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Ahhhh, **** it. Just ordered a road helmet.
You can see how much PX we’re affected by Brexit. Couple that with Vitus, Genesis and Ribble all starting to do similar things but with less reputational baggage alongside the period where there was no C2W for PX, all led to a decreasing market share in which their primary attractor now MUST be price. When parts became scarce, this must have further limited their ability to compete on price meaning either a further reduction in market share or a need to buy in greater bulk to get better savings. Death by a thousand cuts.
I really hope they stay. I’ve had great bikes and service from PX.
The road.cc article suggests there have been 13 recent redundancies. How many employees were there and how exactly does that work in an employee-owned company.
"What are you wearing in the bag?
What is the rating of your sleeping mat?
Do you eat before sleep?"
Base layer type stuff. Sleeping mats have been thick thermarest-style ones for years. I'm always eating! 😉
Bikes and frames only have a very short potential lifespan, with built-in obslescence and potentially being out-of date by the time they launch
What?
Bikes and frames only have a very short potential lifespan, with built-in obslescence and potentially being out-of date by the time they launch
What?
See 'plus bikes' for an example of where a bike could be out of date by the time you launch it if you were not in the market at the start.
The Turner Enduro bike that came out in 27.5 after years of wait another good example.
See ‘plus bikes’ for an example of where a bike could be out of date by the time you launch it if you were not in the market at the start.
Ah right, you mean 'fashionable' rather than genuine obsolescence or shelf lives.
Not really the same thing is it?
(that said I thought plus bikes were still a thing since fat bikes went out of fashion, shows what I know)
Every expensive 26 inch bike or part ever is a good example tbh.
Today’s news is tomorrow’s fish and chip papers.
Cycle manufacturers marketing to keep us buying new bikes makes sure that ‘obsolescence’ is built in by design.
Yeah, sorry, by frames having a short lifespan I meant as a saleable product in the market. If you launch a frame/bike around one set of standards, but the big players shift the market so the design standards make it look outdated then it'll struggle to sell. Particularly asno one knows how long any particular standard will last. See 20mm axles, boost, super boost, Myriad BB sizes etc. Any of those change then your entire development and stock is worthless, or at least substantially devalued.
^^^
But still not as daft as speccing a press-fit BB into any frame ever, though.
For clarity as it appears people generally don't understand an "employee owned company" is not owned by the employees but owned on the "current employees" behalf by the trust. Its basically run by a board of directors like any company. Once you leave the business you are no longer an employee and no longer part of the trust benefits, you don't leave with shares. In most cases it makes naff all difference to the actually employees but gives a fuzzy feeling to the government and business owners when they sell up as it sounds better than bought by an overseas competitor, offshored and gutted for assets (grumpy mode off).
There may be some incentives/bonuses/ability for employees to have a say but this is exactly the same for a normal company, you may get nothing as an employee of an EOT. Its a variation of a management buyout but not done by the management.
The reason they exist is an easy way for the original owner to sell up tax efficiently. Basically the trust raises money either through loans from banks or usually just by the original owner selling the company to them with an IOU loan. This way the trust doesn't need to find any cash so the transaction can just happen easily and quickly, and the original owner gets payed back over the years from the profits of the company till the loan is settled. In times where getting someone to stump up £10 million in cash right now it is a nice exit plan for owners.
Where people are saying the trust has paid out millions to its employees, it hasn't. I strongly suspect the majority of this is paying back the loan from the sale of the business to the original owner as agreed with them.
obviously Ive not seen the documents of this particular transaction but this is a generalization of how it normally happens.
I hope this is interesting to you all and helps you understand the situation better
Neil (SuperstarComponents)
Thanks Neil.
OK, that's Planet X on my shit list, ironic after me singing the praises of their bikes earlier.
Titus Mutsu, 3.5 years old, discovered a crack leading from the edge of cable port at top of downtube. Clearly manufacturing issue. Won't be warrantied as apparently only two year warranty on Titus titanium frames at time of purchase, although it's now a lifetime warranty which was introduced sometime after I bought mine, apparently.
Who can weld titanium? And is it really worth it? Confidence totally gone in this frame now.
That's a bummer, eh?
I'd never heard of a "Titus Mutsu", but I assume it was one of their many, many titanium frames that all seemed suspiciously similar.
The reason they exist is an easy way for the original owner to sell up tax efficiently.
Why is an employee buyout any more tax efficient for the seller than any other kind of share sale?
gives a fuzzy feeling to the government and business owners when they sell up as it sounds better than bought by an overseas competitor, offshored and gutted for assets (grumpy mode off).
It IS better than selling the company to someone that will offshore it and strip the assets (if any), at least from the perspective of the worker.
