With this massive fire sale and the news on the front page about a sale of the company is this correct to assume?
Was it the underestimated costs of running a pro team or the flop that the P4 was that brought them down?
I guess we will see Cervelo’s in the Walmart sporting goods section beside the Raleigh’s
Bankrupt? Not even close. Cervelo’s at Walmart? Even further from the truth
So naive you are.
Makes every bit of since.
Wouldn’t surprise me if it’s true.
and they are up for sale because…?
and they are having a massive fire sale like they never have before because…?
Are these things that profitable companies that are doing well do? No wonder the economy is circling the drain
Thank you for providing more facts and thoughtful insight into the Cervelo situation. The other threads were a little lacking in fact and commentary from those with actual knowledge of the situation, and this one really fills that void.
http://www.manta.com/ic/mt6lcgd/ca/cervelo-cycles-inc
Cervelo Cycles Inc is a private company categorized under Bicycles Manufacturers and located in Toronto, ON, Canada. Our records show it was established in 1995 and incorporated in . Current estimates show this company has an annual revenue of $3,399,200 and employs a staff of approximately 20. Companies like Cervelo Cycles Inc usually offer: Cycling Parts And Accessories, Giant Bikes, Cervelo Bikes, Fuji Bikes and Bicycles.
An annual revenue of 3.3 million is not that big when you are a company on the world scene
Notice how they only have 20 employees. They are not even a bike company. They don’t build bikes, paint bikes, assemble bikes, ship bikes etc… all they do is design the bikes and contract out all the work.
With 20 employees (who I assume are engineers/designers, marketing) a low average staff would be 75k. Now multiply that by 20 and they are at 1.5 million in HR cost alone with no office/operating overhead.
How much do you think a pro team costs? with guys like David Zabriskie, Tyler Farrar, David Millar, Christian Vande Velde and Ryder Hesjedal just to cover saleries
Sorry, I forgot that Slowtwitch is also the ‘Cervelo Love forum’
.
This figure does not make sense. If you go by a low average sale price to dealers of $2000 per bike, that means they sold 1700 bikes. I would assume a much higher number than that. Heck, I have 2 Cervelos myself, both purchased sat year.
That is not a total sales figure.
If you make 2.01 billion in sales but your operating costs are 2 billion then your revenue is 0.01 bill
What I was pointing out was for a company on the global market that that is really not a healthy margin.
With a name like ‘cervelo-van’ it is obvious you are in denial
Elite racers already knew that Cervélo bikes led the industry in terms of technology and engineering, but the company lacked the messaging to convey that value on a wider scale. To broaden Cervélo’s reach, Continuum developed a cohesive visual language inspired by the forms of the bikes themselves. Eye-catching visuals combined with simple educational tools communicate the brand’s strength amidst chaotic, mass-market retail environments.
Continuum created an attention-grabbing tradeshow installation to generate new buzz about the brand, and then transformed the elements of the installation into a clear and memorable display case adaptable to any store. A series of masts uses a vivid color palette to reinforce the bikes’ power, while physically lifting Cervélo bikes above the rest and making them easer for customers to examine. Floor graphics – modeled after chalk designs fans leave on the roads of the Tour De France – form an island effect around each mast to further illustrate Cervélo’s market leadership.
These new displays have become key tools in differentiating the Cervélo brand. The numbers speak for themselves: While before Continuum’s partnership Cervélo saw annual sales between $6-8 million, sales skyrocketed to $28 million in the year following the reengineering of the brand.
Ahem, if you have x in revenue and y in operating costs, then z (Profit) is X-Y
Since this figure you quoted stated revenue, that’s a figure that indicates money before costs.
Yes, I am a huge Cervelo fan, I have purchased 7 Cervelos in the last years. I also had a Kuota KOM for a short while, did not like it.
Never mind what the pros ride, what does the Kona bike count say.
Just to be clear, at no point have I said they don’t put out a quality product. But they are a niche player at the high end of the market and are affected by a downturn in bicycle sale more than a company like Trek or Giant which sells bikes at every price point and multiple lines of bikes, road, mountain, downhill, triathlon, urban, commuting. Cervelo has only 2 high end lines road or tri/TT
I am just saying these 2 events at the same time?
