Trek is preparing to make cuts and wants to reduce its catalog

Trek decides to cut spending by 10% and reduce product range by 40%. The American giant responds to the high inventory levels and the decrease in demand that the sector is facing after leaving behind the record levels reached in the wake of the pandemic. The measures follow the same line as those adopted by other companies.

Trek recalculates: how to balance the numbers after the post-pandemic slump

The aftermath of the pandemic still lingers in a cycling sector that is recovering from unprecedented years of prosperity. The high demand back then gave way to a drop in business figures that, combined with the inventory volume, triggered a wave of discounts and readjustments. Hence, in recent times, news of cuts has hit a large part of the cycling industry from top to bottom.

The cycling sector is weathering the storm as best as it can, and now that the figures have deflated after several records, companies are opting for different strategies to hold their ground while the storm lasts. Just a few months ago, alarms were raised at Wiggle Chain Reaction, the dismissal of 11% of Bianchi's workforce was announced, or more recently BCM asked the Swiss government for help to save jobs.

Trek acknowledges the poor data and prepares a readjustment based on two pillars: cutting spending by 10% -including job positions- with the purpose of "right-sizing" the company and reducing the product range by 40% in two years. The measures allegedly appeared in a statement drafted by John Burke -company president- which was accessed by Bicycle Retailer.

In this same statement, Burke stated that "the market is in chaos" and that they were experiencing "turbulent times in our business." The measure aims to address the current situation: a lot of available stock and dwindling demand. In fact, the decision is based on reducing SKUs -unique reference code for each product; each bike and each part is registered under a different SKU for each size and color-. Reducing SKUs by 40% would mean reducing them by 20% compared to what they had before the pandemic.

 

The statement highlighted the tough time the company is going through, as Burke admitted that retail sales have been below Trek's own forecasts; specifically, they have fallen short of expectations over the past 15 months.

The measures taken by Trek point in the same direction as other solutions adopted by other players in the sector who, despite differing in how to tackle the situation, seem to agree on the analysis and the need to reduce now that the market has also shrunk.