If the old owner gets paid by earn-out over time, then that shows they've got confidence in the long term viability of the business - because if it fails, they won't get paid!
That’s a bummer, eh?
I’d never heard of a “Titus Mutsu”, but I assume it was one of their many, many titanium frames that all seemed suspiciously similar.
Yup. Bloody perfect frame for what I used it for too. Other than the Sonder Broken Road (which the Mutsu appeared to be a very close copy of...) I'm not aware of anything better suited for me.
RIP:
Looks awesome, hope you can get it fixed (or just put a sticker over the crack and forget about it).
Why is an employee buyout any more tax efficient for the seller than any other kind of share sale?
Seller pays no CGT or income tax on the disposal (subject to certain criteria etc etc)
Yeah, Ti can be fixed easily enough by the right people and doesn't necessarily cost a fortune. Plenty of people on Retrobike have old ti frames fixed.
Do enigma still do repairs? When I got mine done they were pretty close to turning away anything but their own bikes just because they were so busy.
a11yFull Member
OK, that’s Planet X on my shit list, ironic after me singing the praises of their bikes earlier.Titus Mutsu, 3.5 years old, discovered a crack leading from the edge of cable port at top of downtube. Clearly manufacturing issue. Won’t be warrantied as apparently only two year warranty on Titus titanium frames at time of purchase, although it’s now a lifetime warranty which was introduced sometime after I bought mine, apparently.
Try and check out those "apparently"s, wayback engine or check any docs you have- they have previous for this, that was part of the problem I had- just straight up lying about the warranty period. It might be true here, but check if you can!
What are the tax implications of EOT?
Importantly for many business owners, an EOT creates two tax breaks: Those selling their shares may do so free of capital gains tax. Once a company is owned by an EOT, it can pay annual bonuses to its employees free of income tax.
The attractiveness to a owner disposal is you don't need to actually find someone to buy it and the big one is you pay ZERO tax on the sale.
Note the EOT can issue bonuses tax free to its employees, but it doesnt have to.
There are downsides and if the company goes pop you will lose a big chunk of your sale. Tactically most people will get the company to leverage up and make big profits early on after sale at the detriment of risk, so it can pay out ASAP. If it kills the company once you have your money... Meh Whatevs. (Cynical Mode OFF)
Neil (SuperstarComponents)
@a11y For titanium repair have a chat with Pat @ Limit Fabrications https://limitfabrications.co.uk/ he should be able to help you out...
@superstarcomponents, @superstu - interesting, thank you, I never knew that. that's a big upside for the seller...if the EOT can actually pay the price!
Nothing ever goes wrong when a firm is taken over by private equity.
@a11y that's how sales contracts and warranties work unfortunately. Would have been nice if they'd extended something to you but given they are a low margin business I think your expectations aren't so reasonable.
I'm told ti is not difficult to weld, just requires rare equipment, call around local welders.
But if you do get it repaired, would it not go again, unless you get some reinforcement added?
I'm glad they've been svaed.
I hope they go back to their routes. At the moment all the emails have wireless shifting and the bikes are costing £££.
To me, px and oo are about good solid bikes between £1000 and £2000. I don't think they have the brand name to sell bikes at over £3k despite the gears on them.
They were good at spotting trends early. 29ers, gravel bikes etc and making them accessible to people on a lower budget.
I find their road bikes range overlaps a lot and it just confuses me.
They were good at spotting trends early. 29ers, gravel bikes etc and making them accessible to people on a lower budget...I find their road bikes range overlaps a lot and it just confuses me.
About the third edit for this post, but a lot has changed. However I'm sure we always had a confusing range 🙂
Looks like they already had a large staff reduction as it was 61 in 2021, 68 in 2022 and bought with 33.
Even with a few of them being the owners who have probably gone separate ways, that's still a significant drop.
Baaj Captial seem to have their hands in clothing mainly. Wonder if they will be any good with bike manufacturing, or dwindle that side down.
I hope PX continue and at least the staff that are left have got some good news in the short to medium term - better than going to the wall totally.
aah, so according to superstar components, Dave sold P-X to the employee trust. For some reason, from the press releases I had the impression that he'd made his money, and was now giving the company to the trust. this impression was given by mention of Dave's admiration for Hugh Facey who signed over his company to his employees.
words, eh.
Or is superstar wrong here, and doing Dave a disservice?
Or is superstar wrong here, and doing Dave a disservice?
Neil clearly said that he had no details of this particular deal. He was just explaining how it can work.
20 years is a long time.
