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Mavic in receivership - how did it come to this for one of cycling's most famous brands?

We examine the factors that put the company into financial difficulty - and what may happen next

Mavic, one of the most famous brands in cycling, faces a very uncertain future after news emerged yesterday that it has fallen into receivership. So, what went wrong with the company which has been a partner of the Tour de France for the past four decades, and what are the implications for the future of the business?

Last December, the company, which is based in Annecy in the French Alps, entered a process called conciliation which, under French insolvency law, seeks to arrive at an agreement between a business in difficulties and its creditors.

Then, according to the US-based trade website Bicycle Retailer and Industry News (BRAIN), in February this year its management was put in the hands of By Saving, a French firm specialising in turning around struggling businesses.

Yesterday, however, it emerged that the company had this week entered a process called redressement judiciaire, under which a court appoints a receiver who, working with management, seeks to maximise returns to creditors.

In Mavic’s case, six months have been granted for the process, which is the final one available to try and rescue a failing company, to be completed.

The options, at the end of that, are stark. One is to repay the debts and agree a business plan going forward – difficult at the best of times, let alone when the coronavirus pandemic is set cause a global economic crisis. Otherwise, if no buyer for the business can be found, whatever assets it has will be liquidated.  

What led to Mavic's difficulties?

Founded in 1889, the brand was bought in 2005 by the Finland-based Amer Sports, whose other businesses include the winter sports brands Atomic and Salomon – the latter becoming Mavic’s direct parent company – Wilson, active in sports including golf tennis and NFL, and sports fashion brand Peak Performance.

Amer Sports, which still owns Enve, decided to sell Mavic – which employees 200 people in France and a further 50 elsewhere – following a strategic review of the business initiated in 2018.

In March last year it was announced that agreement had been reached to sell the business to Los Angeles-based private equity firm Regent LP, which confirmed completion of the transaction in July.

Your complete guide to Mavic's 2019 road wheel range August 2018

Not so long ago, you couldn’t miss the Mavic brand and its distinctive black on yellow logo. The Annecy-based company, which had pioneered technology such as aluminium rims as well as disc wheels and was also an early leader in the development of electronic shifting – too far ahead of its time, perhaps, in that case – was also a major player in the original equipment manufacturer (OEM) market.

Whether it was a mountain bike or road bike, there was a high probability that if you were buying a complete bike, it would come with Mavic wheels as standard. And, as market leader, if you later looked to upgrade your wheels, the brand would likely have been among your top choices.

So what changed? Well, for Mavic, whose core business remains wheels – it also sells clothing, footwear and other equipment and components – there was the double-punch of many bike brands bringing wheels in-house, often by launching their own sub-brands, and of increased competition in the wheel market generally.

The first of those caused sales in the crucial OEM segment to plummet, while the second saw the arrival of smaller, more nimble competitors, that were quicker to understand the opportunities the internet provided in being able to build their brands and engage consumers.

At the same time, even before announcing its strategic review of the operation two years ago, it was apparent that Amer Sports did not view Mavic as one of its core brands, perhaps resulting in less investment being made in the business, and less attention being paid to its development by group management.

There was also a change in how the brand was distributed, at least here in the UK. Mavic stopped working with distributors, and instead went direct to dealers.

One effect of that is to have made the brand less ‘visible’ to consumers, and even to the trade – for example, the Mavic stand at industry-leading trade show Eurobike has been getting smaller and smaller over the years.

Mavic-branded cars may continue to provide the neutral service at the Tour de France, but it only sponsors one WorldTour team now, AG2R-La Mondiale. And while many of the world’s elite downhill mountain bikers still swear by the brand, elsewhere its presence has been gradually eroded over the years.

Sales in free-fall, losses mount

All of that has translated into sales that are now in free-fall – from €130 million a year in 2015 to barely half of that, €70 million last year, itself a 20.5 per cent decline on 2018’s €88 million. On that 2019 turnover of €70 million, the business made a net loss of €12.8 million.

At the time of Mavic’s sale last year, its former president, Gary Bryant, predicted a “bright future” for the brand. Quoted on trade website Bike Europe, he said the business was “Healthy, balanced between Aftermarket and OEM with a product portfolio consisting of wheels, footwear, apparel and helmets.”

He added: “This change in ownership will enable us to re-focus and drive our strategy across all our channels and regions, securing a bright future for the Mavic brand.

