What Happened to Stages Cycling?

Summary

Stages Cycling LLC in the US filed for Chapter 11 bankruptcy in June 2024. SPIA Cycling Inc., a subsidiary of Giant Group, made an initial bid of $20 million for Stages Cycling's assets in July 2024. The acquisition was finalized in September 2024 for $20.1 million.

The assets purchased by SPIA Cycling Inc. include Stages Cycling's intellectual property, manufacturing facilities, product lines, and limited inventory. The terms of the purchase agreement included Giant Group dropping its lawsuit against Stages for $14 million in unpaid invoices and paying $500,000 to Norwegian software companies TekSport AS and VismoX AS.

Additional Details

1. Giant Group bought Stages US intellectual property and trademarks in September after Stages filed for bankruptcy earlier in 2024. The status of Stages' European operations remains unclear.
   
   
2. Many countries have local distributors who offer sales, parts and service. These organizations are not directly affected by the US bankruptcy although it appears they are not getting new parts. They are servicing customers with whatever inventory they have on hand.
   
   
3. Giant paid only $20.1 million for selected Stages US assets. Existing customers are liabilities. Warranty claims and related parts could easily cost Giant much more than $20 million. It is entirely possible Giant will choose to not support existing Stages customers. Hopefully we will hear more soon.
   
   
4. Stages laid off all of their Boulder CO employees in April. This makes it difficult to restart manufacturing or product development. It could mean no new parts forever. It also means that online services for firmware updates and app login could disappear. So far, online services are still running although there have been occasional outages in the last few months.
   
   
5. Former Stages executives were hired by Giant in May 2024. They were no longer employed by Stages when Giant acquired Stages bankruptcy assets in September. As such, they have no connection to existing Stages customers.

Timeline of Stages Cycling Bankruptcy Events

January 2023: Giant Group agrees to buy 32.5% of Stages Cycling for $20 million.

Late 2023 - Early 2024: Consumers notice difficulty purchasing Stages products.

April 2024: Stages Cycling stops operations, laying off all 40 employees in Boulder Colorado.

April 2024: AIPS TECHNOLOGY CO., LTD (a Giant division) files a $14 million lawsuit against Stages for unpaid bills.

June 2024: Stages Cycling files for Chapter 11 bankruptcy protection.

July 2024: SPIA Cycling Inc. (Giant subsidiary) makes initial $20 million bid for Stages Cycling assets.

September 19, 2024: Judge approves SPIA Cycling Inc.'s purchase agreement for Stages Cycling assets.

September 2024: SPIA Cycling Inc. finalizes acquisition of Stages Cycling assets for $20.1 million.

Statements from Giant Group:

Donald Yu, President of SPIA Cycling Inc.: "We are thrilled to integrate Stages Cycling's assets into our organization. This acquisition aligns with our strategic goals and enhances our capabilities in both indoor and outdoor cycling. We are committed to leveraging these assets to drive innovation and deliver greater value to our customers and stakeholders."

Paddy Murray, VP of Global Sales and Marketing of SPIA Cycling Inc.: "We're thrilled about the opportunities this acquisition presents and the benefits it will bring to Stages Cycling's dedicated customers. Our priority is to ensure a seamless transition while revitalizing the Stages brand to address both current and future customer needs."

Giant Group statement: "The acquisition will support the Giant Group's vision to create a comprehensive indoor/outdoor cycling ecosystem, enhance its cycling data capabilities, and enter the commercial fitness market, where it has a 30-year history of manufacturing for other brands."

Distribution and Support

Most countries outside of the US have independent partners who handle SB20 distribution and servicing.

A notable example is Saddleback Ltd. They are the Stages SB20 distributor and service provider in the UK. They are an independent company with no organizational ties to Stages. They have an inventory of spare parts and are willing to help existing UK customers. To the best of my knowledge, they will not provide parts to customers in other countries.

In Canada, where I live, a company called Outdoor Gear Canada handles SB20 servicing. They appear to have a limited supply of spare parts but are unwilling service Stages customers at this time. I think the former Stages LLC owes them money.

The status of Stages subsidiaries and partners in other countries remains unclear. The Stages Cycling LLC bankruptcy affects only the former US head office in Boulder CO. Product development and US support was also done from this office. All employees, including management, were abruptly laid off in April 2024 so there is little hope that these organizations will be salvaged.

My Personal Comments

IP and Assets Only

Stages does not appear to be buying the power meter or indoor bike development business. This is consistent with the apparent firing of all Colorado employees in April. A number of Stages executives also left for Giant at the same time . This prevents them for re-entering Stages premises or accessing assets. It will be next to impossible to resurrect the Stages manufacturing and customer support businesses without former core employees or their bosses.

Online Services

There is a request by Spia Cycling to keep Stages Cycling online services running along with paying the utility bills and lease for the Colorado offices. The implication is: The value of the Stages brand and IP will be diminished if online services are abruptly terminated or if the sheriff confiscates assets for non-payment. It is unclear if online services or assets will be needed after the ™️ and patents have been acquired. 

Statements about Stages in the Future

Here is an additional statement on the US Stages support site since October 2024: 

I'm not sure how to read this. The first paragraph mentions only "acquisition of Stages Cycling brand assets". Customers are liabilities. The last paragraph asks us to "support the brand". I might be overly skeptical but I don't see anything that says existing customers are on the radar. You could interpret the entire post as: "We bought the Stages trademark and will be launching new Stages branded products in 2025"

A related story says the amount on inventory included the Giant purchase is $7M. 

Questions I have: What percentage of the $7M number is power meters, bike computers, studio bikes and SB20s? How many of these parts are fully assembled?

Consider that it could cost more than $7M to resurrect manufacturing and add a support organization for old products. The above post implies these costs could be the responsibility of the "previous owner".

IMHO: It would be better for everyone involved if Giant answered a few questions rather than adding new ones 😁.

Links to Content

This post has numerous links to sources. Click on each link above to see the related content.

Here are a few more:

Bankruptcy court approves Giant Group’s purchase of Stages

Giant making bid to buy Stages Cycling from bankruptcy for $20 million

Stages Cycling lays off entire workforce

SPIA Cycling Inc Acquires Assets of Stages Cycling Brand