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Stages Cycling, once a cornerstone of the cycling industry, has faced a series of significant setbacks that have culminated in mass layoffs and a seemingly imminent cessation of operations. The brand was known for its pioneering approach to power meters and a successful range of indoor bikes, but recent challenges have pushed it to the brink. Let's dive into the factors that led to this unfortunate turn of events and explore what might happen next.

Stages Cycling

The Early Success of Stages Cycling

Founded as a single brand under the Foundation Fitness umbrella, Stages Cycling quickly grew into a standalone powerhouse in the cycling industry. The company made waves by introducing the single-sided power meter in 2012, making advanced cycling technology more accessible to a broader audience. Its recognition skyrocketed as the brand won multiple Grand Tours and World Time Trial Championships with Team Sky, solidifying its position as a household name.

Stages' success was built on several pillars: affordability, customer service, and a focus on Shimano cranks. However, these strengths eventually became potential points of vulnerability. Despite its strong reputation, the company's reliance on Shimano cranks and health clubs left it exposed to broader industry shifts.

The Impact of the Pandemic

The COVID-19 pandemic dealt a significant blow to Stages Cycling's business model. Health clubs, a crucial revenue stream for the company's indoor bikes, were forced to shut down due to safety concerns. This sudden loss of demand hit the company hard, leading to cash flow issues that spiraled into broader supply chain problems.

Moreover, the pandemic-induced disruption of global supply chains meant that Shimano cranks—the backbone of Stages' power meters—were suddenly in short supply. The scarcity of microprocessor chips, essential for the company's products, further compounded the issue. Stages found itself unable to meet the increased demand during the COVID-induced cycling boom because it lacked the necessary components to produce its products.

Cash Flow Issues and Failed Deals

These supply difficulties led to significant cash flow problems. Stages Cycling couldn't sell what it didn't have, leading to a vicious cycle of financial instability. Rising shipping costs and extended lead times added to the strain, making it nearly impossible for the company to maintain operations as usual.

In an attempt to stabilize, Stages pursued a 32.5% minority stake acquisition by Giant, reportedly valued at US$20 million. However, by May 2023, the deal had fallen through, leaving Stages without the much-needed cash injection. This setback, combined with the ongoing cash flow issues, set the stage for the company's recent turmoil.

The Current State of Stages Cycling

Sources close to the company have indicated that Stages laid off all its staff last week and has ceased taking orders from suppliers. The company's website shows most products as unavailable, suggesting that operations have ground to a halt. While bankruptcy seems likely, the fate of Stages' intellectual property and brand remains uncertain.

Despite these challenges, it's unlikely that the Stages name will disappear entirely. The company's strong brand and established position in both the indoor and outdoor cycling markets make it an attractive target for potential buyers. However, the power meter market is far more competitive than it was a decade ago, with more players offering similar technology at lower prices. This increased competition may push potential buyers to focus on the indoor space, where Stages has a significant presence.

What Comes Next?

As Stages Cycling faces the possibility of bankruptcy, industry insiders are left wondering what the future holds. The indoor fitness industry is still recovering from its own pandemic-related disruptions, which may affect demand for Stages' indoor bikes and related products. While there is potential for recovery, it's uncertain how long it will take for the market to stabilize and for new buyers to emerge.

One thing is clear: Stages Cycling's journey is a cautionary tale for the cycling industry. It highlights the need for companies to diversify revenue streams, manage supply chain risks, and adapt to changing market conditions. As the dust settles, the cycling community will be watching closely to see how the story of Stages Cycling unfolds.


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