“As part of the transaction process and negotiation agreement, for the next three years, there is strictly no change regarding day-to-day business around development, supply or financial matters.”

Questions over change of ownership

It’s clear now, though, that when it was sold, Mavic was in serious financial difficulties, and this week, questions are being asked about the change of ownership itself.

France Bleu reports a representative of Mavic’s employees as saying that in recent days, “contrary to what had been publicly announced, Salomon did not sell the business to Regent LP but to a company M Sports, based in Delaware (USA), with no shareholder relationship with Regent.”

They demanded to know “under what conditions Salomon and the Amer Sports group sold Mavic.”

However, Amer Sports told France Bleu that it, too, “is a victim” and that “Regent hid the true identity of the purchasing shareholder.”

According to BRAIN, company documents registered in France show Mavic as being owned by M Sports International LLC, and that it is represented by one Michael Reinstein, who happens to be the chairman of Regent LP.

That leads us to believe that there is nothing untoward going on. Unlike a publicly listed group of companies such as Amer Sports which produce consolidated accounts, private equity firms manage their investments through setting up individual holding companies for them.

For legal reasons, Delaware is a popular state for companies in the US to be registered in, and M Sports International is exactly the kind of name that a private equity house might choose for the company it is setting up to house the acquired business.

Add in Reinstein being named in those French business filings, and it all seems above board, even if at first glance it appears that the companies are unrelated.

After Regent announced that it had bough the company last July, Reinstein said: “Mavic is one of the finest sports brands in the world and has been on the cutting edge of cycling technology since it was founded in 1889.”

“We are extremely proud to be a part of this incredible legacy and look forward to working closely with the world-class Mavic teams in France and around the globe to continue to define the best in cycling.”

As historic and pioneering a brand as it may once have been, there seems every possibility that the business behind it, if not the name itself, may not be with us much longer.

When approached by road.cc, a senior contact at Mavic said that they were unable to comment on the current situation.

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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34 comments

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jollygoodvelo | 3 years ago
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Here's an odd thing - I have obviously known about the TDF sponsorship since forever, and I knew that my old Raleigh has a beautiful set of MA40 anodised rims on it.  But I've only just noticed that my long-suffering Boardman CX also came with Mavics on it (XM319, nothing special).  Presumably they've lost some ground in the OEM market since it was made.

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Rik Mayals unde... | 3 years ago
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Anyone remember having Mavic rims back in the 70s and 80s? They never wore out. In recent years I have had new Open Pro rims built onto my winter bike every year.
But this isn't the reason why they have gone tits up. For a number of years they haven't given a fuck about the customers. Quality has dropped, they have gone from completely redesigning their wheel sets every 5 years to every 3 years. What they have done in conjunction with this is.....chucked all the spares away, refusing to sell them to bike shops. Even if there are spares available, my LBS tells me that it is anyones guess when he orders them if they actually turn up. Every wheel set has a different spoke design, after three years you can't get spares so in Mavic world you just throw them in the bin, and buy some new ones!
Mavic's arrogance has been the undoing of their business. I personally would never buy factory built wheels anymore. The way forward is to buy hand built wheels. You can spec everything yourself, if you break a spoke the wheel builder can easily fix it. They are in most cases much lighter and more lively than fancy looking factory built ones. Unless you're speccing Enve rims with Chris King hubs, they don't admittedly look as sexy as factory built wheels but are far, far superior. If they are built by someone who knows their trade, you may never break a spoke. Paul Hewitt builds all of my wheels, in 25 years I have never had to return a wheel for repair. My last set of Mavics, some £1200 Ksyrium SLRs, were shit. Forever creaking in the spoke holes, the only way to quieten them was to spray them liberally before each ride with WD40. My wheels which I specced on my new winter bike are H Plus Son Hydra rims on Hope road hubs. Awesome wheels, very light and very stiff. And they look good too.

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OldRidgeback | 3 years ago
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Mavic wheels were the best back in the day. But then venture capitalists came along and bought the company, and that was the beginning of the end.

I've seen this before in other industries, many times in fact. Venture capitalists want to make money quickly. So once they've got their hands on a firm they cut costs, with R&D and marketing being the first victims. They take as much profit as they can as quickly as they can, then sell on the brand while it still has a name that's valued. But the business has already suffered from the drop in R&D so it's future is less asured. Then the new owner, another venture capitalist, does more of the same. In a few years a leading brand has lost its shine and quality has dropped.