Trust me, I can hold a grudge longer than that 😂
It can still be a very good deal for the staff even if you aren't giving anything away. I now own along with a colleague the company I'd worked for 25 years. The owner didn't want to see 35 years of work and the money in the bank just disappear. We were hit with 100% loss of work in a day and the very last people back to work
When the bounce back loan became available he took all the rest of the money out of the bank and we became the shareholders with a 50,000 loan but absolutely no personal risk. We are slowly buying him out but there is only a general agreement of payment schedules and he's been very flexible.
At the moment it's looking very good and we have a real chance of making a better future for ourselves and we have nothing on the line.
They are still selling hard. REDUCED emails every few days
Wonder how that works. Is it customer roulette - when the receivers pull the guillotine release thats it money lots!?
I’m sad to see them go and hope they survive
I’m sad to see them go and hope they survive
Just in case you missed it above?
Saved!
https://www.cyclingweekly.com/news/british-bike-company-planet-x-saved-after-sale-to-private-equity-firm/blockquote >
Hope I'm wrong but...can't see the 'rescue' by Winlong/Baaj being anything other than a
short-term fix.
Saved!
For now.
It very much depends on the new owners and their outlook.
I expect a radical streamlining of the various brands and names and possibly pulling out of market segments.
Being taken over by private equity is often bad for the employees. Sure, not losing your job right now is a good thing, but it is often the case that PE will want to sell in 18-24 months so will be utterly brutal. When it happened to me the new owners were complete arseholes and it was very much a case of "you belong to us now".
Let's hope that this can be a constructive resurrection.
20 years is a long time.
And it still made me laugh....
Let’s hope that this can be a constructive resurrection.
Interesting that the new owners are in the garment sector, could they be a previous supplier?
And Will they perhaps view PX through the same lens? i.e. they've bought themselves a readymade collection of cycle clothing brands with some bicycles attached?
Makes sense to me, high mark-ups a few of seasonal/annual sales peaks to ride.
I expect a radical streamlining of the various brands and names and possibly pulling out of market segments.
It needs it. A lot of brands with very little differences. Cut to three brands and give them some identity.
Titus for all titanium bikes.
Planet X or Holdsworth for anything road.
On-One for off-road and WTF is that for bikes.
Had a couple of their bikes and they were great. Mate currently has a Planet X ti gravel bike and loves it. Bought because of price not the brand. He wouldn’t have cared which brand was on it, but would make the overall line up make more sense.
On One is the only one of their brands that has a current following and a connection to its beginnings, the rest are just a shell of their former selves bought up as they went along.
It needs it. A lot of brands with very little differences. Cut to three brands and give them some identity.
Titus for all titanium bikes.
Planet X or Holdsworth for anything road.
On-One for off-road and WTF is that for bikes.
I'd agree they need to cull the brands/bikes but I think I'd go a bit more extreme possibly. Too much choice does not work for them.
On-One: becomes their only MTB brand they cut the range down to two frame one more XC-trail Al the other LLS Gnarr pitched Steel.
PX: Becomes the default Road brand, again like the MTB range go to a one of each approach; one Al and one Carbon, both Disc only (punters just won't want rim braked bikes now).
Gravel/CX is the interesting Niche IMO, it's still a popular niche there's still money to be made there the Subset of cycling hipsters have migrated to, lots of punters are probably going to choose a Gravel bike over a Road bike now. So do they use one of their various existing catalogue of brands for that Niche or just slap a PX logo on it? For my money I'd just put a PX logo on them and only bother with an Aluminium frame for a while at least. They should carry on offering it as a Drop and a Flat bar (hybrid) option though.
I'd like to see them keep their build options sensible too, it doesn't do them much good offering all sorts of misc groupsets (they're flogging Chorus builds at present, Who actually wants to buy Campag on a Planet-X frame?!?).
I reckon they need to do two (maybe three) finish level options max from one brand (SRAM or Shimano) on most models but deliberately keep the range lean.
I'd be interested to see how well 'Cues' actually works out for an OEM like PX, I reckon we're about to see a "practical groupset war" and I'm not sure who's best placed to win...
Framesets can still work for PX, but if they're going to sell built up bikes they need to make the offering lean and focussed, bare Frames are a secondary line and pricing needs to be consistent and make the full builds look like better VFM...
They could probably retain an Urban/fixed/SS/utilitarian type frame, but go very 'Model-T' with selling only one or two colour options Max, one build option only (plus a frameset) and if people really want a logo flog them a (PX/OO/Holdsworth/Titus/whatever) sticker pack.
Ditch the Ti, Stop selling so many brand names, get their COGs down by trying to sell fewer things in more volume.
All my uninformed, Armchair CEO opinion of course...
Edit: And Clothing, They definitely need to flog clothing their seasonal bundles, accessorises like arm and knee warmers, cycling caps, etc just with fewer/less prominent logos... They could do well if their new owners help them them priority/good pricing on clothing supply chains...