Losing millions of dollars of sales and bad press, and a shop known around the US as a Specialized shop, it seems like a very poor business decision.
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And they are fully justified if it happened the way they claimed it happened. (I have no reason to doubt it at this point, I donāt think Mikeās Bikes would cancel already paid-for-orders out of spite, thatās not in their interest. Ditto for effectively screwing many of its previous customers with Specialized bikes, if they need a part for their frame or a replacement frame, they no longer can.)
Iām surprised Specialized went with the nuclear option. Perhaps they are so big that they donāt even see what happens on the ground from their 10,000 m view. But itāll eventually come back to bite them in the rear end, at least if they measure success not by sales of entry level bikes to people who donāt know much about bikes, but higher-end bikes. I reckon the margins are much, much higher on those.
I personally donāt like to buy at brand stores, because I donāt feel like I can get honest advice. My current LBS sells many brands and they donāt care whether I order a BMC, 3T, Pinarello, as long as Iām spending money at their shop. Plus, at least here in Japan, the Trek stores donāt have a good reputation. For example, the Trek store in Fukuoka used to do group rides thatād attract some of the stronger riders in the region. A former American pro and local bike guide wanted to participate, but he wasnāt riding Trek bikes but a Cannondale 
(It was an old team bike.) After a few too many comments, he decided to not ride with them any longer.
Iām curious to know what bike brands Mikeās Bikes will pick up. Itās so unfortunate that this happened, Specialized is a local brand to me (Morgan Hill, CA) and Mikeās Bikes is a fixture in Nor Cal, really wish they didnāt cut ties.
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Forcing former Mikeās Specialized customers to go to another shop seems short-sightedā¦I get it why they are doing it (wanting to drive those customers to their new dealer and hoping to convert them), but the reality is that it is just gonna piss those established customers off and alienate them form the brand.
Agreed, I donāt think that logic is going to work in the real world. Finding a good LBS is hard, and in my experience once I find one, Iām sticking with them. If I know Specialized screwed them and me over, Iām not going to like that. Perhaps a few customers have to have one particular make and model, and if their LBS no longer sells it, ok. But most are not.
The truth is many companies make good bikes. If I couldnāt have had a 3T, I probably would have gone for a BMC or a Factor. But I would have stuck to my LBS (I am really blessed, easily the best LBS I have ever had).
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Alot of finger pointing both ways. Maybe the truth is somewhere in the middle. Itās possible Mikes violated their dealer agreement with the sale of the business? Or it doesnāt carry to new owners? Who knows. But if they lost the agreement then that explains the reason they canāt deliver on the pre-paid bikes. I assume those pre-payments were taken at the store level and no payments were made to Specialized. So when the agreement ended so did the orders as they are no longer a Specialized dealer. Makes sense to me, crappy for people who have been waiting for bikes though.
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Thatās all I can think of. You would think that, had this been the case, that Specialized wouldāve tried to make it right with the end customers.
Without any direct knowledge of this situation, yes, that is how the process works. Specialized bills the dealer after shipment to them (sometimes with dating, however, so they donāt have to pay immediately). So Mikeās probably had the cash, Specialized didnātā¦unless there was an arrangement made outside the norm to ensure bike allocation? Possible, I guess but I have never heard of such a program before.
I donāt blame Specialized for cancelling the future orders / shipmentsā¦.Mikeās was no longer a dealer and therefore not entitled to sell the bikes. If Mikeās took a customerās money in full, that is on Mikeās, not Specialized. Blaming Specialized for not delivering bikes in the future because of Mikeās down payment policy is not really an accurate portrayal of the situation.
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I was regretting switching from spec to trek, giant and salsa for my family. Now I am totally thrilled to not have spent any more with spec. I hope to never spend another $ with specialized. They had already lost a lot of my respect from the cafe roubaix bullshit up here. This is the final nail! Way to go Mikes bike for the transparency!