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Rik Mayals unde... replied to OldRidgeback | 3 years ago
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I agree. The worst thing is when the accountants run the business. They can fuck a trusted highly regarded component up by reducing quality to save a few pence. I remember when a vehicle manufacturer changed a ring in the gearchange of a vehicle. They changed the aluminium ring to a hard plastic one, it saved 20p per vehicle. But what they had for 18 months was gearchange failure on thousands of vehicles, which resulted in a new gearbox on warranty. The ring was quietly changed back to aluminium. 

Accountants do not look at the bigger picture, they look to maximise profits by cutting quality. It makes them look good.

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Dangerous Dan replied to OldRidgeback | 3 years ago
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Both of you don't seem to know the difference between venture capatilists, private equity firms.  Venture Capital firms supply investment capital either to startups or firms with significant growth possibilities. Mavic was neither of these.

Do you actually Amer Sports bought Mavic with the intent to destroy the brand?  I don't think so...  It would have been more fun to make a big pile of EUro notes and light them on fire. With 20/20 hindsight, they should have switched the management team a long time ago.

Private equity firms mostly buy companies which need investment capital but can't raise it from other investment sources.  They are often looking for business overlaps which  can be eliminated to reduce costs and increase profit.  I am guessing that Amer Sports thought that both Mavic and Salomon had manufacturing seasons which would allow the same resources to be used without impacting either company.  And I am guessing that Regent thought they could regain the OEM business and when they discovered that they couldn't they stopped putting more money on the bonfire.

Mavic developed new products after Amer Sports bought them; they were not very good. I had Mavic UST rims on a winter commuter, and any time the temperature dropped below 0F the spokes retainers came loose. As they say in Minnesota, USA: "Oh for fun!"

Lots of companies let bean counters mess up products.  My current employer has done it a few times.  For what it is worth, we are a publicly traded company with no PE or VC involvement.  Like the gearbox issue mentioned. We fix ouor mistakes and remember to do a better job of testing any changes.

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Awavey | 3 years ago
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I dont think it's as complex as people are making out why Mavic are in difficulty, just ask yourself you need a new set of wheels to replace an old worn out set, who do you pick ?

Mavic wasnt the first brand that popped in your head was it? Probably not even the 2nd,3rd or 4th choice...and if Mavic arent the 1st answer you thought of and more than half the people in the market to buy wheels think the same, that's the reason why theyve been struggling.

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jhsmith87 | 3 years ago
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When it came to finally upgrading the wheels that came with my bike I looked long & hard at all the options. I managed to find a set of Comete Pro Carbon SL UST for half price. Ticked all the boxes for me: wide, deep, TL & reasonably light. Love them! Here is my tribute, taken today in Llangollen just before ascending the Horseshoe pass. Hope someone sorts them out! 

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Karbon Kev | 3 years ago
2 likes

what a great shame, Mavic one of my favourite component manufacturers.

Hope someothing can be resolved, would be awful if they disappeared. The Mavic Ksyrium, an iconic wheel at the time.

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lawrencefalk | 3 years ago
2 likes

Soon you can add Mavic to the list of companies like Pan Am that had their moments in the sun but couldn't be sustained forever.

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iandusud | 3 years ago
3 likes

I liked Mavic rims when I was doing a lot of wheelbuilding back in the 80s. However the wheels they now produce are throwaway items, like many of their competitors. I won't buy such wheels any more. They are typical of the environmentally unfriendly consumerist market that, for me, goes totally against the grain of cycling. Either get wheels built by a good wheel builder who will be able to replace the rims when they wear out or buy a wheelset from a firm that will provide replacement rims, bearings etc from stock at prices that make replacement a viable option. (Mavic provide a service to replace worn out rims that involves returning the old wheel to them, you then wait forever to get it back and it costs more than a new discounted wheel). 

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TheBillder | 3 years ago
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It's a great shame if this means the end - for the employees especially. But the market is fierce and only the strong survive.
I do like the look of Mavic products, with the exception of some shoes a friend has which I thought must be own brand from Morrisons (big yellow M). But my LBS is scathing about custom parts and supply chain issues on Mavic and Fulcrum wheels, and having experienced problems with the latter brand, why would I entertain the former unless the product was far enough ahead of its competitors?
Big brands with attendant marketing budgets either need to use economy of scale to compete on price, or gain a position of trust to attract customers

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NZ Vegan Rider | 3 years ago
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I'd be saddened to see the Mavic iconic brand go.

