RENO, Nev. (BRAIN) — President Donald Trump on Monday said he had approved tariffs on roughly $200 billion of imports from China, including about $1 billion in bicycle products.

In a statement, Trump said the tariffs will take effect on Sept. 24, at 10 percent until the end of the year, when they will rise to 25 percent. These tariffs are on top of current duties on bike imports. 

"Further, if China takes retaliatory action against our farmers or other industries, we will immediately pursue phase three, which is tariffs on approximately $267 billion of additional imports," Trump said. 

"As President, it is my duty to protect the interests of working men and women, farmers, ranchers, businesses, and our country itself. My administration will not remain idle when those interests are under attack."

The short time frame before the tariffs take effect means that suppliers will face an unexpected 10 percent charge on imports that are already in transit but arrive after next Sunday. 

The U.S. Trade Representative said safety products, including bicycle helmets, were among the 297 product categories removed from the list of proposed tariffs. The USTR said consumer electronics including as smartwatches, industrial chemicals, safety products, and child safety furniture like high chairs were exempted. 

This is the fourth round of tariffs to affect the U.S. bike industry this year. Tariffs on steel (of 25 percent) and aluminum (10 percent) took effect in March, raising material costs for U.S. manufacturers. In July, 25 percent tariffs on bearings and some GPS units took effect, and in August, Chinese-made e-bikes and e-bike motors were hit with a 25 percent tariff. 

Many members of the bike industry, organized by PeopleForBikes and the Bicycle Product Suppliers Association, testified against this round at hearings in Washington late last month. The tariffs hit virtually all bike related items out of China, including complete bikes, frames, components, tires, wheels, inner tubes, auto racks and some other accessories. Additionally, the tariffs affect some non-bike specific items that the industry uses, including hand tools, nuts and bolts, and other machinery. 

BPSA's president, Adam Micklin, told BRAIN, "The BPSA and PeopleForBikes are aware of the tariffs news regarding a possible reduction to 10 percent but we have not had a chance to fully review the list.

"We're going through the list now of the products and items affected as we realize this is critical information for our members," Micklin said. Micklin and much of the rest of the U.S. bike industry was in Reno Monday to attend Interbike.

Some domestic manufacturers of bikes and accessories support the latest round of tariffs, especially in light of the March tariffs on steel and aluminum, which benefitted their competitors who imported complete products. For example, Chris Fortune, the president and owner of Saris Cycle Group, wrote a commentary posted on BRAIN Monday in support of the tariffs. 

"These increased tariffs will help level the playing field for American manufacturers like Saris. We are not asking for special treatment, but rather for an equal playing field in a nondiscriminatory business environment. We are invigorated by competition and our commitment to American craftsmanship continues to serve us well. However, without these tariffs, we will be facing an unfair disadvantage. Our competitors will have cost advantages that will be incredibly difficult to overcome," Fortune wrote. 

Matt Moore, QBP's general counsel and a BPSA board member, said Monday that there was value in learning the news, which has been anticipated since last Friday.

"The certainty of knowing what the new tariff level will be is valuable in itself," Moore said. However, he said, "The timing of putting it into effect next Monday is insufficient time to adjust. It's unfair to businesses," he said.

Moore was among those who testified against the proposal in Washington. He said he specifically asked that helmets be exempted. "That's good news. At least we did something," he said. 

TRUCKEE, Calif. (BRAIN) — While the Northstar Free-Ride Festival got off to a slow start on Saturday morning with clouds, sprinkles and strong winds, by Sunday consumer traffic had gone up, and more dealers trickled in. Monday was "crazy busy" with vendors sending out dozens of demos.

Chris Cocalis of Pivot Cycles, which had a line of riders waiting for demo bikes every day, said the line at the booth got twice as long on the trade-only day. He said he was on track to hit more than 300 demos by the end of Monday, and sent out more than 200 demos each day of the festival weekend. Monday's demo, only open to dealers, ran from 8 a.m. to 6 p.m.

Other bike brands, including Cannondale, Haro, Mondraker, Devinci, Marin, Jamis and Canyon, also had lines and empty bike racks throughout the weekend. Some P&A exhibitors, however, felt traffic was slow, especially of consumers over the weekend.

Interbike show director Justin Gottlieb said that 93 brands set up tents in the lower parking lot of the Northstar California Resort, including many e-bike brands. He didn't have consumer or dealer attendance figures Monday afternoon, but felt the consumer festival was successful, and dealer turnout seemed high by Sunday evening.

"I can tell you we had our retailer reception [Sunday evening] and we had to turn people away," Gottlieb said, "and that room holds 150 to 200 people. Northstar had us holding people at the door because we were at max capacity."

Vendors said they saw dealers from far afield, not just California, with shop staff from Minnesota, Florida, Oregon, Virginia, Vermont, Ohio, Montana, Texas and Michigan testing bikes.

E-bikes were everywhere and a popular choice for riding up the mountain and avoiding the lift lines. Because of the variety of downhill trails available, attendees also opted for long-travel full-suspension rigs. Lines lengthened at the gondola lift, especially on Saturday, when high winds forced the resort to slow the speed of the cabins for safety reasons.

Stetina's Sierra Prospect road ride drew more than 300 riders on Sunday morning. Interbike's Gottlieb said he would like to offer more road events for novice to advanced riders next year so more people can participate. There's also room for improvement with signage, he said.

Still, Northstar as a demo venue hit it out of the park. Exchanging the arid Bootleg Canyon desert for an alpine setting in the Sierra Nevada met with unfettered approval from vendors and retailers for its riding terrain and cooler weather.

"We love this," said Todd Corbitt, road and drop-bar product manager for Jamis Bikes, about the new venue. "It's beautiful. Who doesn't like trees?"

It was a sentiment echoed throughout the three-day on-mountain demo.

