Over the last 3-4 months, Saris has worked tirelessly behind the scenes trying to avoid the fate that no business ever wants to face. However, in the last few weeks, it became clear there was no other option, as Saris family owner Heather Fortune outlined in an interview today.
As first reported by Bicycle Retailer, Saris has initiated a form of receivership process to sell the company, which includes their bicycle racks products, cycling infrastructure division, and indoor training group. All three components make up Saris Cycle Group, which was previously known as both Saris & CycleOps (as well as PowerTap before that was sold a few years ago to SRAM). Saris noted to Bicycle Retailer that “We have almost four times as much inventory as a year ago, primarily on our training product, Business was amazing in ’20 and ’21, then inventory filled up in all the channels everywhere, domestically and internationally on indoor training products”.
However, like most companies that run into financial problems, the cause of this is multifaceted and often a confluence of factors, as VP of Sales & Marketing (and daughter of founder Chris Fortune), Heather Fortune explained in an interview with me today. Specifically outlining how trying to buy hardware components based on chipset lead times in excess of a year meant that they were trying to predict which trainers would be in-demand for early 2022, all the way back in early 2021. With no historical precedent for a pandemic-driven surge in indoor training, the foundation for those predictions was paper-thin.
The end result being that the company officially filed this past week to re-organize under Wisconsin’s Chapter 128, which is a debt consolidation and fast-track sale program. This is not bankruptcy, but rather, a semi-unique alternative process within the state of Wisconsin that aims to quickly sell a business within less than 90 days. The process means that Saris won’t have much control over exactly who ends up buying the company, though. Also, unlike a typical bankruptcy filing, the debtor (Saris in this case), must repay all debts in full. Whereas in normal federal bankruptcy courts, debts can be discharged. Notably, the Wisconsin process also tends to favor outcomes that are better for the state (e.g. keeping jobs in-state).
As noted earlier on, trainers aren’t the only business at Saris. The company noted revenue is roughly split 50/50 between the trainer side and the rack/infrastructure side. It’s really only the trainer side that’s problematic. Their cycling infrastructure side is up 20% year over year (to its best year to date), and the vehicle cycling rack business is also expected to have its strongest year to date as well, exceeding even 2021’s very strong year (as people escaped the indoors).
But the sale of the company is for everything. When asked whether they considered other alternatives, Heather Fortune stated that “We looked at all our options, and we really want Saris to exist as an ongoing entity. And after looking at those options, we really feel like this is the best path forward.”
A Surge Without Follow-Through:
Like virtually every indoor cycling company, they settled into late 2019 with surging demand for indoor trainer products. Platforms like Zwift, TrainerRoad, and others were growing rapidly, and with that software platform adoption, came hardware needs. That led consumers to buy trainers in droves in late 2019 and early 2020 – well before COVID spiked the world and indoor trainer demand. Going into the famed February-April 2020 timeframe, many indoor trainer companies were already struggling to keep up with demand. Once that timeframe hit, it was all hands on deck.
With the exception of Wahoo, many of the indoor trainer companies actually manufacture in the same area or region as their headquarters. Saris makes theirs onsite in Wisconsin, Elite’s in Italy in the surrounding towns, and Tacx at their headquarters in the Netherlands. The same is true for TechnoGym, and at the time also Kinetic. However, while building local has many advantages, it doesn’t take away the supply chain constraints. The vast majority of chipsets come from Asia, and all these companies are dependent on them.
In response to the spring 2020 surge, trainer companies quickly ran out of inventory. Consumers screamed. It’s easy to forget the strength of outcries from cyclists everywhere towards the trainer companies to make more trainers, faster. So, as manufacturing resumed, indoor trainer companies did exactly that. They ramped up additional assembly lines, built new factories, acquired competitors with manufacturing capabilities, and even went to 24×7 production. And for a while, that worked. Sure, there were delays, but by late 2020, you could generally find smart trainers if you poked around enough. Maybe not the exact model you wanted, or the exact price, but it was very doable to find most models.
Around that time though, companies had to start trying to figure out their future inventory. With the demand for trainers, came the demand for everything else consumer-goods related. Which in turn skyrocketed chipset lead times, and in the case of Saris, their specific chipset lead times were now at 1 year+. Saris found itself in early 2021 trying to figure out what demand would look like in 2022. Would the pandemic be gone? Would demand still be rising? Would this newfound crop of pandemic indoor cyclists that perhaps bought budget trainers, now be looking at high-end trainers for 2022?
