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 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.