"The venue is awesome. We're super happy," said Kervin Quinones of Qarv Imports, distributor of Spanish bike brand Mondraker, which took up a large booth since the brand wasn't exhibiting at the indoor show. "Riding is a lot better than Bootleg, too. We're happy to have the amenities."

Aside from lift-assisted riding, the Northstar California Resort also offered a slew of restaurants and bars, coffee shops and restrooms.

Northstar couldn't provide consumer ticket sales information, but communications manager Stephanie Myers said the resort was pleased with the crowds it drew for the first-ever Free-Ride Festival.

"Overall we're happy with the turnout," she said. "It was really exciting to see all of the brands set up and booths in full color and flags waving. It transformed the village into something it hasn't been before.The village was really busy, the demo was really busy, and the mountain was very energetic."

She said Northstar plans to continue to host the consumer festival in conjunction with Interbike in coming years, as well as the downhill and e-bike races.

"We're in the middle of negotiating next year for Northstar," Gottlieb said. "Overall we had a lot of great feedback and look forward to making it even better. We will be here next year."

RENO, Nev. (BRAIN) — Merlin Bikes is back, and just like in the 1990s, the brand has brought a crowd-pleaser to Interbike: the Newsboy.

Merlin showed off the first Newsboy at the show in 1994. That frame featured classic cantilever cruiser styling, combined with high performance materials and components. For many folks, the bike was an eye-opener, showing that performance bikes didn't have to lack style and whimsy.

One of those was John Seigrist, who had founded Dean Bikes in 1989. Dean's parent company, Janus Cycle Group, bought Merlin this year. Dean and Merlin titanium frames are now made in the same facility in Boulder, Colorado.

Seigrist remembered what it was like to see the first Newsboy. "I thought it was pretty cool. I had been in full race mode and thought of bikes as something to get from point A to point B as fast as possible. This was something different."

Merlin plans to make just eight of the reborn Newsboy frames, each with a custom numbered headbadge. The new frames are built for 29-inch tires, are suspension adjusted, and made for disc brakes. They featured tapered headtubes and Paragon "bullet" caps on the cantilever ends.

"It's modern, but not too modern," Seigrist said. The show bike features Merlin's one-piece titanium bar and stem and ti seatpost.

It took Merlin's Will Keener about a week to bend and miter the first frame's tubes, and Ari Leon spent about three hours welding it. Few of the frame tubes are straight, making mitering an interesting task. The cantilever tubes are especially hard to make because they have to match each other and are curved in two planes.

The limited-edition frames will sell for $5,000.

Merlin and Dean are each showing new frames and components at the Janus Cycle Group booth (Booth 2242). Janus is also the parent company of Velosport Imports, a distributor of products including Alan, Gios and Hersh bicycles, Floyd's of Leadville products and Alchemist carbon wheels.

Editor's note: A version of this story appears in the Day 2 edition of BRAIN'S Interbike Show Daily. BRAIN's story about Merlin's new ownership, from our June 1 issue, is also attached as a pdf.  

Editor's note: A version of this story appears in the Sept. 1 issue of Bicycle Retailer & Industry News.

DAYTON, Ohio (BRAIN) — In its 126-year history, Huffy Bicycles has proved time and again that the ability to adapt is embedded in its DNA. From world wars and the slow death of American manufacturing to the rise of mass retailing and the current retail apocalypse, the company, which got its start when founder George Huffman purchased manufacturer Davis Sewing Machine in 1891, has endured just about every market disruption of the modern era.

Huffy began producing bicycles in 1892, and by 1905 it employed 2,000 people at its factory in Ohio, which manufactured 600 bikes and 600 sewing machines per day. Although over the years it made lawn mowers, gas station supplies and other products, the one constant has been the bicycle.

Huffy president and CEO Bill Smith believes that society today has entered the fifth retail revolution. The first four included primitive marketplaces that after a few thousand years begat the general store, led to refrigerated transport and eventually to mass chain and discount retailing — and Huffy has been in existence just long enough to make it through, and thrive in, the last three.

And Smith has every intention of making sure Huffy survives today’s fifth revolution, spurred by a little gadget we all have within arm’s reach: the mobile phone. Smith believes its mankind’s biggest invention because it has equalized the world.

“The rich man in downtown Manhattan, the investment banker, has the same capabilities as the peasant in sub-Saharan Africa — all the same information,” he said. “All with a scale, scope and speed we’ve never imagined. It’s changed the way we get and consume information. It’s changed the way we all live in a way that nothing prior has been able to do. It’s set one pretty high bar.

“If you agree that the mobile phone is this great disrupter and great equalizer, and it isn’t a part of your business, if it isn’t integrated into your business as a focal point and the cornerstone of how you’re going to speak to your consumers and customers, you will fall behind. You won’t make it.”

But Smith admits that his own company is late to the party — which is why under his leadership, Huffy is in catch-up mode. And it’s fighting with a vengeance to make up for lost time.

“It’s difficult because of all the daily distractions to realize we are in the midst of one of the most dynamic, disruptive, change-driven retail revolutions that has ever occurred,” said Smith, who has helmed the company since 1993. “And we’re just in the beginning, nowhere near the end. So we have a sense of urgency, to not just get caught up but to become a leader for this in our industry.”

Huffy has invested several million dollars in the past 18 months to become more consumer- and tech-centric in order to ensure the company is around another 126 years. Smith said it’s not just survival instinct kicking in.

“That’s certainly part of it. But it’s that competitive instinct that we have, that we are going to be a part of what this new world is — to show the DNA of this company,” he said. “There are examples of that all throughout our history. For us, this is just another part of that history.”

A tipping or turning point?

Smith likes to say that retailing is tough, but frankly, bicycle retailing is tougher.

Citing data from Investors Business Daily, Smith painted a grim but accurate picture of the current state of retail and where it’s heading. With 3,000 store closings in about three years and an additional 6,000 more predicted to close in 2018, including the demise of 1,700 Toys R Us stores, Smith understands there are no guarantees.