These were, at the time, all perfectly valid questions. And the same questions every other company was trying to answer too. Ultimately, Saris guessed high. And one year later in early 2022 found themselves with a massive slate of inventory, all without any buyers.
As January 2022 settled in, indoor training companies across the board collectively and concurrently realized the same thing: Nobody was buying trainers anymore. Specifically high-end trainers. Sure, some companies like Garmin/Tacx were a bit better weathered to handle this, due to their massive global distribution network. And companies like Elite ramped up less during the pandemic, and even where they did ramp up, they largely used temporary contract workers/facilities. But for Wahoo, Peloton, and now Saris – it meant just a massive pile of trainers in warehouses. And for companies like Zwift, a combination of a lack of demand with the same chipset and availability shortages as Saris, meant cancelling basically everything. And Kinetic trainers? They closed down and sold the branding shell to Magene this spring for pennies on the dollar.
In the case of Saris, they’ve never in their history had to make component lead-time decisions that far out. Part of what has made them successful till now is that manufacturing is done on-site, so they’ve only had to account for relatively short supply/component lead times, and can manufacture as needed. In fact, their business has been set up since the beginning to operate as an ebb and flow of seasonality between trainers and bike racks, enabling them to maintain full-time employees year-round. Heather Fortune noted that out of the 128 employees currently at Saris, 20 of them have been with Saris in manufacturing for more than 20 years.
As consumers, we saw wave after wave of sales this past winter, with no better example and probably foreshadowing of what was to come than an unprecedented sale by Saris just a few weeks ago, putting their high-end H3 trainers at 60% off, down to $399. In talking to Heather Fortune, she acknowledged that part of that strategy was to clear inventory in a way that would also raise money to reduce debt. But she also noted that they specifically chose this recent June timeframe for this inventory clearing as it would be unlikely to disrupt retailers much, who aren’t as focused or stock-heavy on trainers in the summer.
Now to be clear, one can’t blame all of Saris’s troubles on COVID. As one who watches this industry, I’d argue a meaningful part of the situation they find themselves in now was a lack of smart trainer innovation in the 2019-2021 timeframe. As you may remember, Saris released the Saris H3 trainer in the summer of 2019. It was good, but it wasn’t a head-turner. That’s because it was basically just a Saris H2 from 2018, with a new belt and supporting components. And that Saris H2? Well, that was literally a rebranded CycleOps Hammer 1 from 2016 with a different outer shell color. And that same process was mirrored on their Saris M1/M2 mid-range trainer lineup.
While Saris did substantially innovate with the Saris MP1 platform (and to a lesser extent with the Saris TD1 desk), the reality is that for many consumers, Saris hadn’t really innovated much in trainers. So while the Saris H3 smart trainer was great at ERG mode, it was a hard sell at retail prices against other high-end (and totally silent) trainers. Which is probably ultimately why the Saris H3 trainer has lived almost perpetually on some sort of retail sale state for years.
One last factor that Heather Fortune noted that Saris believes is contributing is ultimately subscription fatigue. Most users use a smart trainer with some form of subscription platform, be it Zwift, TrainerRoad, etc… Heather noted that the feedback they heard from consumers is that as people step out of their COVID shell, they’re realizing they’ve amassed a slate of subscriptions across varying avenues. Not just Zwift or cycling related, but Netflix, newspapers, entertainment, and umpteen other things. That combined with signs of a recession, and a spike in inflation has caused many to take stock of just how many subscriptions they have, and how many they actually use. And in turn with that, decide that maybe they don’t need that new trainer after all. One only needs to look at the concurrent user numbers on platforms like Zwift to see the reality of this.
Which isn’t to say people won’t come back. They will. But right now, everyone who was looking to purchase a high-end smart trainer has done so in the last 2.5 years. The challenge for companies is to weather this down-period, while still innovating. Companies that don’t innovate with new products won’t be top of mind for consumers once they aim to buy new trainers – either near term or long term.
Of course, developing and releasing new products in 2022 requires even more guesswork than in 2020 or 2021. Chipset lead times have continued to plague the industry, and Saris’s new product plans specifically, with key component orders for new products placed over a year ago now delayed, impacting the very thing I’d (and probably they’d) argue the company needed the most to drive interest and revenue: Newness.
