Report: Cycle Gear to Acquire RevZilla?

02/08/2016 @ 10:12 am, by Jensen Beeler68 COMMENTS

revzilla-logo

Respected newswire Reuters is reporting that Cycle Gear is close to finalizing the purchase of motorcycling e-commerce giant RevZilla. Citing a source “familiar with the matter” at hand, Reuters suggests that the deal could close in the next coming days, with the new venture worth between $400 million and $500 million.

If true, this acquisition would mark a titanic shift in the motorcycle retail space, with America’s largest brick and mortar chain combining with the industry’s most prominent online parts and apparel purveyor.

For those who don’t know, RevZilla is based out of Philadelphia, Pennsylvania and was founded by Nick Auger, Anthony Bucci, and Matthew Kull. The company is routinely spotlighted as one of Philadelphia’s business success stories.

Similarly, Cycle Gear is based out of Benicia, California, has 0ver 100 stores in 34 states, and is owned by the private equity firm J.W. Childs. In all likelihood, it is J.W. Childs that will be doing the purchasing of RevZilla, though that might be an issue of semantics for some.

With the two brands living in the same house, it would be impossible to think of their not being a collaboration of some sort between the two. After all, good business sense for J.W. Childs wouldn’t see the firm acquiring RevZilla and allowing it still to compete with the CycleGear.com property.

We imagine that this move stems from Cycle Gear’s need to push meaningfully into the online space. As such, Cycle Gears acquisition could be just as much about buying knowledge and technology, as it is a thriving business.

For those keeping track, this acquisition would be the second e-commerce deal to happen in the motorcycle space so far this year, with Pro Italia Online passing hands from the Southern Californian dealership to AMS Ducati Dallas.

This shows not only a fair bit of movement in the online retail space for motorcycles, but also signs that the economy is bouncing back and that people have faith in the future of the motorcycle industry.

RevZilla declined to comment on this report, at this time. We hope to have more on this story, as it develops.

Source: Reuters

  • durandal1

    Let’s hope RevZilla’s awesome customer service is retained. Seems like a great match, RevZilla is already in the drop shipping game, and CycleGear can offload local inventory by drop shipping from its stores.

  • John Mith

    This would be ok if Cyclegear’s model was not to try to increase their profits by pushing their inferior Chinese made brands first and high quality brands second. Hopefully they won’t change much in the Revzilla formula and use the same logic. Cycle gear retail stores are loaded with low quality stuff to the point it’s not even worth shopping there. What they do have in things you might actually want to buy are often in oddball leftover sizes.

  • TwoWheelLoo

    Sounds fantastic for Anthony and the boys (also for everyone at RevZilla) but what @durandal1 and @JohnMith are true. Hopefully under new ownership RevZilla won’t change their ethos of awesome customer service, gear education and hilarious antics.

  • Sentinel

    “but also signs that the economy is bouncing back”

    Somebody’s been drinking way too much Fed-MSM lapdog Kool-Aid here…

  • yakimushi

    Frankly, if this comes to pass, I’ll spend what’s left of my Revzilla cash and never look back.

  • Alclab

    I do feel a little concerned about Revzilla… Congratulations to them, it’s the place where i buy all of my moto-gear, but it’s also so much more. It’s the place where I learned what to look for when buying gear, and along with some sites (like A&R of course), Common tread has been a source of news and moto-related articles.

    I love their community, their humor, their great customer service and have totally won my business. The love these guys share for motorcycling shows through and has clearly been a part of their success.

    As much as I know they would be happy for getting that much money, I would love it if they choose to keep a thriving and growing business, rather than being bought by the highest bidder.

  • And why is that?

  • JSTNCOL

    I’d much rather see Revzilla purchase Cycle Gear.

  • transistorplanet

    This.