I've had a lot of their Aksiums (totally trustworthy) and Ksyriums - mainly for training.

They were almost never my fast race wheels - I don't care about aero but I do care about lightweight and they are just too heavy now.

The peripherals - clothing, shoes, helmets are expensive and just what other brands are doing. Nothing really distinctive or groundbreaking.

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Dao | 3 years ago
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shame to see such an iconic brand fail so badly.

If I wanted to pay a tribute to Mavic, which rim-brake wheels should I buy while I still can? I have a single speed road bike I would like to put a 700x25 tire on. It runs 700x23 now but I'm not sure if I want to stay so narrow.

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Yorky-M | 3 years ago
5 likes

Innovate or die! We all loved Mavic, putting a pair of Mavic wheels onto your first bike was the sign of an upgrade. Bombproof askims, I remember starting a stage race when mavic launched the Helium wheelset, But no one finished the last stage with two red wheels. Cosmics were awesome, ONLY because we had no other choice. The alloy nipples then and now still corrode to the rim in 3 seasons. Kysseriums were fantastic, until you needed a freehub after two years. They were the best available. Now the market place is educated. Forums squeal if someone broke a spoke, regardless if they were broke by 130kg rider in a pothole. Mavic didnt respond fast enough to the market place. they hung one to Carbon Laminate (just a plastic faring) 10 years after zipp (with the worst hubs in the world)were selling full carbon rims. The did some wheels just brilliantly . Cross Max, Open4cd rims, Ma40 Kysserium Elite, but sadly, each broken cosmic ultimate, and the worst looking ghelmets and 900 quid shoes and following the trend to wider rims 4 years. FOUR years after the market had turned. The 2018 road wheelsets came with 23mm tyres. 

Mavic we will miss you in memory, we will miss the neurtal service cars but you, you began this cancer in 2008.It is over.

 

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Glov Zaroff replied to Yorky-M | 3 years ago
5 likes

Do you ever read the shite you've posted? 

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Yorky-M replied to Glov Zaroff | 3 years ago
5 likes

Jimmy Walnuts wrote:

Do you ever read the shite you've posted? 

Educate me James, pour out your wisdom. That is what the interweb is for. Put down the Daily Mail and teach me something

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Mathemagician replied to Yorky-M | 3 years ago
3 likes
mylesrants wrote:

Jimmy Walnuts wrote:

Do you ever read the shite you've posted? 

You

Educate me James, pour out your wisdom. That is what the interweb is for. Put down the Daily Mail and teach me something

Well for a start it's Ksyrium you fucking dolt.

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Hirsute replied to Mathemagician | 3 years ago
5 likes

If you (and Jimmy ) disagree then come up with a coherent argument instead of resorting to swearing.

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Mathemagician replied to Hirsute | 3 years ago
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He asked to be corrected, I corrected him. I'm sorry my language offends your delicate sensibilities.

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Hirsute replied to Mathemagician | 3 years ago
2 likes

So in order to correct him, it was necessary to swear at him?
Do you have any argument against the main points he was making ?

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Mathemagician replied to Hirsute | 3 years ago
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What arguments? It's just a load of incoherent ranting. A 130kg rider breaking a spoke and whining about it is now a valid argument? Comparing Cosmics with a carbon fairing with deep section Zipps that retailed at probably 5 times the price is a valid comparison? His opinions on the looks of a helmet is now "correct"?

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NZ Vegan Rider replied to Mathemagician | 3 years ago
4 likes

Apart from the spelling mistakes mylesrants is correct.

I don't appreciate and you don't need to swear and attempt to insult someone just because they're right and you're wrong ;-(

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froze | 3 years ago
3 likes

This is news is really sad.  I used nothing but Mavic rims back in the mid 70's through the early 90's and loved them.  This is like a vintage stable of cycling history just going down the drain.  Someone needs to step up with cycling background and buy the name, and just concentrate on making Mavic branded rims and nothing else, and drop all the other nonsense stuff.

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Carton | 3 years ago
1 like

So, hate to speak ill at what is hopefully not a wake, but the truth of the matter is that there are only so many times you can show up late before you completely miss the boat. Mavic was really late to aero, really late to full-carbon, really late to tubeless, and then finally fairly late to wider rims. They finally launched low-profile 19-mm low profile wheelsets just a few months before Enve introduced  25mm aero wheelsets (sorry, "systems"). To this day I don't think they have any 19mm or wider high profile rims. Not only that, but when they joined the party they decided they didn't want to mingle with the other folks: they wanted to make their own standards that integrated with their own tyres. 

