The biggest news out of the 2024 Sea Otter Classic wasn’t about a new bike launch or even a new brand, but instead a swirling rumor mill around a brand that wasn’t there: Kona Bikes. Kona employees set up a display at the Sea Otter Classic on Wednesday prior to the expo’s opening on Thursday, only to begin taking it down before the end of the day. Kona had no presence at the show despite having just launched their new Ouroboros gravel bike days before. According to sources at other brands, in order to even begin setting up, Kona had to have already paid for their spot at the expo, which is always a significant line item in a bike brand’s annual marketing budget. Kona employees were told to expect a “town hall meeting” on Thursday, according to a report from BRAIN.
Kona has been building mountain bikes since 1988, and many of their classic bikes pioneered the bleeding edge of technological advancement in freeride and full suspension technology, while simultaneously embracing a middle-finger-up punk rock ethos. This combination of forward-thinking technology and anti-establishmentarianism earned the brand a cult following for many years.
During the short-lived bike boom following the COVID pandemic, Kona was one of many brands that sold to private equity firms—in their case, to Kent Outdoors in early 2022. The bike boom proved to be a short-lived spike of sales that the industry was unprepared for, which caused almost every single brand to subsequently over-order merchandise that they then have been unable to sell, leading to steep discounts.
In December, Kona announced perhaps the most shocking discount of all—a buy one get one free deal on their Process trail bike. Singletracks had never heard of a BOGO mountain bike deal before or since, which indicated that Kona was massively overstocked while simultaneously experiencing an immense cash flow issue.
Every brand has been dealing with the same economic realities, and while most brands are still managing to survive, others have closed their doors. Colorado-based Guerrilla Gravity closed up shop in late 2023, with an anonymous source claiming that the closure was primarily due to angel investor(s) who decided to pull out and shut the company down. Other bike brands in financial straits include Nukeproof, Vitus, and Ragley, who have been caught up in the receivership and sale of their parent company, Wiggle CRC, which also owns Wiggle.com and Chain Reaction Cycles. The latest reports indicate that the in-house brands will be sold to Fraser Group along with Wiggle CRC, but the future of these brands remains unclear. For a short time, it seemed that Orange Bikes might meet the same fate, but a sale to Ashley Ball has allowed the brand to continue forward.
This is far from an exhaustive analysis of all of the brands facing dire financial straits in the current economic climate, but it does provide context to Kona’s current predicament. However, Kona is by far the largest of the bike manufacturers facing a potential demise… but all hope is not yet lost.
On the heels of Kona’s withdrawal from Sea Otter, Kent Outdoors published a press release announcing a $100 million line of credit from asset-based lender Eclipse Business Capital. As a part of this capital infusion, Lee Belitsky joined Kent as the Executive Chairman, and they also appointed Rob Otto as Chief Financial Officer. This leadership upheaval indicates a dramatic change of course for the company, and a big part of this change is an increased effort to sell Kona Bikes.
Kona is just a small part of the Kent Outdoors portfolio and only received a brief mention at the end of the release:
“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. 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.”
The corporate-speak of a press release intended to foster confidence in the company clashes harshly with an anonymous comment posted to an article on BikeRumor.com. The commentator claims to be a current employee at Kona and that under the Kent Outdoors management, Kona has accumulated millions of dollars of debts to their suppliers and has no intention of paying those debts. The writer goes on to talk about the “abysmal” working conditions at Kona, management decisions they disagree with, and more.
Purported Kona dealers have chimed in on the comment thread to support and affirm the claims made by this anonymous commentator, lending credibility to the assertions.
Singletracks has reached out to Kona, but no one has been willing to comment on the record due to contractual obligations. Commenting to the press or publishing a blog post, for example, could subject current or former employees to legal action from the company.
At this time, we unfortunately do not know what the fate of Kona Bikes and Kona’s many loyal employees will be. We wish them all the very best outcome in these incredibly trying circumstances.
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