Another Sign Bike Companies Are Out for Lunch-
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  1. #1
    Team NFI
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    Mar 2007

    Another Sign Bike Companies Are Out for Lunch

    Bicycle Retailer and Industry News

    LAS VEGAS, CA (BRAIN)--Bell Sports has filed a lawsuit against Specialized Bicycle Components claiming that the Morgan Hill, California, company has engaged in unfair and unlawful business practices. (Click on title to download PDF of Show Daily 3).

    In the complaint, filed Sept. 9 in the Superior Court of California, Santa Clara County, Bell Sports alleges that Specialized is attempting to force dealers to agree to not sell its Giro brand of cycling shoes.

    “We received notice about this Friday and responded to the court on Wednesday,” said Mike Sinyard, president of Specialized. “The court held a hearing and we are respectfully awaiting the judge’s decision.”

    According to the court documents, Specialized issued an addendum to its dealer agreement asking dealers to agree to no longer purchase or sell Giro cycling shoes, and that Bell “suffered and continues to suffer an increasing decline in market share as a result.”

    “The dealer addendum has unlawfully restrained and will continue to unlawfully restrain the sale of Giro cycling shoes … and will substantially prevent Giro cycling shoes from competing with Specialized’s cycling shoes,” the complaint stated.

    Bell Sports alleges that Specialized threatened to withhold high-end bicycle inventory from dealers carrying Giro cycling shoes and that some dealers were told they would not receive their year-end purchase volume incentives or manufacturer rebates if they continued to sell Giro cycling shoes. As a result,

    Specialized dealers who carry Giro shoes have canceled existing orders, retracted on verbal product orders or asked Giro to take back inventory on their shelves, the suit documents stated.

    “A line has been crossed,” said Greg Shapleigh, senior vice president of Giro and Easton Cycling. “They’ve stopped simply providing financial incentives for retailers who support their brand and their business to telling them what they can and can’t buy even if they’ve met the obligations of the agreement they signed with Specialized initially. Retailers can’t buy the products they think are right for their business and consumers don’t in many cases have all the choices that they should have. All we want is the ability to sell our footwear to dealers who want to carry it.”

    In addition to the lawsuit, Bell Sports filed for a temporary restraining order and preliminary injunctive relief asking that Specialized cease and desist from engaging in these practices.

    As of press time, no ruling had been reached on the case and the next court date was scheduled for Feb. 14, 2012.

  2. #2
    Reputation: electrik's Avatar
    Join Date
    Oct 2009
    Seems like anti-competition. Although this sort of play is pretty common, not usually put into writing!

  3. #3
    sock puppet
    Reputation: osokolo's Avatar
    Join Date
    Jan 2004
    I hope Bell nails them, though I am pretty sure Spesh consulted their big dollar lawyers about this before they put it in writing.

    As much as bike shops are hit with this - we as consumers are losing as well, as this is less competition and more price control...

    Weak move on part of Specialized, but I can see their financial rationale... Good it ended up in the court - we'll see how legal it is...

  4. #4
    Hack Racer
    Reputation: Cheers!'s Avatar
    Join Date
    Jun 2006
    Sounds about right.

  5. #5
    Reputation: rkj__'s Avatar
    Join Date
    Feb 2004
    Does Giro make good shoes?
    When under pressure, your level of performance will sink to your level of preparation.

  6. #6
    Evil Jr.
    Reputation: garage monster's Avatar
    Join Date
    Oct 2006
    Quote Originally Posted by rkj__ View Post
    Does Giro make good shoes?
    Dunno, they're pretty new at it but I like the helmets. I'd be willing to try on a pair.
    Please enjoy seeing this terrible collection of me - something wonderful is about to happy.

  7. #7
    Team NFI
    Join Date
    Mar 2007
    Quote Originally Posted by garage monster View Post
    Dunno, they're pretty new at it but I like the helmets. I'd be willing to try on a pair.
    I think it was our No Geared Wonder who noted they came up a wee bit lacking.

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