As for Saris and its future, they don’t have a ton of control over it. Their hope is that by selling the company in whole, it largely remains together – ideally keeping the employee’s jobs as well. She noted again they expect the sale process to be very quick, likely lasting no later than summer. And also noted that they do have interest already, and expect that to climb as word gets out. While the number of viable suitors is substantially lower than it was a year ago, the reality is that indoor training isn’t going away. Roads certainly aren’t getting safer, and cyclists are still spending an ever-increasing amount of time indoors riding bikes not just each winter, but year-round. It’ll merely take a company that can swallow the debt short-term, and look towards 2023-2024 for more stabilization. Further, Heather Fortune did note that their indoor trainer accessories business continues reasonably strong (e.g. rocker plates/etc…), showing demand exists in the segment from existing users to add to their setups.
Hopefully, Saris as a company can find that new owner, and we can keep players in this industry. More options is always good for the consumer, especially when it’s one of the big ones.
With that, thanks for reading!
Nice article. Wouldn’t be surprised if there are more. It feels like people are totally burned out on indoor training and maybe outdoor riding as well. I’m basing this on my limited sample size Strava feed, but another DCR article mentioned Zwift is dead right now (sort of typical for this time of year, granted). Fitness trends are cyclical. Rollerblades anyone? Roads and trails where I live are much less crowded with cyclists.
Typo: Heather noted that the feedback they *hear from consumers
I find it amazing that faced with one year lead times, businesses decided to go with “the boom will continue” rather than being conservative. Booms by their definition are followed by busts, did anyone realistically think that the level of sales would continue to be high a year after an ongoing boom? I guess this is why I’m an astronomer and not a businessman.
I hope they stick around, more competition is good. Also sad to hear about Kinetic, I loved their Road Machine trainers back in the day, but they were just too slow to the market with a KICKR competitor.
Predicting the peaks & valleys is harder than it often seems. If the boom is long & huge and you under-forecast then you have an even lower share of the market. It is possible that to get their chips they had little practical choice but to put in a huge order and try to swim along with the tidal wave.
In any case I hope things work out for them. The industry doesn’t need less competition.
I do not buy this story as written. Chipsets are not that expensive. The typical nRF52832 used in this class of products for $3 in quantity. That is peanuts compared to the full BOM. But here comes the big but. If you bought 100k of those, but need only 20k, you can sell the rest again. Why ? Because everybody is in the same boat and wants to get access to those chips. You can sell those days even chips that are one year out to be delivered.
To me that sounds like there were more issues at hand.
Interesting comment. I agree there is more to the story. Their balance sheet must be weak – which would be odd for a company of Saris’ longevity. Article states revenue split 50/50 between racks and trainers. Ray’s comment about lack of trainer innovation had to be a factor as well.
Keep in mind, chipsets are only one component (and, there’s more than just a single ANT+/BLE chip in there). They had to order countless other parts too, which ultimately led them to make trainers last summer/fall in anticipation of another strong year. Obviously, they should have stopped making trainres and held onto parts.
But inversely, chipset as noted also has held them back for planned products. They couldn’t get the chips/parts they needed, and have had to further delay launches.
Again, this isn’t some Saris-specific problem. It impacted Wahoo, Zwift, Peloton, and others. Hindsight is 20/20, and it’s easy for us to look back now and see that indoor trainer sales didn’t materialize. But keep in mind, last summer, and into last fall, bike sales continued at record pace. It was therefore pretty logical to assume the same percentage of those sales would translate into winter trainre buyers.
So what you didn’t include is that the nRF52832 is in every single Apple Airtag. Tada. Apple + Pandemic mess ups = no chips, no modules, no nothing. So the market is starved from two ends. Nordic giving priority to the literal 10s million chips to Apple which starved out the market. Basically Apple came in, took something like 5 times the annual volume of the nrf52832 just before pandemic and has been the preferential customer since then.
The industry shifted as best it could. Most companies went down to the nRF52810/811/820 if they were cost sensitive, and others started to consolidate on the nRF52840. SRAM for instance ported their zigbee like protocol to the nRF52840 for their one button wireless blip because they could ditch the secondary chip as that offset costs.
But a lot of companies don’t want to redesign boards as it requires FCC re-approval — RF chip is a from scratch approval and not a permissive change. Even a simple module swap requires labeling changes — which sometimes are cast into the plastics.
