Chapel Hill-based Performance Bicycle, a homegrown business that expanded to become the nation’s largest specialty bike retailer, has been acquired by the maker of Fuji and other bike brands.
Advanced Sports International of Philadelphia has acquired the chain, which includes 106 stores plus the Nashbar online sales site.
Financial terms weren’t disclosed. Performance Bicycle’s corporate parent, Performance, had been majority owned by North Castle Partners, a Connecticut private equity firm, since 2007.
Performance, which started as a bicycle catalog company more than 30 years ago, will continue to be based in Chapel Hill and led by CEO David Pruitt.
Patrick Cunnane, president and CEO of Advanced Sports, said in an interview that the bike retailer already is the largest Fuji bike customer, so combining the businesses is a logical strategic move.
“When we learned they were for sale, we were very interested,” said Cunnane, who spoke from a Performance store in Chapel Hill. “If another bike company bought them, we would potentially lose that business.”
And the closer Advanced Sports looked at Performance, the more synergies it saw – including an opportunity to sell Performance’s lineup of private label products overseas.
“They’ve never really done anything internationally,” Cunnane said. “We’re in 80 markets around the world. We don’t sell clothing. We don’t sell shoes. We don’t sell tools – all things Performance has made for them under their brand names.”
Advanced Sports has no plans to lay off any of Performance’s approximately 2,000 employees.
“Really, we’re planning to grow the business,” Cunnane said.
In addition to Fuji, Advanced Sports’ other bike brands include SE, Kestrel, Breezer and Phat.
Cunnane said that although he anticipates that Performance stores will probably stock more Advanced Sports bikes than it does now, they will continue to offer rival brands as well.
“They have to have what consumers want,” he said. “Part of their strategy and part of their success is offering multiple brands.”
Bicycle Retailer and Industry News estimates Performance’s annual revenue is between $275 million and $280 million.
Cunnane declined to comment on that report, but he did say: “Performance has grown a lot over the years. But over the last three years the industry has been relatively flat, and they have been relatively flat.”
In conjunction with the acquisition, Advanced Sports formed a new company, Advanced Sports Enterprises, which will oversee the wholesale business as well as the Performance retail operations. Cunnane also is the CEO of Advanced Sports Enterprises.
“These companies are going to be managed differently, but we’re going to cooperate,” Cunnane said.