  • transistorplanet

    Same concern as others. Happy for the RevZilla team, but sad that we will probably lose what has been a bright spot of quality and reliability in the motorcycling world. I don’t say that because I have anything against Cycle Gear (never been to one), but because almost nobody buys a company to keep it the same (even if they could). I do know enough about PE standard practice to know that if they’re buying at a large multiple – I think use of earnings multiples is more standard than revenue multiples, which doesn’t tell you much about the profitability of the business – they’re probably highly leveraged, which means they’ll either pay off a lot of debt or cut costs for a couple of years before trying to resell. Could of course be totally wrong – I hope I’m wrong. Looks like I’ll be making some purchases before this goes through (and free returns goes away forever).

  • Daniel Croft

    If RevZilla informs Cyclegear’s way of doing business and not the other way around, we’re golden.

  • Bob Rosen

    Jensen, the Reuters release says that the Cycle Gear purchase of Revzilla “…would create a company valued at between $400 million and $500 million …” implying that this would be the combined value of both companies, not the purchase price of Revzilla alone, as stated in your article.

    As for Cycle Gears’ annual sales volume, that’s tough to pin down. J.W. Childs’ acquisition announcement failed to site a figure. It is here: http://upload.jwchilds.com/pdfs/JW_Childs_Associates_Acquires_Cycle_Gear_01_08_15.pdf.

    If we can believe the $100million estimate for Revzilla sales, that would indicate sales for Cycle Gear in the $300 to $400million range, or about $2.7mm to $3.6mm for each of their 112 stores on average – an entirely plausible (if not somewhat low) number.

    All that being said, I find it hard to believe that the outstanding business model created by the founders of Revzilla will survive this move. Cycle Gear and Revzilla couldn’t be more different in their approach to doing business!

  • Bingo.

  • Michael McMillan

    Aw Maaan, This stinks! I love RevZilla and Cycle Gear sucks. I’ve had a 20% off customer loyalty coupon from CG for 2 years that I have been unable to use because the restrictions are so tight. If I don’t want their crap house brands, I can’t spend it. The one store I’ve been in was not well stocked on anything but house brands. I sincerely hope that CG adopts the RZ retail model instead of the other way around but I bet they won’t. Seriously, dis suck.

  • Right you are. Thanks for the correction.

  • Bob Krzeszkiewicz

    Like many others here, I have had the best customer service and shopping experience anywhere from Revzilla. Also, the prices have been very competitive or even much lower than others.
    I saved hundreds of $$$$ at Revzilla when I bought my last ensemble of Rukka gear over having purchased from AdventureMotorcycleGear in prior years. I’d hate to think that next time around, my premium gear is going to skyrocket in price to continue to distance premium brands from their in-house Asian garbage gear line. Same with tires, I easily spend 100 bucks less on a set of Q3s or S20s compared to Cycle Gear’s price. And that’s important as I usually go through 5 or 6 sets a year across all my bikes.
    Cycle gear could learn the right way to do things from Revzilla and not the other way around, unless destroying a great business is their goal. For me the only thing worth buying from CG has been Redline fluids.

  • Bob Krzeszkiewicz

    How would Revzilla benefit by selling any of their house brand garbage?

  • Bob Krzeszkiewicz

    “I find it hard to believe that the outstanding business model created by the founders of Revzilla will survive this move. Cycle Gear and Revzilla couldn’t be more different in their approach to doing business!”
    Agreed !!!

  • James

    It’s like you don’t even read Zerohedge, Jensen.

  • I think that comment rebuts itself, no?

    Reading ZeroHedge and expecting anything other than a prediction of a looming global meltdown is like coming to A&R and expecting a glowing review of Erik Buell’s technical achievements and business prowess.

  • James

    Haha sorry, I guess the sarcasm didn’t come through. I work in financial tech and it’s kind of a running joke in my office.

  • JSTNCOL

    From what I know Revzilla has a pretty slick brick and mortar store in Philly. It would be nice to see that concept spread to other locations. Along with their depth of product knowledge, customer service standards, and reasonable prices on quality gear. Cycle Gear brands are mostly junk. No argument there. And most Cycle Gear stores feel like Walmart. If the buyout was the other way around maybe we could get better physical stores to shop in.