Source: My company has been out of products for months now due to our order from last year getting pushed 3 times to date, we should have had modules in Dec 2021 — current estimated date is Sept 2022. We ordered in August 2021! We simply don’t know when our nRF52832 modules will show up.
Even the airtag runs on the ’52? I’ve been suspecting that my assumptions about that chip’s ubiquity were somewhat exaggerated, but I’d never have guessed that it’s in the airtag, apparently I underestimated instead. Now that I think about it it seems kind of obvious, why not, what else would it run on, but I still feel deeply surprised. Funny how minds sometimes work.
I’m curious what this means for existing customers. I just purchased an H3 based on the great deal two weeks ago. Am I going to have issues with my brand new trainer in another year?
If it helps, I’ve had a Hammer for years and it’s been great. I bought an H3 on this sale because I figured it’s time to upgrade / replace before my Hammer dies. (Everything dies eventually.)
This way I can sell my Hammer for cheap locally, then for a couple hundred have refreshed my trainer at home. Because of my experience with the Hammer, I have faith the H3 will be good as well.
Same as Steve, I’ve had my H3 for a couple years now and have used it a lot. No problems at all, seems as good as the day I got it. Point being the odds are you will get many years of happiness from your H3 even if support for them wanes. It is a nice unit.
hindsight is 20/20 of course, but i find it incredible that none of these fitness companies (yes there will be a lot more than just saris) understood that lockdowns would not last forever (unless you live in australia…) and sooner than later people would be out and about again and all this indoor equipment would be once again relegated to niche status
Why would it be per default “niche status” ? Got a KICKR because of COVID. Turns out that during the week I prefer doing indoor workouts, because I have more freedom over then when (it’s dark outside at 4:00am, but sunny in Watopia). It also takes less time to do your 90 minute session, because you don’t have to drive anywhere first, or ride to the local hill to get your Z3 intervals done.
Guess I am not alone, and to me it does not seem unreasonable for a company like Saris to speculate that there might be demand going forward.
Having said that, everybody who wanted a indoor trainer got one during COVID. What Saris needed (and the rest out there) is a new product that would replace the current trainer, something noticeable better, a good upsell.
oh it’s niche. of the population of people who consider themselves cyclists, i’ve seen estimates that less than 10% own an indoor trainer and far fewer own “smart” trainers. it’s a *small* market. look at the the concurrent records for the biggest platform, zwift. 15-20k? that’s worldwide. if you just put that 20k number in the US alone, that’s 400 people for an entire state. we get more attendance at our school board meetings…
400 people divided by, what, 10 companies making trainers? they’ve sold 40 units each? and that was in peak pandemic. i know the math is highly suspect here, but any back of napkin calculation comes up with the same result. it’s a REALLY small market. go on RGT on any given day and you’ll see, what, 9 people racing? again, worldwide…
Point of fact response to what I know was just an aside, but living in Australia did NOT mean enduring extended lockdowns. If you lived in Melbourne, yes, but elsewhere, certainly not. Where I am, 6 weeks total over 18 months. During most of that time, we could ride our bikes (just somewhat locally), could get coffees from our local coffee shops etc.
In the NT I think they had a total of 8 days in lockdown.
Melbourne’s time was awful, but not at all consistent with the rest of the country.
Same in NZ with Auckland – they did it hard, but most of the rest of us had one x 7 week lockdown in March 2020 and another shorter one in August 21. Other than that, it’s been almost business as usual.
Ray, you mentioned the Kinetic to Magene sale. Is there any more info specifically about what happened here and any future direction via Magene? They did the transition without much fanfare or announcement. I put the dots together along the way and got confirmation from a couple of other sources, but I still haven’t seen anything more official than your comment here.
Yeah, more coming soon. It’s a bit of a rainy day post for me.
Good deal. Can’t wait to check it out.
Thanks for this article as it helped fill in from the other articles issued yesterday.
Certainly this current economy is not helping. I suspect they have labor issues, coupled with twice the price in shipping costs, etc. etc. etc. It’s not hard to imagine the damage done by lockdowns to every business by just examining the amounts your business received from PPPs plus the tax checks. Let’s say that your small business received $60,000 in PPPs and you and your family got $8,000 in tax refunds. Now you look at your investments that are down $260,000 since the first of the year. Would sure like to give that $60,000 back to the government to have my company’s stock portfolio back. The recession may be just beginning.
So I guess that explains the big sell off of the H3 for $399 the other week, ( I snagged one).
