Along with the bicycle boom in the 70s of the last century, more companies producing bicycles were established. One of them was Trek, founded by Dick Burke, president of Roth Co., a Milwaukee-based home appliances and electronics distributor, and Bevill Hogg, owner of a chain of bicycle stores, one of which was located in nearby Madison.
After receiving financial support from the parent company of Roth Co. – Intrepid Corporation, Wisconsin, Gentlemen, Launch Trek Brand Production In An Abandoned Warehouse In Waterloo, Wisconsin.
The company initially had five employees and started producing high-quality lightweight steel bicycle frames by hand. What made Trek stand out from the beginning is the way it distributes its products. Bicycle sales were mainly made through specialized bicycle shops rather than general retail outlets, so the image was built from the outset as products for true cycling fans.
Trek quickly became a favorite in this connoisseur’s market, and independent bike shops remained Trek’s number one selling point.
The company grew rapidly and competed bravely with its competitors, mainly from European countries and Japan. Trek gained particular popularity in the Midwest of the USA, but as early as 1978 it was available from East to West America, achieving annual sales of as much as $ 750,000.
Even before the 1980s, Trek had become more powerful than its parent company. After moving to new production facilities in Waterloo, mass production of bicycles began. Sales grew by an avalanche (at least doubled year-to-year), so the company’s management decided to outsource the production of some of its models to a Taiwanese company.
The breakthrough for the Trek brand was 1983, when it was decided to enter the mountain bike market. As it was only the beginning of an era of more comfortable seats, the thicker 850 tires Trek dominated the 850 model completely. In 1984, sales of 45,000 bicycles were achieved, the major part of which was mountain bikes. Also in 1983, Trek began producing components.
During this period of its existence, Trek was one of the few US companies to resist moving all production to Taiwan. While the costs associated with manufacturing in the US were initially significantly higher, the company stated that it was able to offset the cost difference between domestic and Taiwan production through savings on shipping and the liquidation of numerous middlemen. In addition, work at Trek had the status of a hobby and very enjoyable, which made many employees agree to a lower salary and rather modest salary. Thanks to this and thanks to the constant development of the company, it was able to rely on import less and less over the years.
Following a conflict with the co-founder, Hogg left Trek in 1985 to start his own bicycle business in California. Despite the changes, the company continued to grow at an impressive pace. In 1985, the company introduced the first aluminum city bike, the 2000 model, and in 1986 the first composite city bike, the 2500 model. In 1986, sales increased to $ 16 million.
However, ten years of surprising growth did not come without problems. While sales remained solid, Trek began to experience difficulties in many areas. As a result, Burke returned to operational work with a “Back to Basics” approach, emphasizing sound business practices and service quality. His new mission statement had four components: “Produce a quality product at a competitive price, deliver it on time in a positive environment.”
Burke’s new approach quickly paid off – productivity and marketing increased, and Trek’s unwavering reputation breathed new life into the company.
Sales doubled in each of the following three years. In 1987, Trek successfully introduced a new line of mountain bikes, and their popularity helped the company sell a total of around 100,000 bikes in 1988.
At the end of the 1980s, Trek expanded its assortment with, among others: bicycle clothing, stationary bicycles (Trek Fitness), a line of children’s bicycles (Jazz) and opened its first foreign branches in Great Britain and Germany. In five years, export accounted for 35% of the company’s activity.
Trek sales increased to approximately $ 175 million in fiscal 1991, and the company employed approximately 700 employees during that time.
The early 1990s are a constant battle for Trek to lead the way in technology. Throughout the 1980s, the company actively developed advanced materials, which over time made it possible to achieve maximum lightness combined with durability in the production of frames. The breakthrough in this respect was the year 1992, when the optimal carbon fiber lamination process was developed.
Using the OCLV process, Trek was able to produce the lightest production frames in the world, weighing just 1.11 kg. Trek’s first carbon bike was the Model 5500, which was launched in 1992, and the first OCLV mountain bikes, the 9800 and 9900 models, were introduced a year later.
The beginning of the 90s was also the saturation of the US bicycle market. The priority was taken over by export markets such as Japan, where sales grew by approximately 40% in 1991. Starting in 1993, Trek sales in Europe also began to increase.
In addition, the company began to focus more on selling bicycle accessories. Beginning in 1992, Trek was assembling helmets from parts purchased from other companies at a new facility in Wisconsin. Until 1993, the plant was producing helmets at a rate of about half a million a year, and in 1992, Trek also launched a small line of tandem bicycles.
In 1993, Trek acquired the Gary Fisher Mountain Bike Company, the company that started mountain bikes around the world. Gary Fisher’s sales increased tenfold in the first year of the growing Trek empire, from $ 2 million to $ 20 million. In total, the company’s sales reached $ 230 million in 1993. This growth can be assessed as spectacular considering the time has come. Trek has become the market leader in the sale of specialized bicycles. During this time, exports generated $ 80 million in sales, and the company already operated seven export distribution centers – one in Japan and the other six in Europe.
Trek surpassed the $ 250 million mark in sales in 1994. Until then, the company manufactured 65 different models at its Wisconsin facilities, including road, mountain, hybrid and tandem bikes. Trek has expanded its children’s bike business this year with a line called Trek Kids. In 1995, many important events took place at Trek. That same year, the company opened a new, state-of-the-art manufacturing facility in Whitewater, Wisconsin. The Whitewater plant, capable of producing 3,000 bicycles a day, overshadowed the company’s other factories.
ACQUISITIONS IN THE MID-90’S
Trek also acquired two smaller competitors in a niche market in 1995: Bontrager Bicycles, based in Santa Cruz, California, and Klein Bicycles, of Chehalis, Washington. These companies’ plants continued to operate after Trek’s purchase. In addition, the company’s marketing department signed a ten-year licensing agreement with bicycle racing superstar Greg LeMond to use his name on the road bike line. In addition, Trek has introduced a new line of mountain bikes with an innovative Y-frame. Trek’s Y-frame has received an Outstanding Design and Engineering Award from Popular Mechanics, and the US Secret Service has even purchased several Y-frame bikes to patrol the White House grounds.
n 1995, Trek’s revenue grew to $ 327 million, largely thanks to mountain bikes. In 1996, Trek revealed that it had partnered with Volkswagen of America to form a professional cycling team. The partners even went one step further and launched the Volkswagen Jetta Trek, a car that was equipped with a mountain bike and a stand.
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