“Sometimes you just have to stop and look at what’s happened in just 12 months. If you had told me a year ago that Toys R Us would be in liquidation today, I wouldn’t have believed it,” he said. “They were our No. 2 customer, so that’s a wake-up call.”

But even with the loss of Toys R Us, Smith projects Huffy will still end 2018 up from last year, in part due to several new initiatives the company currently has underway — all of which have transpired in about 12 months’ time. These include new distribution and products in categories Huffy has never entered, as well as huge investments in consumer-facing technology. It has also hired 26 new employees this year. In January, Huffy moved into a completely remodeled 60,000-square-foot building to accommodate the growth.

“We are going where the consumer is going. Our attitude is that we have a lot of important customers who pay the bills and feed a lot of families. If we’re not talking to our customers, if we’re not where our customers want to shop, wherever that is — Walmart, the IBD, online — if we’re not at that point of contact, and wherever they want to receive product, we become irrelevant,” Smith said.

Huffy will launch three new brands in the coming months, including Batch Bicycles, which will debut at Interbike. Batch Bicycles’ line will include adult and kids’ models designed for the IBD ranging in price from $89 to $499. The goal is to make it easy for both IBDs and the consumer to do business with Huffy, including fair margins, no minimums and a broad digital strategy to support purchasing and marketing efforts via apps and B2C and B2B websites. Batch will sell to consumers online, but pickup will occur at the IBD.

“It would be easy to say we’ll only do this online thing with Batch. We will have the apps and the tablets and consumers will have full, immediate real-time access to our inventory and our orders, but we will link consumers with dealers,” Smith said. “In the long run, this should be an incremental and complementary business for dealers. We are not naive. There are premium, venerable brands that are well entrenched. We’re not going to take those guys on. But we can bring a value to the marketplace.”

Huffy is aiming for Batch to be the bridge between mass and specialty retail — and he’s optimistic it will work, if the industry can begin to view the market through the eyes of the consumer.

“If we can get past some of the emotional baggage the whole industry carries in that ‘us versus them’ mentality. The consumer, they don’t understand that. To them, it’s a bike is a bike is a bike,” Smith said. “They want to buy an expensive bike, a midpriced bike or a value bike. They’re not thinking about this is one side of the market, and that is the other. We have to think more like consumers and that old baggage will go away.”

Huffy parent company UWHK Limited’s acquisition of Niner, which was completed in March, is another new initiative. Niner, which sought a buyer toward the end of 2017 after declaring bankruptcy, is Huffy’s first foray into the high-end mountain bike market, and an important part of the company’s plan. Huffy will continue to provide Niner with financial resources to forge ahead with product innovation, get engineering back on track and assure vendors that the company is in a position to grow.

Allite is a material sciences company Huffy will also launch at Interbike, and in 2019, a third new brand is slated to debut at Eurobike.

“This is the future, one of the pieces, and it’s an important one for us and for our industry,” Smith said. “But it’s not a philanthropic charity effort. We’re in it to make money. These initiatives are intended to change our business. It’s part of a concerted strategy to diversify our distribution, our products and our brand portfolio.

Keep moving forward

Because Huffy is a privately held company with no debt, it it is able to self-fund its new initiatives.

As a businessman, Smith hates overhead, prefers simplicity and believes in transparency and giving employees ownership. Monthly team meetings are held to walk employees through the financials so that everyone knows what’s going on in the business, why decisions are made and to have a sense of where the the company is going. Smith said seeing the numbers helps people understand the business, and more importantly, they can see how they can affect the numbers.

The headquarters’ open floor plan allows for departments that might normally operate separately to interact. While no manufacturing is done in the U.S. anymore, all design, sampling and prototyping are done on-site, where designers, engineers, product managers and salespeople work closely to execute ideas, and people are cross-trained. Huffy also doesn’t own its factories or warehouses because Smith wants maximum flexibility.

“When the market changes, I want to be able to change. I’ll partner with a factory and we’ll get real close, but I don’t want my hands tied. If you don’t have flexibility, it will get you,” he said. “That’s contrary to what a lot of people say about being vertically integrated, but it works for us.”

Huffy’s approach to its new brands is deliberate and fully committed. It’s not a side project assigned to employees to be worked on part time. Smith considers the new brands to be startup businesses that should be run as such.

“We are serious about it. They are separate subsidiaries. We’ve invested a lot of money in them and it’s not a marketing ploy. There are so many untapped markets in the U.S. for us, and once we identify the opportunity, we assign people full time, give them budgets so they can become this new business entity,” he said.

Huffy’s new brands will share some resources with their parent company, including financing, purchasing and its factories. But Smith is careful to not let the brands get “Huffyized,” which is one reason they are located in a separate wing at Huffy’s headquarters, with its own entrance and separate address.

“We want them to be standing with their own identities, taking what they need but having their own identities so they can develop their own cultures,” he said.

For Smith, these initiatives are a way for Huffy to have a more global perspective but to also connect with consumers. But it’s not just a way for Huffy to stay relevant as the pace of change continues to quicken. By the way Smith’s eyes light up when talking about Huffy’s future plans, it’s clear that he enjoys the challenge and the adventure of entering a new frontier. And he’s willing to take calculated risks to keep Huffy moving forward.

“Let’s rewrite the book and see what happens. We have a clean slate,” Smith said. “We can fix mistakes and go on. How often do you get to start a new business? It’s going to be fun.”

RENO, Nev. (BRAIN) — As the indoor portion of Interbike opens Tuesday, the first Interbike Show Daily of 2018 is available on the show floor at the Reno-Sparks Convention Center and available for online viewing at read.dmtmag.com.

The Daily is produced by the BRAIN editorial staff on-site. The first edition features a report on the weekend's OutDoor Demo at Northstar, the industry's reaction to the approval of new tariffs on Chinese bike products, and features on new products and companies at the show. In our Word on the Dirt section, we asked retailers their opinion of Interbike's new home in the Reno-Tahoe area. 