As an ex-employee, I can’t say I’m surprised. The company is mostly staffed by smart and diligent people trying to make good bike products, but the leadership has continually kicked the stool out from under every department without a family member in it. Here’s hoping the company’s bought by proper business people, as there are some great products and ideas to be had!
I guess that explains why I was able to grab a Hammer H3 for $399 last week- which I was pretty thrilled about. Used it 3 times so far. It’s got a nice feel. Quiet. Stable. Seamless integration with various platforms. No issues. Power transitions feel smoother than on the Wahoo KICKR- but that’s a really nice trainer as well.
Shame about their business issues- but did they really think the boom was going to continue? They make a slew of great products. And I didn’t realize they were made in Wisconsin.
“Notably, the Wisconsin process also tends to favor outcomes that are better for the state (e.g. keeping jobs in-state)”
If only there were a gigantic Wisconsin based bicycle company [cough]Trek[/cough] with deep pockets that could swoop in and bring some capital, fresh ideas, and maybe fresh branding [cough]Bontrager[/cough] to the remnants of Saris.
Trek would move manufacturing to Asia leaving US employees with a bleak future.
It isn’t a bad idea. There was a Cycleops Fluid 2 with Trek branding some decades ago.
Lets, hypothetically, pre-emptively claim a company that is only involved by being in the same state and industry would fire employees.
This is a real shame. I hope the personnel weather through this and come out on their feet.
I do think Saris had a much stronger portfolio with the PowerTap brand but unfortunately the didn’t innovate fast enough. This sounds somewhat similar to what happened in their trainer brand, although a perfect storm of events have amplified their issues. Chip shortages/delays have affected every industry from appliances to automobiles to weapons systems.
BTW, I still use a PowerTap G3 hub on my backup road bike. Although it lacks the L/R power profile of my Garmin pedals it simply “works” every time. That was an awesome product. PowerTap pedals were also, by most reviews, solid performers at the time. Innovating and updating that product could have provided a steady stream since there are really only two other power pedal offerings.
I would love to find a New Old Stock G3 Disc Hub somewhere to throw on my Niner fully rigid gravel/trail bike.
My G3 Powertap just died after a fantastic 7 year run.
I support the opinion that their Powertap brand was something that they could still rely on if they had not sold it. Maybe Saris was not good enough to follow the herds wanting newer and newer solutions, but I still think that a reliable powermeter worths much more than another one with more feature, but with shorter lifetime.
It was like 10 years ago when I bought my first PM, a Powertap Elite+ (or similar name, it was so much time ago that I dont exactly remember its name 🙂 ), and it still works properly, it never needed any factory recalibration either. I think it was called a Gen 2 Powertap hub. There is just one thing which is uncomfortable it does not broadcast the health of the batteries inside, so it may happen that out of the blue one has to swap the batteries, which takes some time and experience.
Sidenote: I remember it was a real hunt in 2012 to find a direct force PM costing not more than USD500, which was my budget limit then. Finally I found one on ebay selling by a Canadian store. The relatively low price must have come from the not-so-lovely weight of the hub and its sub-type (the hub has 20 holes). Since I live oversees, in Hungary, it was a sort of high risk what would be if the unit would be malfunctioning. And it was really exciting for me, a layman, to have a powermeter and to get used to watch the power statistics at a time when even the majority of local pros did not have this training and racing tool.
Since it did not die I did not need any other powermeters until I bought a recumbent bike, a high-racer, and I was curious how much less power I can exert riding in a recumbent position than in an upright one. By then even Gen3 was discontinued and sold out, but I found cyclingpowermeters.uk which offered refurbished Gen 3 hubs for GBP 300. I think it was in early 2018 and I have the same sort of positive experience with it, no problem, no need for factory support, moreover the battery status is reported, so I get a warning before it dies.
As regards their indoor trainers I cannot add anything, because I bought a Tacx Bushido back in 2011, which I sold since I have no interest in trainers any longer.
Finally one should not forget that Saris had cycling computers too, I owned some under the brandname of Cycleops and Powertap, too. I loved both the Cycleops Joule 2.0 with its revolutionary metrics like peak power over 5 mins, 20 mins etc., or the number of surges/sprints one has made broken down to different W/kg ranges, and Powertap Joule GPS, which inherited these metrics, but had much better interface.
Their “sports register” software (dont remember its name) was fairly lame to be a primary tool for keeping records about one’s activities, but was a good tool to download the activities and convert them to many formats needed for other and more developed softwares.
