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Kona Bicycles winding down and up for sale as parent company abandons struggling bike market

Days after staff were spotted taking the brand’s stall down at the Sea Otter Classic, extensive job cuts have been reported – though one UK distributor says they will continue to import Kona stock

Just days after staff members were spotted ominously taking down the brand’s stall at the Sea Otter Classic event, less than 24 hours after setting it up, Kona Bicycles has been put up for sale by its parent company, amid reports of a winding down process and extensive job cuts.

Kent Outdoors, a Canada-based sporting goods conglomerate which bought Kona from its founders in 2022 and appointed a new CFO this week, announced on Friday that, following a “strategic review” of the business, it would “continue to seek a buyer” for off-road bike manufacturer Kona, which it has been reportedly trying to offload to prospective buyers for quite some time.

“In connection with the investment of capital and the management team coming onboard, the company performed a strategic review of its operating units and determined that it would continue to seek a buyer for its bike business, Kona,” the Kent Outdoors press release said.

“This move allows the company to direct its resources toward investment in its key water sports businesses. The bike industry has faced very significant challenges in the post-Covid world and Kona has not been immune to these headwinds.”

According to Singletrack World, an anonymous source from within the company said that Kent believes that the global cycling industry is unlikely to fully recover from its current struggles for 18 months to two years, and that they are not prepared to wait that long.

> “You have to dig in for the next three to five years”: What lies ahead for a struggling bike industry in 2024?

Kent therefore wishes to abandon the bike sector to focus on its existing water sports brands, where recovery is already underway.

Another source has told the website that a company ‘town hall’ meeting on Thursday resulted in extensive job losses, as Kent prepares to wind Kona down completely as it prepares for a sale of only the brand’s intellectual property, in a similar manner to Frasers Group’s recent acquisition of the remnants of Wiggle Chain Reaction.

It is understood that Kent Outdoors will offer some Kona staff members positions within its other brands, though the vast majority of staff are expected to be let go.

The writing on the wall for Kona – founded in Vancouver in 1988 by Dan Gerhard, Jake Heilbron, and Jimbo Holmstrom and famous for its mountain and cyclocross bikes – was clearly evident at the Sea Otter Classic, a major bicycle industry expo in Monterey, California on Wednesday, when staff members were spotted taking down the brand’s stall after one day before leaving the event.

Earlier this month, five-time world solo 24-hour mountain bike champion Cory Wallace posted on Instagram to say that the Kona race team was going to be terminated, while this week Kent Outdoors appointed new CFO Rob Otto with the explicit aim to “pursue new opportunities”.

Kona Ouroboros gravel bike 1

> Kona Bicycles’ parent company appoints new CFO amidst fears of “cost-cutting measures” after brand pulled out of major cycle show at last minute

All this uncertainty also comes in the wake of Kona unveiling a new full carbon gravel offering, the Ouroboros, which was due to be shown off at the brand’s ill-fated Sea Otter stand this week.

And, despite reports that the brand is being wound down, Lancashire-based distributor Mount Green Cycles has told its dealers that it continues to import and distribute Kona bikes into the UK market – “while stocks last” – with owner Scott Taylor pinning the blame for the manufacturer’s current troubles on Kent Outdoors’ policies and decisions, and not Kona’s bike sales or the cycling market in general.

“In the coming hours Kent Outdoors will put live a press release announcing they are pulling out of the bike business, alongside more positive news for the rest of their portfolio of brands,” Taylor said in a statement.

“This means, through no fault of its staff, its amazing product or its global network of loyal fans, Kona USA and its EU entities will cease trading in the coming months.”

However, Taylor also claimed that due to Kent Outdoors slowing their supply chains over the past year as they considered the brand’s future, there is – instead of the overstocking dominating the bike industry during this turbulent post-Covid period – a shortage of some Kona models, with some dealers putting in back orders for certain models.

Taylor added that he intends to satisfy that demand by moving some of the stock currently sitting in factories into the UK. Therefore, Taylor claims that, until a buyer is found at least, UK customers should still be able to buy Kona bikes with full warranty even if the brand shuts down completely in the near future.

Ryan joined road.cc in December 2021 and since then has kept the site’s readers and listeners informed and enthralled (well at least occasionally) on news, the live blog, and the road.cc Podcast. After boarding a wrong bus at the world championships and ruining a good pair of jeans at the cyclocross, he now serves as road.cc’s senior news writer. Before his foray into cycling journalism, he wallowed in the equally pitiless world of academia, where he wrote a book about Victorian politics and droned on about cycling and bikes to classes of bored students (while taking every chance he could get to talk about cycling in print or on the radio). He can be found riding his bike very slowly around the narrow, scenic country lanes of Co. Down.

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18 comments

Avatar
don simon fbpe | 1 month ago
4 likes

Got to love capitalism.

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Dnnnnnn replied to don simon fbpe | 1 month ago
1 like

Yes, Kona (and most other bike brands) would probably never have existed without it.

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imajez replied to Dnnnnnn | 1 month ago
3 likes

It should be noted that socialism doesn't prevent folk from starting or running their own succesful busineses. It's about making sure no-one get left to literally die from hunger. cold, sickness, injury, to get free education, get to work on decent roads, have an army to defend the country, police to catch bad guys, firemen to rescue cats from trees etc. 
Capitalism however is about making fewer and fewer people ublievable rich and making everyone else ever poorer. Capitalism is literally about concentrating capital. 

