Trek Bicycle plans to 'right-size' and cut expenses by 10 per cent

Trek Bicycle president John Burke has announced that Trek plans to "right-size" its business by 10 per cent due to declining sales and high inventory levels, but stressed that the company's overall strategy remains unchanged.


Global Market WeaknessThe global electric two-wheeled market has been slowing down since 2023, with retail sales of complete bicycles weak and inventories always high. The unstable economic situation, reduced consumer willingness to buy, and intensified competition in the market have put a lot of Ebike manufacturers under pressure, and many of them began to make adjustments to their businesses or lay off employees last year to reduce expenditures. Vista Outdoor, HLC, Rad Power, REI, Zwift, QBP, The Pro's Closet and Signa Sports United (owners of WiggleCRC and others), Shimano's sales were down 30 per cent last year, and on top of that they have suffered costs associated with a major crank recall. costs associated with a major crank recall, and a business facing bankruptcy and a restructuring crisis.


Trek plans to cut spendingJohn Burke said that "the current global bike market is in "disarray" with high stock levels at both wholesale and retail levels leading to "significant and sustained" discounting", so in addition to the 10 per cent cut, Shimano has also cut its sales by 30 per cent last year. "As a result, in addition to the 10 per cent cut in spending, Trek plans to significantly reduce its stock keeping units (SKUs) for the 2026 model year by 40 per cent compared to the 2024 model year. Burke noted that Trek has missed its monthly sales goals for the past 15 months. Faced with this situation, he chose to scale the company's operations to market realities, reducing overall spending by 10 per cent through program cuts and layoffs, and announcing execution details by Friday. Meanwhile, in response to the inventory burden imposed by different product lines and models, Trek said it will streamline its product lines and reduce inventory levels, which are expected to be 20 per cent lower for 2026 models than they were before the bike boom, as measured by days of inventory.


BRAIN spoke to some of the professionals at the Taipei Cycle Show about Trek's restructuring, and here's what some of them had to say about it. Steve Fenton, owner of Pro-Lite Manufacturing, said of the restructuring, "I think it's the right thing to do. I was in charge I would do it on a much larger scale my view is that all the big brands have to do it." Burke's view of the disarray in the global cycling market resonates with industry insider Fenton, who points out that "the industry is run by enthusiasts, not businessmen, and there are too many followers and not enough leaders. The industry must face up to reality and put in the effort to fix the problem." One industry supplier said "Trek is not alone in this situation and other brands will be taking steps to address the problem. Many have been put at risk by over-investment and are trying to minimise the likelihood of risk occurring through more conservative portfolios." Another supplier said that the industry is currently in a reshuffling phase, that the slowdown in the market is a long-term state, and that promotional discounts are not doing much to drive sales. We will eventually believe that the industry's trough will soon be over and spring will come soon.


-Gravity Ebikes 


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