Trek Bicycle plans to ‘right-size’ and cut spending by 10%

Trek Bicycle plans to 'right-size' and cut spending by 10%

As one of the top 20 electric bike manufacturers in the world, Trek Bicycle President John Burke said Trek plans to “right-size” the company by 10% due to declining sales and high inventory levels, but Burke stressed that the company’s overall strategy remains unchanged.

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    Global market slowdown

    The global electric two-wheeled market(e-bike market) has been slowing down since 2023, retail sales of complete bicycles are weak, market inventories are always at a high level, the unstable economic situation, consumers’ reduced willingness to buy and increased competition in the market have put a lot of e-bike manufacturers under pressure to operate.

    Trek Bicycle plans to right size and cut spending by 10 1

    Last year, many bicycle companies began to restructure their business or lay off employees to reduce expenses, such as Vista Outdoor, HLC, Rad Power, REI, Zwift, QBP, The Pro’s Closet and Signa Sports United (owners of WiggleCRC and others), Shimano saw a 30% drop in sales last year, in addition to the costs associated with a major crank recall. and companies facing bankruptcy and restructuring crises.

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    Trek plans to cut spending

    The global bike market is “in disarray” at the moment, with high inventory levels at both wholesale and retail levels leading to “significant and sustained” discounts, Burke said.

    So, in addition to cutting costs by 10%, Trek also plans to significantly reduce stock holding units (SKUs) for the 2026 model year by 40% compared to the 2024 model year.

    Burke noted Trek has missed its monthly sales targets for the past 15 months. Faced with this situation, he chose to scale the company’s operations to market realities, reducing overall spending by 10% through program cuts and layoffs, and announcing implementation details by Friday.

    Meanwhile, in response to the inventory burden imposed by different product lines and models, Trek said it will streamline product lines and reduce inventory levels, which are expected to be 20% lower for 2026 models than they were before the bike boom, as measured by inventory days.

    Trek Bicycle plans to right size and cut spending by 10 3

    Other views

    BRAIN spoke to some of the professionals at the Taipei Cycle Show about restructuring Trek’s business, and here’s what some of them had to say.

    Steve Fenton, owner of Pro-Lite Manufacturing, said of the move: “I think it’s the right thing to do. In fact, if I were in charge, I would do it on a larger scale. My view is that all the big brands have to do it.”

    Burke’s view of the turmoil in the global cycling market resonates with industry insider Fenton, who points out that “the industry is run by enthusiasts, not businessmen, and there are too many followers and not enough leaders.

    “Trek is not alone in this situation and other brands will be taking steps to address the issue. Many have taken risks by overinvesting and are trying to minimize the likelihood of risk by being more conservative with their portfolios.”

    Another supplier said that the industry is currently in a reshuffling phase, that the slowdown in the market is a long-term condition, and that promotional discounts are not doing much to drive sales.

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