Pedaling to Profit
Forget Lance Armstrong. There are plenty of other Americans in Paris today.
U.S.-made bicycles and parts, shunned by most competitors in the Tour de France until a few years ago, are growing in popularity with the 100-year-old race’s cyclists.
There were American frames, handlebars, pedals and other components on the bikes piloted not only by Armstrong and his U.S. Postal Service team but by other teams whose riders and corporate sponsors were mostly from Europe.
Equipment makers say Armstrong’s success, and their gains in developing the latest in durable yet light equipment, are making the difference.
As Armstrong kept winning the 2,082-mile race with U.S.-built gear, “a lot of people woke up to that and were willing to search for products beyond borders to try to catch up,” said John Burke, chief executive of Trek Bicycle Corp. of Waterloo, Wis., which makes Armstrong’s bike frames.
American bikes used to be extraordinary sights on the flat runs through Bordeaux and Brittany and the crushing climbs in the Alps. American Greg LeMond -- who won the race in 1986, 1989 and 1990 -- was astride French- and Italian-made models. Then, in 1997, Cannondale Bicycle Corp. of Bethel, Conn., persuaded the team sponsored by Saeco International Group, an Italian maker of coffee machines, to ride its latest lightweight bikes. “The spot was open and we aggressively pursued them,” said Cannondale spokesman Tom Armstrong, who isn’t related to the racer.
“Cannondale broke the ground,” said Michael Gamstetter, editor of Bicycle Retailer and Industry News, a trade publication based in Laguna Hills.
Armstrong won in 1999 on bikes from Trek, now considered the largest U.S. player in the racing business, with annual sales of more than $400 million.
Armstrong went on to win the next three years in a row. That prompted other U.S. makers of fancy gear to muscle their way into the three-week race.
The Armstrong phenomenon also has sparked an upswing in U.S. retail sales of the highest-end bikes, known as road bikes, and related parts made by Trek and others. Although road bikes cost $700 to $6,000, their share of the U.S. market has climbed to 6% or more from 3% in the late 1990s, estimates Bicycle Retailer.
Every summer, the Tour de France “drives traffic into the stores,” said Jay Wolff, general manager of Helen’s Cycles, a six-store dealership based in Santa Monica.
Road bikes are a bright spot in an otherwise lackluster U.S. bicycle market, in which sales have been flat for years. Last year they totaled about 15.4 million units, roughly the same as a decade ago, with a market value of $2.3 billion, according to Bicycle Retailer. The parts business is estimated to generate $2 billion or more in additional sales.
One of Trek’s main rivals in the market for upscale racing bikes is Cannondale.
“Due in large measure to Lance’s wonderful effort, the U.S. has become so much more aware of the Tour de France, which pays huge dividends for us,” said Cannondale’s Armstrong.
These days, for manufacturers of top-end equipment, “until you’re in the Tour, people don’t take you seriously,” said Richard Bryne, founder and CEO of Speedplay Inc., a San Diego maker of pedals that was in its second Tour de France this year.
Trek and most other suppliers donate their equipment to the Tour teams, expecting to recoup the investment from future sales, Burke said. And with Armstrong’s success, “what started out as a promotional opportunity has ended up as a significant arm of our research and development” of new racing bikes, he added.
Another California company, Redwood City’s Ritchey Design Inc., which makes handlebars, wheels and other parts, sold or donated gear to four teams this year, including those sponsored by Gerolsteiner Brunnen, a German drinking-water company, and Jean Delatour, a French jewelry company.
Speedplay’s pedals were on the CSC team’s bikes, which perhaps exemplify the expanding U.S. role in the Tour more than any others.
Team CSC is named for its main sponsor, Computer Sciences Corp., an El Segundo-based computer services concern, and its most notable American cyclist is Tyler Hamilton -- who last week, riding with a broken collarbone, won a stage in the Tour de France, his first such victory.
Ritchey couldn’t have bought that kind of publicity. “To develop your brand in that marketplace is a big deal,” said Tom Ritchey, the company’s founder and chief executive.
One team’s choices can spread a lot of glory: The CSC riders were on bikes whose frames were made by Cervelo Cycles Inc., a Canadian company making its first Tour appearance. In addition to the Speedplay pedals, the handlebar was from sporting-goods manufacturer Easton Sports Inc. in Van Nuys, the wheels from Zipp Speed Weaponry of Indianapolis and the crankset from Full Speed Ahead (known as FSA among bike enthusiasts) of Woodinville, Wash.
The exposure of being in the Tour can boost sales not only in the United States but also in Europe, a market Americans are eager to tap. “Remember, watching the Tour de France in Europe is like watching the Super Bowl for 21 nights in a row,” said Trek’s Burke. “When you see Trek plastered all over the scene, it does a lot for your brand awareness -- in a hurry.”
