Note: This story has been updated with comments from Carytown Bicycle Co. received after publication.
In response to a shifting industry, a longtime local bike shop chain is under new ownership.
Carytown Bicycle Co. has been sold to California-based Specialized Bicycle Components for an undisclosed amount.
The deal closed Feb. 11, CBC co-founder John Hessian confirmed. The local chain’s name and branding are being retained.
Specialized is a giant in the cycling industry, offering bikes, parts and other accessories since 1974. CBC had been a dealer of Specialized goods prior to the sale.
Hessian, who co-founded CBC with Tim Mullins and Jesse Leadbetter, said they were not looking to sell the business but saw Specialized’s offer as a win-win.
“It was a difficult decision to sell the shops after 15 years. Most importantly we had to be 100 percent sure it would be a great opportunity for our staff to grow and that our customers would continue to get great service,” Hessian said in an email.
Despite being owned by Specialized, CBC will continue to carry some other brands’ bikes.
“We still currently sell Yeti, Otso, Gunnar, Allied and some other small batch brands,” Leadbetter said. “We will still carry on with our own branded merch as well.”
Mullins and Leadbetter are remaining with the company while retirement looms for Hessian, who said he’s grateful to the local cycling community who helped CBC get this far.
“Richmond is a special place for cycling and we hope the next 15 are just as good for both CBC and Richmond,” Hessian said.
Leadbetter said the sale brings with it a bittersweet feeling.
“Overall it may be a different name on the check so to speak, but inside these doors it’s the same staff and feel Richmond knows. We are still very much Carytown Bikes,” he said.
Specialized did not respond to multiple calls and emails sent seeking comment.
Specialized has been acquiring independent shops all over the globe. In the last year, the brand has reportedly purchased bike shops of sizes similar to CBC in Michigan, Indianapolis and California, as well as internationally in Australia.
Its acquisition spree is part of an ongoing turf battle with two of its biggest competitors: Holland-based Pon Holdings, which owns bike brands like Schwinn, Cannondale and Cervélo; and Wisconsin-based Trek Bicycle Corp. Both companies have similarly been buying independent bike shops.
Other bike shop owners have taken notice of the apparent arms race.
Braden Govoni, who co-founded CBC with Mullins, Hessian and Leadbetter before leaving in 2015 to start his own shop, Outpost Richmond in Forest Hill, said he thinks this latest deal was spurred in part by Pon buying a chain of shops in Specialized’s home state of California.
“The key thing is (Specialized was) basically getting strong-armed out of certain key markets, and they started, as a response, to buy two-to-five-store chains in mid-size markets where they feel most at risk of losing their footprint,” Govoni said.
“Specialized sees (the CBC deal) as, ‘This is a three-store chain that sells our bikes. If we can buy these guys out, then we don’t have to worry about Trek buying them out or competing for floorspace with these other guys.’”
He said this race between Specialized, Trek and Pon has accelerated rapidly since it began about a year ago.
“These brands are essentially really aggressively competing with one another for floorspace in dealers. It’s just fallout from that,” Govoni said. “I think it is kind of the future of the industry. It makes a lot of sense for those big brands.”
The fast-paced retail expansion is also made possible by the boom that bike shops have been in since the pandemic started, during which popularity for the sport exploded.
“Everyone happens to have a lot of money right now because the last two years have been so good to the bike industry. All these companies are relatively flush,” Govoni said. “They have lots of cash in the bank and have an opportunity to do these things.”
That boom has been felt by Outpost as well, albeit differently. Instead of going out and buying other shops, Govoni said he’s been reinvesting the extra money Outpost has been making into the shop with things like a walk-in refrigerator for its in-store market and expanding its inventory.
When CBC and Specialized closed their deal, it left accounts for bike brands that CBC had been carrying, such as Pon’s Cervélo, on the table.
“It’s worked out great for us. I immediately reached out to a Cervélo (sales) rep. I said, ‘You’re about to lose three dealers (in CBC). We’re just one store but, if you want to sell us gravel bikes and endurance road bikes, I’ve got a need for that,” Govoni said.
While Govoni’s not selling as many bikes to new customers as he was at the height of the pandemic boom — “The wave from a sales standpoint has absolutely crested at this point,” he said — those new customers are still coming back to the shop.
“A lot of those people are still here. They’re still going on bike rides, still getting their bikes serviced and still buying parts and accessories and doing what bike riders do, which has been really cool to see,” Govoni said.