To be fair, there is a point to that, and they were in a difficult spot regardless. The OEM industry was under pressure and, less important in terms volume but perhaps not in regards to margins, they could never go as lightweight as the exotic carbon guys, with their ridiculously low weight limits and their "they will break but we will help you fix them" approach to durability. And Shimano was also left obliviously stranded on that same island, to the point that their highest-profile sponsored team has repeatedly refused to ride their wheels at their most important races. But the fact of the matter is that they could've done things differently. DT-Swiss, for one, shows us that if you do play well with others and you eventually catch up, you can keep your focus on quality and still manage to surf the tides of the industry. 

I'm not even getting to their slapdash diversification. Partially because I'm still eyeing the Cosmic Boa SPDs (proof that they can still spot emerging customer needs). But also because I think they make a pretty good product. A single yellow spoke remains a sign of a great wheel and a perfect hub sound (sorry Chris King fans, there's such a thing as too loud). I hope they bounce back.

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Boss Hogg replied to Carton | 3 years ago
3 likes

Get your numbers right before you start ranting. I've been running 40mm deep, 19mm internal and 26mm external width Cosmic Pro Carbon Disc tubeless road wheels for over two years now. Current Cosmic Pro Disc model is 45mm deep, 19mm internal and almost 28mm external, tubeless @ 1515g. The venerable DT Swiss equivalent wheelsets are narrower, internally and externally, and heavier.

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Glov Zaroff replied to Boss Hogg | 3 years ago
0 likes

Boss Hogg wrote:

Get your numbers right before you start ranting. I've been running 40mm deep, 19mm internal and 26mm external width Cosmic Pro Carbon Disc tubeless road wheels for over two years now. Current Cosmic Pro Disc model is 45mm deep, 19mm internal and almost 28mm external, tubeless @ 1515g. The venerable DT Swiss equivalent wheelsets are narrower, internally and externally, and heavier.

At last, someone that knows what they're posting!

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Carton replied to Boss Hogg | 3 years ago
1 like

Nope, not going to look trough Mavic's entire catalog. But thanks for proving my point. As I said, Mavic wasn't quite as late to wider rims as they have been so wont to be with such things, but they were still fairly late. Again, in 2016, as Enve launched the disc-only tubeless-optimized 25mm AR 45s (deeper and well wider than your Cosmic Pro Carbon Disc, which I imagine is about as wide and as deep as Mavic still gets, but I'm not about to go out with a ruler to check, but feel free), Mavic was only getting into full carbon clinchers, breaking through with the 17mm Cosmic Pro Carbon SL C  (SL on like it's 1995, Mavic) with no disc options and no tubeless compatibility. 

And, as I said, unlike DT Swiss, who are also habitually late to the party, they don't play well with others. I mean how can you readily sell wheelsets without tyres (such groundbreaking flexibility) and even hubs so that OEM's can use their own rims (shameless, really)? Meanwhile, Mavic seems to think you can call something Universal and say abracadabra and -wow how did they do that- its now a "Standard". 

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fukawitribe replied to Carton | 3 years ago
1 like

Mavic weren't "really late" to tubeless, UST was the first tubeless system available, and their patent was nearly 20 years ago.
https://worldwide.espacenet.com/publicationDetails/biblio?CC=US&NR=62576...
TLR came later with Shimano and Hutchinson (who were in on UST as well, with Michelin)... thankfully the rather nice Hutchinson tubeless tyres used in Mavic's wheel systems shouldn't be effected by this.

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Carton replied to fukawitribe | 3 years ago
1 like

Yeah, that should've said road tubeless. Again, not knocking the engineering behind Mavic. And they work well with the standards boards behind the scenes. But they haven't worked well with other brands to make a thing actually a standard before attempting to brand it as such. It is a minor peeve, and standards are hard. 

But catching up shouldn't be quite as hard. They have been late to everything on the road lately. Either too engineering-driven or to stuck in its ways from product on down. 

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ktache | 3 years ago
1 like

I thought it was a shame when they stopped making the 26 inch XC717 rim brake rims.  They would have had me buying them forever.

I will miss Mavic, I'm hoping someone can by them and make something of them.

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