The Daily also includes the most up-to-date calendar of events happening Tuesday at the show. 

RENO, Nev. (BRAIN) — At Interbike Pioneer is announcing many changes across its line of power meters, including the addition of its own new headunit, a new mobile app, and the addition of its advanced pedaling metrics to Wahoo's GPS units.

Pioneer and Wahoo unveiled the changes at a preshow event Tuesday morning.

"We are pretty much replacing everything in our lineup," said Pioneer's Russ Johnston.

In an increasingly crowded — but still growing — product segment, Johnston said Pioneer continues to emphasize two key points about its line: the products'"bulletproof" durability and the power meters' ability to measure and display dynamic pedaling information. Pioneer measures force directions every 30 degrees, 12 times per crank rotation for each leg, and the company said that can help riders learn to pedal more efficiently.

On the hardware side, Pioneer continues to offer Shimano Dura-Ace and Ultegra road cranks outfitted with one or two power sensors. Between the various chainring sizes and crank lengths, Pioneer has 15 Dura-Ace SKUs and 15 Ultegra SKUs, in dual-sided or left-side only options. Pioneer also continues to offer kits so that riders who already own the Shimano cranks can add power sensors, starting at $500 for a left-sided kit.

The new power meters offer Bluetooth LE wireless connectivity as well as ANT+. They are now slimmer, to allow use on more bike models, including some Trek bikes that lacked clearance with prior generation of Pioneer meters. This generation also has increased its dust and waterproofing, now meeting the IP66 and IP68 resistance ratings.

Pioneer is now offering a mobile app that can setup and calibrate the power meters and install firmware updates.

While the Bluetooth LE addition allows riders to connect their Pioneer power meter to most headunits on the market, most head units will show only raw power figures, not taking advantage of the more advanced metrics. In the past, this has meant some riders used two headunits: Pioneer's original unit for power display and a separate GPS unit for navigation and other features.

No more. Now there are two options for riders wanting to see the full pedal metrics: Pioneer's own new GPS-equipped headunit and Wahoo's Elemnt headunits.

Besides the pedaling metrics, the new Pioneer SGX-CA600 headunit offers navigation, Strava live segments, Pioneer Training Assist coaching features and a 2.2-inch color LCD touch screen. It's compatible with Shimano Di2 and SRAM Red eTap and, like the power meters, the headunit boasts IP66 and IP68 water and dust resistance ratings and 12-hour battery life. It can be configured with the mobile app, and will retail for $359.

The Wahoo firmware works with its Elemnt and Elemnt Bolt GPS models. The Pioneer features are unlocked when the user pairs a Pioneer meter with the headunit. The features work on all previous Wahoo computers as well as new ones. The compatibility is also backwards-compatible on the Pioneer side: all previous Pioneer power meters will be compatible with the Elemnt. 

Aliso Viejo, CA—Highway Two and Abus Mobile Security are proud to announce a new milestone in their distribution partnership. Beginning in January, H2 will have the full range of the Abus Road and Mountain Helmets. 

President of Highway Two, Simon McNair on the partnership: “Abus has been an amazing partner for us over the last five years and we couldn’t be happier to distribute their new road and mountain helmets. We have been watching what they have been doing for a few years and their product line has become one of the best in the world. Abus has always been committed to quality and their helmets are no exception. The future looks bright for both of us with this collaboration!”

Norman Semmling, ABUS North American General Manager added “We are very excited to bring our road and mountain helmets to the United States. We are confident that Highway Two is the perfect partner.  Highway Two has already proven themselves distributing our locks and urban helmets and has a dedicated and motivated team to support the helmet launch.  

Our race helmets have been proven at the highest levels of racing, and our sponsorship of the Movistar Road Team and Kross Mountain Bike team have allowed us to test our helmets at the highest levels of professional racing.”

Highway Two is a joint venture between Continental Tires and Selle Royal distributing Continental, fi’zi:k ,Crankbrothers, Selle Royal, Brooks England, Kask, Abus, Knog and Osmo.

WASHINGTON (BRAIN) — A new bi-partisan bill introduced in the U.S. House would create a federal framework for collecting state sales taxes on online sales, as required by the U.S. Supreme Court's Wayfair decision in June.

Among other things, the bill includes an exemption for businesses that generate less than $10 million in annual U.S. e-commerce sales. It also would prohibit states from trying to collect retroactive sales taxes from sales prior to the June 21 decision.  It also prevents states from imposing sales tax collection duties before Jan. 1, 2019

The legislation is called the Online Sales Simplicity and Small Business Relief Act and was sponsored by Reps. Jim Sensenbrenner (R-Wis.), Anna Eshoo (D-Calif.), Jeff Duncan (R-S.C.) and Zoe Lofgren (D-Calif.).

The $10 million exemption would only apply until the states produce Congressionally-approved laws that would simplify sales tax collection to the point where the exemption would be unnecessary.

"This bipartisan legislation reins in the taxation free-for-all created by the Supreme Court's ruling in Wayfair," Sensenbrenner said in a statement. "Online sellers need clarity and stability in the sales tax arena. Our bill will protect small businesses and internet entrepreneurs from excessive regulatory burdens."

The bill is the third piece of legislation introduced in the House since the Wayfair decision.

RENO, Nev. (BRAIN) — With a 10 percent tariff hitting bikes next Monday, and an additional 15 percent being added Jan. 1, should retailers dig deep and order all the bikes they can before the end of the year?

KHS has launched a "Trump Tariff Buster" promotion at the show, giving retailers the opportunity to split the tariff increase with the company on China-made bikes they pre-order. 

Wayne D. Gray, KHS's vice president, said, "KHS believes in free trade, and we think these tariffs are the wrong move." However, Gray can adopt a diplomatic tone when needed. "I do hope they (the tariffs) are successful in encouraging Chinese authorities to adopt policies that are more favorable to the U.S.," he said.