As anyone can see I really love Saris for developing Cycleops and Powertap products and I am so grateful that I could and can enjoy these products which did not steal my time as did ones from Garmin and Tacx (jeez what a substantial amount it may be the total time I spent with bugs and mysteries of Garmin devices and Tacx softwares).
So I still wish long live to Saris even if the present shows that the facts are just the opposite!
What a bummer. I beat the absolute heck out of a Fluid2 and they wouldn’t let me buy a replacement fluid unit for it. They insisted on doing it for free. I was so impressed that I bought a Powerbeam Pro a little later and used it so much. I had a small issue eventually and I drove it to them since I was an hour away. They diagnosed it and overnight shipped it to me shortly after once they fixed it. Then I bought an H2 and continue to use it 4-5x a week. I would be tempted to buy an H3 as a backup if the H2 wasn’t running perfectly after a few years of moderately heavy use.
Their racks are pretty good too.
Best of luck Saris!
Much of this sounds like BS from the VP of Sales & Marketing. NEWSPAPER(S!!!) subscription fatigue is influencing their consumers!?!
Also, Saris has been offshoring. The Saris MHS, and Door County racks as well as the swing away accessory are Chinese made.
Saris was floundering long before 2020 and the owner is squarely to blame.
But we don’t come here for news, we come here for your detailed reviews! TELL US ABOUT THE INNOVATIVE TD1! You’ve been teasing a review for months and it would be a fitting epilogue to the Saris story.
So they over invested in hardware and sales tanked. All their working capital is tied up in inventory they can’t convert back to cash. They probably can’t get a loan at favourable interest rates to ride the company over till they do get the inventory sold because even at 60% discount the market isn’t buying. So the only way out of the hole is to sell the company to an investor to raise cash .
It is very hard to get a loan at favorable rate if you want to create your business.
Really sad to hear that. I got a Saris H3 just after the very first pandemic (got it barely new from a guy here around) and was really impressed by the unit.
I also needed some support for a slight noise issue, which was resolved easily, and in that circumstance I also opened the unit and was quite impressed by the built quality.
I can’t hope anything but the best for them, and that they’ll find someone able to drive them through that financially difficult situation and then settle again on doing good stuff for cyclists.
Dying from Success! Sad news.
Interesting read. Thanks!
I love my H3!
I live in Madison, WI where Saris is based. Someone commented the following on the link to your article in the /madisonwi Reddit community:
“A coworker of mine left Saris a few months ago and had a few texts last night from their former coworkers telling them everyone was let go.”
I’m hoping this is a false claim because I can’t find this info anywhere else but maybe it’s worth verifying as an update to your story?
Whether Saris used the practice in the past or not, companies do lay off assembly staff when there are enough weeks forecasted with nothing to be assembled. When there is work to be done they get hired back.
Let’s hope this is the case rather than the new management deciding to make a radical change.
I checked with Saris, and they immediately responded “There were no layoffs yesterday and none planned.”
So I’m not sure what that comment is all about.
For many years the CycleOps Power/HRM chest strap has been the basis for my bike training. Kept hoping a new, improved version would come along. Still think it’s a good idea for those of us who use many bikes and trainers but don’t want to move power sensors from bike to bike.
A shame to see a storied company have to go down this road. Ray, do you think firms like Technogym are going to take notice and potentially drop the outrageous pricing on their Ride trainer? I’d absolutely buy one, but the NZ price is 10.5k and I am just not going there.
It’s hard to say. I get the impression that TechnoGym just doesn’t care that they’re overpriced in that segment. I got the feeling from visiting them last month that they’re happy to stay the course more in the gym/premium home segment, and they’re OK if people don’t feel like their price is competitive. It’s sorta like a Bose or what-not. Yes, they make good products, but you’re paying a premium for something that it’s actually better than competitors at lesser price points. I think in the gym/at-home-gym market, they can kinda do that since they’re well known at least within Europe (though, Peloton has, is, and will continue to redefine that for them both in Europe and elsewhere).
That said, they’re also interested in expanding into the US more in the consumer space, and they’re going to have to re-think that pricing strategy if they want to make any inroads there at all.
Speaking of which, need to see if I can wrap-up my test of that shortly.
Cheers – looking forward to reading that.
I think that a big brand of cycling accesories like Topeak, Lezyne or Blackburn, could be interested in expand their porfolio with Saris racks and trainers.