Huge Fire sale + Putting company up for sale = financial trouble
Is what I conclude, this is my opinion
http://www.bicycleretailer.com/news/newsDetail/6310.html
Dutch conglomerate Pon, which recently bought Derby Cycle, has agreed to ‘a financing arrangement’ with Cervélo and has retained an exclusive option to purchase the Canadian company.
To me this says Pon has bailed out Cervelo and they will complete the sale once Cervelo dumps all the old stock and becomes a more liquid with assets.
If my interpretation is wrong please let me know how you interpret this?
If my interpretation is wrong please let me know how you interpret this?
No idea how close to bankruptcy they really are but no doubt they would be sooner or later unless they can more closely match the investments that the competition are making. Both Trek and Specialized have pockets which are an order of magnitude deeper. It is reassuring to see that Cervelo realises this and are taking action.
That is not a total sales figure.
If you make 2.01 billion in sales but your operating costs are 2 billion then your revenue is 0.01 bill
That is quite the keen sense of business you have.
Revenue = sales + other incomes
Profit = revenue - costs
The company data someone presented above is certainly very old. Cervelo’s revenues are more likely in the $10 to $15m range, with 30-50 employees in Canada and California.
Cervelo may or may not be in trouble. Since it is a privately held company we don’t get to know all the details.
But it is sending some very strange signals with this big sale.
I suspect one of two reasons:
EDIT : a quick Google suggest they are in the process of being bought by the Dutch cycling company PON.
http://inrng.com/2011/12/pon-cervelo/
Good-bye Cervelo - we’ll miss you.
Good-bye Cervelo - we’ll miss you.
According to this, they aren’t going anywhere:
http://www.cyclingnews.com/news/cervelo-reassures-doubters-on-possible-company-sale
“Cervélo will continue to be based in Toronto, with the same team of people, with the same desire to engineer the best bikes on the planet. It will stand by old products and create exciting new ones, starting with the new P5 which will be launched next month.”
http://www.manta.com/...a/cervelo-cycles-inc
Cervelo Cycles Inc is a private company categorized under Bicycles Manufacturers and located in Toronto, ON, Canada. Our records show it was established in 1995 and incorporated in . Current estimates show this company has an annual revenue of $3,399,200 and employs a staff of approximately 20. Companies like Cervelo Cycles Inc usually offer: Cycling Parts And Accessories, Giant Bikes, Cervelo Bikes, Fuji Bikes and Bicycles.
An annual revenue of 3.3 million is not that big when you are a company on the world scene
Notice how they only have 20 employees. They are not even a bike company. They don’t build bikes, paint bikes, assemble bikes, ship bikes etc… all they do is design the bikes and contract out all the work.
With 20 employees (who I assume are engineers/designers, marketing) a low average staff would be 75k. Now multiply that by 20 and they are at 1.5 million in HR cost alone with no office/operating overhead.
How much do you think a pro team costs? with guys like David Zabriskie, Tyler Farrar, David Millar, Christian Vande Velde and Ryder Hesjedal just to cover saleries
20 employees?!
That seems so low it’s like a joke for a company sponsoring a world-class pro cycling team. That’s more people on the cycling team than there is working for the company itself.
My thought is that when PON was in the process of buying them, it asked Cervelo to raise their cash reserves (for one reason or another) or lower their inventory (going to a more lean business model). Most likely this sale is simply related to the business deal with PON, nothing more.
Also that “revenue” figure seems EXTREMELY low. Especially considering how many bikes of theirs I see on the road. And the 20 employees, doesn’t seem right at all. I know many people who have worked/currently work for Cervelo, and I’m not even affiliated with them. Their office is a decent size - much larger than one I would expect for 20 employees.
Edit: With PON’s purchase it makes a Cervelo bankruptcy ridiculous. Why would a holding company buy a corporation if it was doomed to go bankrupt? That is like throwing the money in the garbage and burning it.
No, when company’s like Cervelo are on the verge of bankruptcy, but have a viable product, is when the vultures jump in.
One thing is for certain: Cervelo needs help with its messaging and pr. I am in this business and can assure you that what has been said in this thread - cervelo’s elite customer pool - is a threat to the company and should be responded to immediately. If cervelo were my client, and it is not, I would get ahead of this rumor ASAP.