Retailers note that suppliers have been encouraging orders to beat the tariffs since the e-bike tariffs hit in August.

"Giant is going crazy, sending out emails telling dealers to buy, buy, buy now. They really want us to stock up. They're famous for trying to front load customers so I take it with a grain of salt. What will happen is that sales that would have otherwise happened in November and December will happen sooner," said Stephen Newhall, the manager of Rob and Charlie's, a Santa Fe, New Mexico, bike shop.

However, some suppliers question whether retailers should commit more money to inventory for a variety of reasons. First, given the mercurial nature of the Trump administration, things could change any time.

Also of note: the Chinese currency, RMB, fell 8 percent in value recently, making Chinese parts 8 percent cheaper than a few months ago. Given that, the 10 percent tariff will have little impact on pricing — maybe a 2 percent hike to the end of the year.

Also, the tariffs impact so many consumer goods that consumers could take a conservative approach given the confusion and limit non-discretionary spending. In that environment retailers want to run very lean on inventory.

"The impact of these tariffs is huge, and this is not limited to the increase in pricing, it's already throwing our supply chain into disarray and at this point no one has any idea how this is going to play out," said Pat Cunnane, Advanced Sport Enterprises' CEO.

Bob Margevicius, the executive vice president of Specialized bike group, also suggested that stocking up would not be wise.

“Dealers know their business better than I do," Margevicius said. "If they are low on something they are selling then they should order how they usually do at this time of the year. Should they order more inventory because of the tariffs? If it was me I wouldn't make a business decision based on these tariffs until things settle down. No one knows what the impact of these tariffs will be.”

The tariff will apply to almost all mass market bikes, as well as entry-level and high-end IBD bikes from China.

For a taste of the chaos swirling around in the industry, consider the trip of a composite bike to a bike shop. Most carbon frames are built in China. Some are also assembled in China of parts made in China, Italy, Japan or Taiwan.

Some Chinese composite frames are finished, decaled painted and assembled in Taiwan, and according to Taiwanese law, the Taiwanese content in parts and labor qualifies the bike as "Made in Taiwan" that dealers see stamped on the boxes they receive from various suppliers.

The big question for many suppliers is how will the new tariffs impact pricing of these bikes. The traditional understanding in the U.S. of a bike's point of origin is where the frame is made. So will U.S. Customs ignore the "Made in Taiwan" labeling on a composite bike box and slap the 25 percent tariff on the composite frame portion of a complete bike? Or will they levee the 25 percent tariff on the complete bike, even though it's Japanese components have a higher value than the frame?

For an aluminum mountain bike with a frame and most components made in Taiwan, but with Chinese tires and tubes, will U.S. customs deem the Chinese content below some threshold and not apply the tariff? Or will just the Chinese content of the Taiwanese bike be tariffed? Will suppliers have to provide a complete component manifest of the point of origin of each individual part?

"Since building a bike takes components manufactured in a variety of countries, the big issue is what constitutes as 'Made in China,'" said Margevicius.

And he notes that there are additional penalties associated with "circumvention" of the new tariff rules. Circumvention is when importers attempt to obscure a product's point of origin.

"Right now we do not know how this administration defines circumvention. A bike's point of origin is not necessarily clear because it is made from components from so many sources. It is an extremely confusing time right now," Margevicius said.

One thing is certain, suppliers are doing what they can to limit Chinese content on their bikes. Tire makes like Thailand's Vee Rubber and Japan's IRC say people were setting up appointments the first day of the show to talk about product sourcing and private label business.

"They are the appointments you want," said Jason Rico, Vee Rubber's North American sales manager. "They need a manufacturer for their tires outside of China. From the conversations we've already had it is looking to be a great year for the company," he added.

In part the tariffs were to drive business to U.S. companies and support domestic manufacturing, but in the short run they are doing the opposite.

"In the bike industry you cannot onshore production overnight," said Arnold Kamler, Kent International's CEO. "While I've created 167 bicycle related jobs over the last few years these tariffs are going to endanger those jobs, not give them job security," he added.

Kent assembles its bikes, including its new IBD-targeted Univega bikes, in South Carolina, of mostly Chinese sourced parts. Come Jan. 1, those frames and components will become 25 percent more expensive. A price hike like that may have parents looking for cheaper options for their kids, or new adult cyclist might conclude cycling is too expensive to try.

Kamler and Zak Pashak, Detroit Bikes' president, note that there is growing interest in their assembly operations. And not necessarily because there is cost savings.

"Many people are looking around for Plan B, looking for options given all the change that is happening. Making things in the U.S. is one of the options they want to explore," Pashak said.

A version of this story appears in BRAIN's Interbike Show Daily, Day 2, which is available at Interbike Wednesday, or for download at read.dmtmag.com.

RENO, Nev. (BRAIN) — Interbike exhibitors based in North and South Carolina said their workers and facilities largely escaped damage from Hurricane Florence. BRAIN is still trying to contact coastal retailers who may have been affected.

Companies from that region report that aside from adjusting their travel plans, they saw little to no damage from flooding or storm winds.

“Our South Carolina factory is 70 miles inland, so our only fear was about flooding,” said Arnold Kamler, CEO of Bicycle Corporation of America, which operates a factory in Manning, South Carolina. “But the powerlines didn’t get knocked down. We furloughed workers on Thursday and Friday so they could prepare their homes. But the factory was up and running yesterday morning,” he said Tuesday.

Defeet’s Shane Cooper said he was fortunate the storm stayed south, so his company, headquartered in Hildebran, North Carolina, wasn’t affected.

“In Chapel Hill there was a lot of flooding in the streets,” he said. “It mostly stalled out our North Carolina guys who couldn’t fly out Sunday because they didn’t want to drive in hurricane weather. I left two guys home and three came out early.”

Industry Nine is based in Asheville, North Carolina. US sales manager David Thomas said the hurricane dissipated as it approached their location. Still, all flights out of Asheville were canceled on Sunday.