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I would think Mikes would get crushed by the specialized legal department if they were not being truthful. Spec is known for going after others to protect its brand. I understand not selling bikes to them but not allowing warranty is utter horseshit. Up here if this happened I would have to drive 2.5 hours to another city to get service. Very glad I cut ties with spec a year ago. Also Spec made Mikes no longer a dealer. With Covid people have to put money down on bikes for the HOPE that they will get one. Is not Mikes fault Spec pulled the rug out from under them. Good on mikes for offering full refunds off the bat!
Two things here: I donāt think it is a breach of contract, but it could be that the previous contract could automatically end. Or more likely, Specialized could (but is not obliged to) terminate the contract.
But the two parties could have agreed to continue their business relation. They just agree to a new contract. Or at least do right by existing customers and those who placed an order.
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To be fair to Specialized, itās potentially a conflict of interest for stores owned by the company that owns Cervelo, Santa Cruz, and so on to carry the products of a competitor.
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Also to be fair to them they are pursuing a long term business model and a little bit of collateral damage in inevitable really. Iām no spec fan or anything. Bit they probably donāt (canāt) really care about losing the goodwill of a small number of customers when they are pursuing a strategy. In reality this is just one shop not really much of a big deal in the global picture.
However I would be totally pissed off of I was a Mikeās bikes customer or had a spec I needed warranty on at that shop.
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Mikeās is one of the largest dealers in the country, ranked in the Too 10. They would have been one of Specializedās largest dealers (largest?)ā¦this wasnāt just some small LBS and likely a tough decision.
I donāt blame Specialized for dropping them once they sold to PONā¦.you never want to support your competitor. I just think they could have handled some aspects of it better (specifically future warranty claims)
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My mistake youāre right I didnāt realize from the thread that it was such a big franchise. Probably did make the decision more difficult but still the global strategy maybe takes precedent.
It does sound really enjoying for customers who have been affected.
Spec can certainly work on their āGLOBAL STRATEGYā. They can become another canyon for all it matters.
Fine drop mikes as a retailer but honor the warranty at mikes. Dont pull the rug out from customers. If they did it to Mikes bikes customers they will do it to the rest of their customers at some point!
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Whatās surprising to me is that the bike shops have no power with these contracts. One minute you have a good business and then the next you have nothing. It shouldnāt matter if Mikeās Bikes LLC is bought my a new entity as the contract is with Mikeās Bikes. You bike store business has little value if you canāt sell it and you canāt sell it if you canāt pass on the contracts and good will you have built up.
I wanted an SL6 and now maybe an SL7 as my next bike but Iām getting to the point that I simply refuse to pay $5500 for a frame and stem. Specialized seems to have optimized profit more than any other bike manufacturer during the pandemic and it turns me off.
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While I agree, it should be noted that Sepcialized is still honoring their warranties, just not through Mikeās. So the rug isnāt exactly getting yanked out under them, but it could be potentially more difficult for them to resolve any warranty issues. A lot will depend on who Soeciaalized opens to replace Mikeās.
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Not a specific comment on the Mikes Bikes / Specialized contract, but it is very common in contracts to have change of control provisions that allow both parties to terminate the agreement upon change of control for the other party. This is so that if your competitor purchases a company you are doing business with, you donāt have to continue to do business with your competitor and thereby provide them what could be proprietary information.
On the other hand, if you are smart, you write provisions so that key suppliers cannot terminate in case of change of control of your business, for exactly the reason in this case. That is, if a significant value of your business is dependent upon company Q, then you wouldnāt want a clause in your agreement with Company Q that allows them to terminate your agreement if you are acquired, or the value of your business would be significantly impaired - effectively you would have to run any possible change of control by company Q to make sure they wouldnāt terminate your agreement.
But my guess in this case is that PONS knew this was going to happen, and factored it into the price they paid to acquire Mikes Bikes. They might have even been counting (this is rank speculation) on Specialized to terminate the agreement in just a manner like this, so that Specialized would get bad publicity. And when Specialized bikes were replaced in Mikes Bikes by PONS brands, consumers would blame Specialized.
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X2ā¦ unfortunately when people pay these absurd prices it just fuels the fire.
9r vs 11r, carbon layups, sl7 vs sl6, 100 grams lighter, what a gimmick IMO
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