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Dnnnnnn replied to imajez | 1 month ago
0 likes

I'm all for a much more socialist approach to the sorts of things you mention, where there are clear market failures and a need for decent universal provision. But premium bike brands don't seem to be one of those.

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paulgardener@gm... replied to imajez | 1 month ago
2 likes

Except socialism doesn't work like that in real life. It's the capitals countries that try to look after those in need, and the average person's better offer in overall lifestyle and qualityof life. There are many more in need people in the socialist countries that don't get help, and the quality of life is generally lower.

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hawkinspeter replied to paulgardener@gmail.com | 1 month ago
5 likes

paulgardener [at] gmail.com wrote:

Except socialism doesn't work like that in real life. It's the capitals countries that try to look after those in need, and the average person's better offer in overall lifestyle and qualityof life. There are many more in need people in the socialist countries that don't get help, and the quality of life is generally lower.

Are you sure? Norway is socialist and has a very high quality of life.

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Dnnnnnn replied to hawkinspeter | 1 month ago
0 likes

hawkinspeter wrote:

Norway is socialist

I think that's debatable. It's certainly more socialist in its state ownership of some major parts of the economy, workers' representation and the emphasis on social welfare supported by redistributive taxes (and fossil fuels) but there's plenty capitalism and private ownership there too.
No disagreement about the quality of life though.

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chrisonabike replied to Dnnnnnn | 1 month ago
2 likes

That's perspective though - not a small number of americans would consider the current UK government "socialist".

Also - "socialist" is not the same as "communist" (presumably what you're suggesting with "capitalism and private ownership").  Even for regimes declared communist it seems that few (any?) really managed to abolish private ownership - though they might have tried pretty hard of course.  And many / most(?) have capitalism (the NEP in early Soviet Russia, China's current situation) albeit with varying levels of state interference.

And on the flip side even capitalist America has quite a lot of corporate regulation - ignore that sufficiently and they'll even send you to jail!

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brooksby replied to chrisonabike | 1 month ago
4 likes

chrisonabike wrote:

That's perspective though - not a small number of americans would consider the current UK government "socialist".

Those 'Mericans consider any sort of social security, nationalised healthcare etc etc as "socialist".  Which is insane.  (IMO.  YMMV).

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hawkinspeter replied to brooksby | 1 month ago
3 likes

brooksby wrote:

chrisonabike wrote:

That's perspective though - not a small number of americans would consider the current UK government "socialist".

Those 'Mericans consider any sort of social security, nationalised healthcare etc etc as "socialist".  Which is insane.  (IMO.  YMMV).

To be fair, I think you mean the residents of the U.S. rather than general Americans which would include Canada, Mexico, Brazil, Ecuador etc.

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hawkinspeter replied to chrisonabike | 1 month ago
3 likes

chrisonabike wrote:

And on the flip side even capitalist America has quite a lot of corporate regulation - ignore that sufficiently and they'll even send you to jail!

I think you'll find that you'll only go to jail if rich people are losing money from it.

Otherwise, they'll issue a comparatively small fine that will likely be less than the company made by not following regulations:

https://arstechnica.com/tech-policy/2024/03/cable-isp-fined-10000-for-lying-to-fcc-about-where-it-offers-broadband/

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Dnnnnnn replied to chrisonabike | 1 month ago
0 likes

chrisonabike wrote:

That's perspective though

Well, yes, that's kinda my point. I think stating that "Norway is socialist" is a questionable perspective. I'd say it was a Nordic social democracy. But whatevs.

My original point - which definitely is debatable - was that US capitalism both giveth and taketh away brands like Kona*. There are lots of other factors (e.g. language, demography, cultural, etc.) but there seems a reasonable argument that US capitalism is particularly good at business innovation and growth in part because it's easy to behave as Kent Outdoors do (whether that's good or not is a different thing - we certainly don't need all the consumer choices we have and they're not without cost but that's another online timewaster).

* with the caveat they're just selling it.

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mike the bike replied to imajez | 1 month ago
1 like

imajez wrote:

  ...... Capitalism however is about making fewer and fewer people ublievable rich and making everyone else ever poorer. Capitalism is literally about concentrating capital. 

If you ask the world's leading economic commentators how many people have been rescued from abject poverty by capitalism the average answer would probably be in the range 1 billion to 1.5 billion.  This hardly squares with your assertion.

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shiggy | 1 month ago
1 like

Again, Kent Outdoors is NOT A CANADIAN BASED COMPANY!

their headquarters are in Utah USA

https://kentoutdoors.com/careers

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brooksby | 1 month ago
8 likes

If Kent Outdoors wants to focus on its key water-sports business, then why did they buy a bicycle company less than two years ago?

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jaymack replied to brooksby | 1 month ago
6 likes

Because they're capatlists and they want to make a profit rather than them being cycling enthusiasts wanting to make a living.

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shiggy replied to brooksby | 1 month ago
3 likes

brooksby wrote:

If Kent Outdoors wants to focus on its key water-sports business, then why did they buy a bicycle company less than two years ago?

the CEO that wanted the purchase of Kona was kicked out 8 months later. Basically Kona lost their only advocate at Kent 

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MatzeLoCal replied to brooksby | 1 month ago
1 like

Two years ago the cycling industry wasn't in a struggle, even more cycling was booming back then. Nevertheless there have been signs that the boom has ended, but not sure if the Kent realized that the boom ist over.

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