“We saw it coming and flew out of Atlanta instead,” Thomas said. “With us in the mountains, it rained but we didn’t lose power. I left on Sunday and we have no damage to our office. We shut down certain things but were not impacted.

“We prepared customers. We said we might have delays in shipments,” Thomas added.

Serfas, based in Arizona, has a warehouse in North Carolina. Serfas GM Erik Braucht said the warehouse manager had to take a boat to the facility on Saturday to inspect it. But he found everything was above water and there was no water in building.  

"They still have no clue as to when they will be able to get back to the building by car as there was 40-plus inches deep of water when they took the boat," Braucht said. For now, Serfas is shipping all orders from Arizona. 

RENO, Nev. (BRAIN) — Bicycle Retailer & Industry News has promoted Steve Frothingham to editor in chief of its magazine and website.

Lynette Carpiet, who has been editor since 2011, is leaving the magazine to pursue new opportunities. Carpiet steered the editorial direction for BRAIN for the past seven years, working under publishers Marc Sani and Megan Tompkins.

"I've had an incredible run at BRAIN and I'm thankful for the opportunity I was given to learn the bike industry and become part of such a great community," Carpiet said. "I feel so privileged to have worked with a talented group of editors through the years. While publishing and the bike industry are going through an unsettling time, I can't think of a better team to take BRAIN into the next phase. I will be rooting for them all the way."

Marc Sani, BRAIN's interim publisher, thanked Carpiet for her devotion to BRAIN. "Lynette has been a strong and tireless leader and journalist and has helped maintain BRAIN's editorial standards through many long days and weeks putting out a top-quality trade magazine 18 times a year — no easy task. We are grateful for all her work and we all wish her the very best in her future endeavors."

Carpiet will remain with BRAIN until the end of the month.

Frothingham has been BRAIN's web editor for seven years and is in his second stint at the magazine. He wrote several articles for BRAIN's first issue in 1992 while also working at a Santa Fe, New Mexico, retailer full time. He later joined the staff, eventually becoming managing editor and then executive editor. He left BRAIN in 1997 and worked for news organizations including The Associated Press and VeloNews before rejoining in 2011. He can be reached at sfrothingham@bicycleretailer.com.

RENO, Nev. (BRAIN) — Catrike is launching the entirely new Eola model at Interbike this week.

"Eola captures the passion and engineering of Catrike in a sleek, modern design. Built with a purpose, the Eola features a lightweight alloy frame, 20-inch wheels and the latest drivetrain technology that creates a nimble and spirited ride," the Florida-based company said.

The Eiola features a Catrike-engineered Space Frame and adjustable Peace Boom. Component highlights include an FSA Omega crankset with a 42-tooth MegaTooth chainring mated to a SRAM NX rear derailleur, shifter and 11-speed cassette. The Eola uses Avid mechanical disc brakes and Catrike locking brake levers. Like all Catrikes, it comes with a padded mesh seat, clipless pedals, rear fender, computer sensor mount, flag and flag holder, USB rechargeable flashing tail light for increased visibility and a removable accessory bag.

The Eola comes in three new colorways, Go Mango, Sky Blue and Storm Grey. Anodized gray wheels, control assemblies and matching Peace Boom accent all three colors. 

It's on display at Interbike in Booth 3837.

RENO, Nev. (BRAIN) — Alexander Julian is one of the best-known American designers, known for his Colours brand and his wardrobe designs for TV shows and movies. Less known is that Julian has long ties to bicycle retailing: In the 1930s his father ran Julian's Cyclery in Chapel Hill, North Carolina, before opening a well-known haberdashery.

"I was the lucky kid who never had a problem getting his bike fixed," Julian told BRAIN at Interbike this week.

Even as he developed a global reputation in design, Julian has retained a connection to cycling, athletics and North Carolina, where he still lives. In 1988 he designed the trend-setting teal and purple uniforms for the NBA's Charlotte Hornets and later designed uniforms for the University of North Carolina Tarheels.

Now Julian has designed a line of items with North Carolina's Defeet, best known for its socks. Defeet (Booth 2619) has applied Julian patterns, including some argyle designs, to underlayer jerseys and socks. One new sock design is based on a men's tie pattern Julian once designed.

Defeet uses sublimation to bring the patterns to high-tech materials, sometimes creating odd optical illusions. Defeet owner Shane Cooper was wearing a high-tech sleeveless underlayer over his shirt Tuesday that, from inches away, looked like a knitted wool sweater vest.

It's all about bringing some much-needed style to athletic wear, Julian said.

"I'm the Johnny Appleseed of fashion," Julian said Tuesday. "I'm sort of the guy who brought sportswear into sport."

Julian, who has designed cycling jerseys for Chapel Hill-based Performance Bicycle in the past, was walking Interbike this week looking for opportunities to bring his design sense to more items.

"We're looking at helmets, pedals, chains, tires, whole bikes," he said.

Editor's note: A version of this story appears in BRAIN's Interbike Show Daily, Day 3. 

RENO, Nev. (BRAIN) — For the first time since it began selling lugged steel custom bikes in 1994, Rivendell Bicycle Works is exhibiting at Interbike. The company, which is based in Walnut Creek, California, has historically sold mostly consumer direct, first by catalog mail order and later online. But a handful of shops sell Rivendell, and founder Grant Petersen said he's here at the show to connect with a few more.

"It's only my second or third Interbike in 24 years. The show is close to home and an easy trip, but I'm also really proud of our bikes. People like them and don't often get to see them," said Petersen, who worked at Bridgestone for 10 years before starting Rivendell. "If a dealer really likes them and it strikes a cord, it could work out. We've never not had dealers, but our bikes are antithetical to the kind of bikes dealers usually sell. They want, generally speaking, bikes they don't have to explain."

