Over the last couple of weeks you might have noticed, like I did, that Specialized and Mavic have got their corporate chequebooks out and bought some more speed.
It amused me as it’s what us punters talk about doing – credit card speed but as well as giving me a bit of a chuckle, I think there are some interesting angles on both of these transactions. But please note, this post is pure opinion, so keep that in mind as I share some of my thoughts.
Firstly, Specialized. At a simplistic level Specialized is one of the giants of the bike industry, they’re a big ambitious and aggressive company. They also have a pretty intense rivalry with another giant of the marketplace: Trek, and one of their most recent battlegrounds has been in aero.
You may have noticed that both companies put in a big push in engineering for their flagship aero road platforms: the Venge for the big S and the new Madone 9 series for Trek. I’ve not tried either bike but in talking to people in the trade and reading the press, my impression is that Trek might well have won that battle…. just
Bontrager (Trek’s component brand) have also forged a strong reputation for their Aeolus aero wheel range, which has recently been updated. Specialized have Roval but I’ve personally never seen an article or a review which has suggested that they’re near the cutting edge of performance. In fact Roval always seemed an odd acquisition to me but that’s another blog post.
So it made a lot sense to me when I read that Specialized have licenced some of HED’s rim technology. In fairness it looks like it stems from the new Roval wheels for the Venge being very close to HED’s patent.
I think deal/solution is a smart & pragmatic move that is good for both companies. Specialized needs a bit of step change in its aero wheel line and this should help shortcut the path to new and faster wheels that at the very least put it back on par with some of the leading brands.
It also makes perfect sense for HED. Since the untimely death of Steve Hed back in 2014, I’ve wondered where that would leave the company in terms of new designs. Steve was acknowledged as a pioneering engineer whose designs helped create the aero wheel market we have today. With him sadly not around, it probably makes perfect business sense for the remaining HED shareholders to see some of their patents and designs licensed to bring more money into the business. At the least it gives them some time and funding to invest in new designs themselves. It also sets a precedent that if Specialized got very close to one of it’s patents and have paid up to use it, that other brands might do this too.
As I said, I think it’s a smart move that I hope will also lead to new products in time. I wouldn’t be at all surprised if Specialized had also discussed an option to buy HED outright at some point in the future. HED could fit very well in the Specialized business.
In some respects the announcement that Mavic have acquired Enve is a similar situation. Anyone who’s been talking about wheels over the last few years has watched and wondered why Mavic have seemingly sat on their hands and watched other brands eat their lunch in the performance aero market.
Part of the reason is that Mavic’s existing wheel range has a good reputation and sells extremely well. If it’s not broken, don’t fix it or something like that. Mavic’s v-shaped Cosmic rims are tough, ride well and are fast if there isn’t a lot of sidewinds. I’ve owned a pair and it’s still one of my most read reviews. I enjoyed owning them but even then the game was moving on…. but Mavic never really did. I see Mavic as an old school road cycling brand and it almost felt like they thought the aero thing would blow over. It didn’t though and as time went on Mavic wheels have fallen off the shortlist of anyone wanting the very best aero performance.
So how could they fix that? They certainly have the wherewithal to invest in R&D (frankly they could have hired Simon Smart as ENVE did), hire new engineers and develop a cutting edge line of new Mavic aero wheels. Instead they decided to buy ENVE outright as a specialist high end supplier. I think this is a really smart move for a number of reasons. Firstly, as I mentioned the Mavic wheel line is well defined, known and respected. It also sells very well. Mavic are a major global business with a huge dealer network and buying ENVE gives Mavic, their reps and dealers a new high-end brand to sell. So Mavic can take what ENVE have achieved and scale those sales globally. I think the folks at the ENVE factories are going to have to make a bunch more product probably pretty quickly as Mavic scale up ENVE sales around the world.
I also think it’s a smart move as it enables Mavic to turn ENVE into their Lexus, the high end, premium companion brand that they can trickle down tech into the Mavic range as the choose too. It’s my opinion that this is just as much at the heart of why they just spent $50m on ENVE.
A final reason this deal is a good thing for Mavic as it brings a lot of carbon fibre expertise directly into the Mavic family. Mavic have always been strong with aluminium but not so convincing with carbon – this should change that.
It’s been an interesting couple of weeks – I hope you’ve found this interesting. Please feel free to leave comments if you wish to.
Some more information on the Specialized deal with HED can be found here:
Here’s more info on Mavic’s acquisition of ENVE: http://www.bicycleretailer.com/international/2016/02/22/mavics-owner-amer-sports-buys-enve-composites-50-million#.VtdOVVuLQdU
Thanks for reading