CGI to sell VeloGear
Written by: Dan Empfield
Date: Tue Oct 14 2008
Insiders report that sales are steady at $1.5 million, down from $2.2 million at its peak. VeloGear's salad days were during the cycling world's love affair with Lance Armstrong (which may again flourish).
One person inside CGI to whom Slowtwitch spoke said that VeloGear was no longer a good fit for what is now a hard-charging media and event group. One might think that VeloGear, with a well-oiled online storefront and a staff of full and part timers that numbers five, would be a nice acquisition by an existing ecommerce site. But there are hurdles, most notably the duplication of resources. Why would a Competitive Cyclist, or a BikeTiresDirect, want another warehouse, another set of shippers, another website, another set of buyers?
On the other hand, there is VeloGear's customer base of 200,000, about 90 percent of whom are cyclists, not triathletes. This might be a very attractive adjunct to a site selling primarily to triathletes, but that wishes to expand to the road cycling market. Trisports.com, Nytro, All3Sports, and R&A Cycles come to mind.
On the other hand, a brick and mortar cycling specialist that wants an ecommerce presence makes sense. Such a candidate would need an online storefront, and a shipping department. Why not a strong Colorado-based bike shop like Wheat Ridge Cyclery?
Maybe the fittest candidate is a cyclist or triathlete who's gotten his fill of corporate America; who can make his passion buy and step into an existing business with room to grow in any direction?
CGI will hold an "auction" for VeloGear, open to all qualified comers, which it hopes to conclude by the end of December.
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