Rivendell is known for bucking trends with lugged steel-framed bicycles, wool clothing, cotton bags and leather saddles. Petersen doesn't do carbon, electronic anything, suspension or disc brakes. Instead, he builds what he calls "contemporary, functional, wonderful bikes."

"When I started Rivendell I knew the kinds of bikes I liked and wanted to do. They aren't retro but they're not trendy or popular. I'm not going to build generic bikes. I always fought that a little at Bridgestone," he said. "The bikes that dealers thought were too funny to buy sold well with customers who would call asking for them. It was a frustrating situation."

Rivendell works with builders in the U.S. and two small factories in Taiwan to produce five models, including the best-selling Atlantis touring/"all-rounder," the A. Homer Hilsen fat-tire road/"country" bike that accommodates up to a 40-millimeter-wide tire with fender, and the Clem Smith Jr., which is a less-expensive TIG-welded all-around bike similar to the Atlantis.

At Interbike, Petersen is launching the Gus Boots-Willsen. Designed for off-road/trail/hill riding (Petersen hates categories, so don't call it a mountain bike), the "Boots" frame can fit up to 2.8-inch tires and will be available either fillet brazed or TIG welded. Like all of Rivendell's bikes, the Boots is fully rigid and not designed for racing but for fun and efficient travel.

"Our bikes are a little quirky, and it takes riding them, being educated and talking about them with enthusiasm and freedom to sell something different," Petersen said. "We have a good reputation and haven't screwed anyone over. People can buy with confidence."

Rivendell employs 13 people and operates out of a 6,000-square-foot warehouse that includes a 1,000-square-foot showroom where it sells bikes, accessories, tires, racks, books, lights, fenders and bags. Its Sackville bike bags are made in collaboration with a company founded by former bag makers from Coach and Dooney & Burke. The bags are designed for Rivendell and made in Connecticut. They are also on display at Rivendell's booth.

Petersen is also giving away 200 free copies of his book "Just Ride"— one per shop until they are gone at Booth 2467.

Editor's note: A version of this story appears in BRAIN's Interbike Show Daily, Day 3. 

RENO, Nev. (BRAIN) — In light of the new 25 percent tariffs approved by President Donald Trump this week, bike industry groups are ramping up their lobbying calling for a reform of the de minimus value — the minimum value of an imported shipment that is subject to U.S. duty collection and Customs documentation.

Individuals who buy goods from overseas don’t have to pay duties on shipments valued at less than the de minimus, which is currently $800. With existing tariffs of 5 to 11 percent, and upcoming tariffs on Chinese goods of 25 percent, that gives the foreign sellers up to a 36 percent head start over U.S.-based vendors, not even counting state and local sales tax.

The Bicycle Product Suppliers Association and PeopleForBikes are actively lobbying in Washington to lower the minimum, which was raised from $200 to $800 last year, said Specialized's Bob Margevicius, who spoke at a BPSA Supplier Seminar at Interbike on Wednesday. A change to the de minimus requires congressional approval, he said.

Besides endangering jobs in the U.S. bike industry, the current program makes it easier to import unsafe products that don't meet U.S. standards or that are counterfeit.

Compared to the minimus in other countries, the U.S.’s $800 looks unfair, as well. Canada’s de minimus is $15, Mexico’s is $50 and China’s is less than $10.

But Margevicius said the "outlook for long-term change to de minimus is pretty dim. There are a lot of powerful lobbyists who are involved [who oppose a change]." They include delivery companies like FedEx and UPS, large online vendors like Amazon and Alibaba, and even the U.S. Customs and Border Protection agency. "It's a very strong lobby group and they are fighting even to increase the de minimus beyond $800," he said.

In testimony in Washington last month, ASE's Pat Cunnane called for lowering the de minimus to $50. Cunnane told the U.S. Trade Representative and other members of the multiagency Section 301 Committee that the current de minimus harmed his business and would be even more damaging if the tariffs were approved. ASE is the parent company of retail chain Performance Bicycle and distributor ASI.

Several members of the committee questioned Cunnane about his proposal, and he followed up with a letter to U.S. Trade Representative Robert Lighthizer.

"With the existing tariff of 11 percent on most bikes, and 3 to 8 percent on many other parts and accessories, I am already at a substantial disadvantage to overseas retailers that sell bicycles to Americans without paying any duties," Cunnane told Lighthizer in the Sept. 6 letter. "An increase of 25 percent to the existing 11 percent tariff on complete bicycles would make this competitive advantage insurmountable."

Cunnane sent Lighthizer an image from U.K.-based Chain Reaction Cycles' website promoting the lack of duty collection on orders under $800.

Cunnane also CC’d the letter to nine U.S. senators and representatives.

BOULDER, Colo. (BRAIN) — Boulder Cycle Sport and Boulder Nordic Sport are merging their business operations.

Boulder Cycle Sport launched in its current North Boulder location in 2005 and rented space for Boulder Nordic Sport to launch the following year. Both companies experienced rapid growth that required expansion, with BNS moving to its own location in 2007, expanding to Portland, Maine, in 2009 and Minneapolis in 2014.

BCS expanded to a North Boulder Service Center, then added a South Boulder location in 2010 and built out a Central Boulder location in 2015. 

"Our companies have worked alongside one another for 12 years with parallel goals and challenges. This merger is a powerful way to combine strengths, mitigate seasonality, and focus on what we are all passionate about - helping people have fun with two amazing sports," said Boulder Nordic Sport founder Nathan Schultz. BCS' founder, Taro Smith, added "We are
overjoyed about the potential this brings to both companies in our mission to promote a healthy and active lifestyle. Joining forces creates new paths to navigate through the evolution of retail while simultaneously supporting our customers, vendors and team."

BCS and BNS will continue to operate as individual entities under a new parent company, Boulder Sports LLC. Schultz is the CEO and managing partner for the parent company and BNS, with Justin Hoese remaining the GM/partner in the bicycle division.