Seems like a classic PE (private equity) opportunity. In stark contrast to Peloton that has deep engineering talent and access to capital markets, Saris appears to have neither of these critical ingredients for survival. While the Saris businesses may be able to be sold in parts to other companies in the respective market sectors, an easier sale for Heather will be to a PE firm that has access to capital and more disciplined operations talent. The P.E. firm will shudder any bad products (or sell for nominal amounts), build existing ones that have strong margins and market opportunity, and invest where opportunity exists. They are also not limited to local Wisconsin talent for firms that are of significant size.
Bob, seems you are weel infomed on PE/VC market – may I have a question to you though via PM/email?
Well that explains how I got a H3 in May for $450. I was upgrading from a fluid trainer. I don’t regret it for the price to features value. So far though it feels like it cadence brakes me in erg mode when I want to be over 100rpm and if I lose focus it’s drifted back down to 100. Post purchase I was glad to see that it was made in Wisconsin and not overseas.
$450? Whoa! That’s an even better deal than I got. Out of curiosity, where did your find that?
Are there any players in the market with the capital to buy it?
Plenty, both cycling companies and various private equity or similar.
Wish I’d seen that sale on the H3, might have made jump to wheel-off trainer.
Ray, any chance Zwift would want the trainer business to rebrand since they dropped their original plans? I’m guessing not likely, since seemed they had higher end ambitions. Probably taking an existing and, per your story, somewhat outdated model might not be useful to them. Plus no reason they’d want a rack company
Zwift poked numerous times at buying it over the past few years (Zwift poked at buying many trainer companies). Never happened.
Years ago, I think it would have made a ton of sense. These days, I’m not sure buying Saris makes a lot of sense given the 100+ Zwift people they just laid off (including the division making the hardware they wanted). Part of the Saris challenge is that they lack a deep engineering team. Meaning, they have just enough engineers to maintain the product line, but, as we saw, not enough to really do a ton of new hardware products/revamps.
So, for what Zwift ultimately wanted (a vertical integration), I don’t really think they’re the right fit. Especially with a lack of engineers to get from A (what Saris is today) to B (What Zwift wanted).
Ray, Very well written article.
I picked up an H3 on Amazon for almost half the price of the Neo or Kickr. So far I like it; it’s plenty quiet as compared to the Kinetic Rock and Roll Control I had been using. That being said, I do have one concern: accuracy. My Favero pedals and the Kinetic were never more than 1W apart. The H3 has read 3-12 W LOWER NP than the pedals. Max power readings have also varied greatly. I updated the firmware and calibrated it and still get significant differences. Any ideas? Thanks in advance for the feedback.
Thanks, Ray, this explains a lot. I’ve been frustrated with Saris, the prices of their MP1/Nfinity platform, and seeming unwillingness to reduce said price points while other companies innovated past them. Any small company competing globally has its share of challenges, with the pandemic skewing any number of factors exponentially. I’m truly saddened that a solid brand has had to come to this decision.
I happily acquired a factory reconditioned H3 at the end of 2021 for a great price that suits my needs perfectly. The H3 is more than adequate for my indoor training, I wanted to purchase from a home-grown company, and their well-constructed products are bulletproof. I’ve owned their bike racks, now three trainers over the years, and can attest to their products’ build quality.
I wish them well, hoping that any suitors appreciate the company for what it is and what it produces, which is a solid foundation to grow upon. I can think of another Wisconsin company and its accessories subsidiary that doesn’t offer the product lines Saris brings to the table…hmmmm…a little cash, a little corporate altruism…you never know. Call me guilty of wishful thinking.
I was about to order an H3 here in NZ as they are being offered at NZ$999 by one of the bike shop chains, but reading this article makes me worried the firm might not be around long.
Mainly TrainerRoad workouts, and I know Ray rates the H3 for that use. But what about support if things don’t go well for Saris.
Currently it is hard to find money!
Literally justbbought an H3 before I heard about their financial issues. Pretty worried about getting firmware upgrades, warranty issues, and the Saris app shutting down which to my would result in making it impossible to recalibrate the machine:(
Checking in on this since it’s been around 3 months beyond the announcement… is there any public info on the direction this all went?
I have been trying to contact Saris support since late September in order to get an issue resolved with my H3. Apparently this explains why I haven’t received a response. Sigh.
News from Ray this morning:
link to dcrainmaker.com