.

[im_no_pro]

After the work Pac Brands did to lift Malvern Star from historical to current, would it be smart for Avanti to supermarket-ize the brand now? I'll be going past my LBS to discuss ramifications tonight...

Jim

Possibly, but I have no idea as I am unfamiliar with Avanti's branding strategies/direction. As I said, if they feel they have too many brands occupying the same space within a certain market its a strategy they may pursue. They may not do it with MS, it could be another brand (I just used MS as an example)

[familyguy]

Yes, it may well be Malvern Star. The only other realistic possibility (as my feeble business mind sees it) is Haro. I think Norco has too much of a MTB name to push it towards supermarkets. Its a great way to remove competition, thats for sure. That said, I think there's scope for the two to exist and not promote monopolies/step on each others toes. Given that some of the BikeHub stores are independently owned under franchise, so it will be interesting to see if they pick up Avanti brands at all given the close relationship with Pac Brands.

Jim

[yarravalleyplodder]

are there not synergies in the manufacture of the bikes and the added buying power in purchasing components

what colour paint and branding stickers are easy to change. Have 2 or 3 brands for the woolies and big w and have a couple of premium brands for the LBS. I do agree that selling avanti in big w would seriously devalue the brand

[rustguard]

I do agree that selling avanti in big w would seriously devalue the brand

It wouldnt devalue it for me. Its more what they would do to an avanti to sell it in bigW that would devalue it for me.

[AUbicycles]

While some brands may compete, I would not expect to see a direct competition in comparable models. In Store A you would see Malvern Star and in Store B you would see Avanti - so a consumer shopping around can compare and choose - and in the end a sale is generated. As these brands are own brands (rather than just distributed) it will be interesting to see how they could be potentially merged in production to sink costs - and whether a single bike may eventually be available under two different brands.

Regarding warranty, you shouldn't have any worries there - the company sale doesn't affect this with the exception that such cases may over time be handled differently.

[munga]

so not much chance of another decent repco, then? i always hoped they would reinvent the brand and make it something decent, but it'll prolly drop of the sheet altogether now..

[rustguard]

it will be interesting to see how they could be potentially merged in production to sink costs - and whether a single bike may eventually be available under two different brands.

yes but would it be a melvanti or a avantstar

[R12RT]

The industry rumours have already started.

The owner of my LBS told me yesterday that there would be no more Oppy's and Malvern Star would go "Straught to K-mart".

This would be sad giver the time, effort, and money that has gone into trying to reestablish Malvern Star as a reputable brand in Australia again