"There are a lot of strong reasons for this merger, " Schultz said. "What excites us most is that this opportunity empowers both companies to put more energy into customer service, while improving the products and services we bring to our customers and community. We are looking forward to seeing all that we will create together."

ASOLO, Italy (BRAIN) — Selle Italia has hired business development firm Lucidity to help it expand in the U.S. market. The Italian saddle brand is opening a warehouse, and sales and marketing office in Carlsbad, California.

Vittoria North America and other distributors will continue to sell its saddles. Selle Italia North America will have inventory available to support these distributors as well as shops who choose to work directly with Selle Italia. Selle Italia said the goal is to make it as easy as possible for dealers to buy and Selle Italia product.

Selle Italia owner Giuseppe Bigolin said, "When we started in this business, there was no television, no internet. We relied on distributors to buy and sell our products in their countries. What we did in Europe had no impact on the United States. The internet has changed that. Every person in every country knows what other countries are doing. In order to sustain the brand equity, and most importantly to respect the brand message, we must work more closely with all our partners in the sales chain. Lucidity will help us do this as well as drive marketing, social media, after sales service, community engagement and PR."

"Our mission is to help great companies like Selle Italia have a more direct impact and control over the North American market," said Richard Wittenberg, chief solutions officer of Lucidity. "We will actively market, sell and support the brand here in North America, making sure that everyone knows Selle Italia is the best saddle on the planet. We will ensure that consumers can get the saddle that want, where they want it, how they want it."

In addition, Selle Italia will partner with 20 to 30 shops in North America to provide saddle fit, extending its premium store network which it started in Europe. These stores will stock a wide away of saddles and fitting tools and receive special pricing, terms and consumer leads.

"We have to drive demand for the brand," said Nicola Baggio, sales and marketing director for Selle Italia. "The days of just putting saddles on a wall are gone. We are a saddle company, not a bike company. That means we have to create a better experience for all riders regardless of the brand of bike they ride. We also have to create a clearer connection between the brand, the product and the consumer among each of the different sales channels. Our new structure will help us accomplish this."

For more information, contact Richard Wittenberg at Richard@Lucdidtybizdev.com.

RENO, Nev. (BRAIN) — The second annual Interbike Innovation Awards were decided Thursday at Interbike. The Interbike Innovation Awards showcase excellence in product, retail, advocacy and exhibitor booths. Product-specific awards were distributed across the mountain, road, e-bike and triathlon categories. Interbike partnered with Hi-Torque Publications to evaluate and select the winners in mountain, road and electric. All triathlon product award recipients were selected by Triathlete Magazine.

Ten Retailer Innovation Award winners were chosen by Bicycle Retailer And Industry News, The Mann Group, The National Bicycle Dealers Association and Interbike. The winning retailer implemented innovative ideas and strategies to their business with positive results over the past 12 months.

Booth innovation and design awards were led by editorial staff from Exhibitor Magazine, the monthly business-to-business magazine featuring best practices in trade shows and events.

The awards were distributed as follows:

Road Product Innovation

Bianchi E-Aria
Reform Road Saddle
Hope RX4 Disc Brake
Pioneer CA600 Computer

Ebike Product Innovation

Bosch Power Tube
Pivot Shuttle

Mountain Bike Product Innovation

Pivot Firebird 929
Shimano ME5 Shoe
Leatt DBX 4.0 Helmet
Oakley DRT5 Helmet
Enduro Bearings 12 speed pulley

Triathlon Product Innovation

Phoenix 2.0 hub system
Elite Nero Smart Rollers
Stompump

Retailer Innovation

Topanga Creek Outpost - Topanga, CA
Babcock Bicycles - Endicott, NY
Level 9 Sports - Woods Cross, UT
Wheelhouse Detroit - Hamtramck, MI
Aaron's Bicycle Repair, Inc - Seattle, WA
Absolute Bikes Salida - Salida, CO
Bloomington Cycle and Fitness - Bloomington, IL
Outback Bikes - Atlanta, GA
Frisco Bike Shop - Willard, MO
718 Cyclery - Brooklyn, NY

Booth Design and Innovation

Ride Concepts
Osprey
Thule

BOZEMAN, Mont. (BRAIN) — Terrene Tires has introduced the Johnny 5, an extreme soft conditions tire.

The Johnny 5 is a 5-inch wide large-paddle tire created to float well and give the most traction possible on soft surfaces. 

The Johnny 5 tread pattern includes scoops for traction and braking in all zones of use: center, transition, and cornering. It also has 320 pockets for ice studs. 

"With Terrene's proven experience designing and building top performing tires, the addition of Johnny 5 helps to round out their fat tire line with the burly float and traction platform that fat tire riders have been asking for from the beginning," the company said.

Johnny 5 will be available in October in both non-studded and studded versions, for $140 and $260, with additional stud packs available separately.

More information at terrenetires.com.

WASHINGTON (BRAIN) — The outdoor industry grew faster than the overall economy in 2016 and accounts for 2.2 percent of the GDP, according to updated stats from the Outdoor Recreation Satellite Account released by the U.S. Department of Commerce's Bureau of Economic Analysis.

The study found the outdoor recreation economy totaled $412 billion in 2016. In data produced for the first time, using inflation-adjusted GDP, the outdoor recreation economy grew 1.7 percent in 2016, 0.1 percent faster than the growth for the overall U.S. economy. In addition, real gross output, compensation, and employment all grew faster in outdoor recreation than in the overall economy in 2016.

The new stats are updated to include refinements in methodology and presentation incorporated by BEA after receiving public feedback to the prototype statistics released in February. 

Boating/Fishing was the largest core outdoor recreation activity in 2016, accounting for $36.9 billion of real gross output. That year's bicycle-related output was measured at $3.42 billion in 2012 dollars, up 3.6 percent from 2015. 

More information: bea.gov/news/2018/outdoor-recreation-satellite-account-updated-statistics-2012-2016