WisBusiness: Trek rides 'Lance effect' to higher sales
By Brian E. Clark
With Lance Amstrong’s unprecedented sixth victory in the Tour de France all but assured this weekend, Waterloo-based Trek Bicycles is reaping the benefits of his success.
That’s because Armstrong, a cancer survivor and arguably the world’s greatest cyclist, has been using the Wisconsin company’s bike frames since 1998, the year before he won the world’s most prestigious cycling event for the first time.
"The impact of his repeated victories is enormous," said Zapata Espinoza, a spokesman for the company. "It has boosted the prestige of Trek domestically and abroad, increased sales – especially among road bikes – and made the feeling of spirit here even stronger."
The company also built a solid reputation making mountain bikes and hybrid cycles – which combine some features of both road and off-road bicycles. Based in Waterloo – population 3,200 – the 27-year-old firm is the dominant American cycle maker. Trek’s story began in a 7,000-square-foot barn with a handful of cycling enthusiasts building frames. By 1983, it was sponsoring the 7-Eleven Women's Team and Olympian Rebecca Twigg.
Lou Mazzante, senior editor of Bicycle Retailer and Industry News, said Trek picked the right horse when it signed on to sponsor the U.S. Postal Service Team and Armstrong.
"Big Blue," as the Postal peleton is called, is the only Tour de France team using Trek bikes. In addition to the Waterloo plant, Trek also has an assembly facility in Whitewater. It has more than 1,100 employees in Wisconsin.
Though no exact figures are available, sales of Trek’s sleek racing bikes have increased by double-digit figures in recent years – due in large part to the "Lance effect," said Trek spokesman Dean Gore.
"We sell the same bikes that Lance is riding, absolutely," he said. "People want them."
Tyler Klein, who manages the Trek store on Mineral Point on Madison’s west side, said Lance and the Tour have been hot topics with customers in recent days. Over the past year, Klein said his store has sold eight Madone bicycles that are a near match of those used by Armstrong. The price tag: $5,000.
"I’d say half the people who come in want to talk about the race," he said. "It has spurred enthusiasm for cycling and made more people want to get out and ride.
"While I can’t say that anyone has said ‘I want a Trek bike today’ because of Lance winning a certain stage of the race, we know that people associate him with Trek bikes and you can’t beat that," he said.
Annual sales for Trek – a privately held company – are about $430 million and Gore estimated that 40 percent of that figure comes from road bikes. Nearly all of those high-end frames are made in Waterloo, while other bikes are made at plants primarily in Asia.
After two-plus weeks where it’s been nearly impossible to open a newspaper, turn on the television or log on to a Web site without reading about Armstrong, the Tour ends on Sunday in Paris. On hand in Paris will be John Burke, president of Trek, and a bevy of other company officials. His father, Richard Burke, co-founded the company with Bevel Hogg, a native of South Africa and a Madison bike shop owner. Hogg left the company in the mid-1980s.
Gore said the last week of the Tour has become an event in itself for Trek.
"We make it a big deal our dealer base and raffle trips," said Gore. "All the top sales management is there. It’s huge for the world of cycling and certainly for us."