  • stopeject

    I can understand their store brand push, they don’t want to be be a fitting room for the online competition.

  • stopeject

    I guess it means that Revzilla is about to start charging the sales tax in all states with CG stores.

  • Jeff Moore

    Imagine if all CG locations turned into ZLA locations, all the CG house brand garbage was ceremoniously dumped into a giant bonfire, and you could have the awesome experience of shopping at Revzilla, but in a physical store.

  • Bob Krzeszkiewicz

    I’m a Philly native so I’ve been to their store several times, but I currently reside in Texas, which is without question, a predominantly cruiser state and therefore a state of riders not too big on gear.
    Even with the crotch rocket crowd, the most gear you’ll see is a helmet, gloves and jacket if you’re lucky. Most of the time, a helmet is permanently attached to the helmet lock.
    A brick and mortal ZLA store wouldn’t survive in Houston.

  • transistorplanet

    This too

  • transistorplanet

    Maybe those folks have just never had a better alternative.

  • sburns2421

    I wonder how much of the purchase price was a to pay for a non-compete for the three Revzilla founders. Without one they could just start another online business like Revzilla (Rev2 ?) and do the same thing again.

  • Shinigami

    This is akin to McDonald’s buying Ruth’s Chris. Not a good outlook for us Revzilla fans if this takes the typical VC/PE acquisition path.

  • :)

  • JSTNCOL

    Don’t be smug

  • yakimushi

    Cycle Gear is like the Wal-Mart or Harbor Freight of bike gear. I don’t see a private equity firm being interested in fostering the excellent community or continuing the same level of customer service that is the hallmark of the Revzilla experience.

  • 365 Rider

    Having a local cyclegear transform into the cyclegear superstore here in Sacramento, I can tell you I am greatly disappointed by this. Years ago the local cyclegear was a small shop, the staff was knowledgeable and passionate. Then they decided to open the big store just a few blocks away. I thought wow this is great, they can fit more stuff which means better selection. I was so excited….. I have been very disappointed ever since.
    Cyclegear, at least the one locally fails at everything revzilla succeeds at. The local staff at best range from squids with no advice if it isn’t a LED you put under your plastics, a set of fluffy ears you suction to your helmet, or a set of crash bars that will totally save you when you go down pulling that sick wheelie. At worst the staff have no knowledge of the product they are selling and lack any passion for motorcycling. Add to the fact that the selection at the store is always abysmal. I have asked more then one staff member why they didn’t have better options or more sizes and was told pretty much the same thing. “We don’t do the ordering, corporate just ships us what they want us to sell.”

    I get excited about shopping on revzilla for that next piece of gear, I dread going to cyclegear. Please for the love of all that is sacred in motorcycling tell me that someone just decided to post an April fools day joke a month and a half early.

  • del1878

    Are you sure you said ‘space’ enough times in that article?

  • transistorplanet

    Did you call this?

  • Dave

    That’s too bad. Revzilla was always the first place I shopped on line. Cycle Gear will surely cheapen it and do away with all the good things Revzilla had going for it.

  • Shinfo

    The worst retailer is purchasing the best retailer. What a shame. Revzilla is so much more than just a retailer though. The individual videos, honest opinions, and reliable reviews from a trusted community is a big loss.

  • The Blue Rider

    “HEY this is Anthony from Revzilla TV where you can watch, decide, and RIIIDE!” And I did, many times, because of useful features like honest video reviews. We don’t need some blinkered clipboard-toting business grad with bright ideas about nothing, turning the best and most useful online retailer into a motorcycle Best Buy.

    I say NAY, unless Revzilla is just being leveraged for technology and ideas in exchange for a fat stack of loot.

  • I guess that means I need to buy some new gear before Revzilla is dismantled in the name short term profits. This is worse than when Huck and Roll got bought out.

  • FARider

    I couldn’t agree more!

  • Lee Scuppers

    The more likely outcome is that the new owner, lacking a culture that values customer service, will move quickly to kill off that part of Revzilla. That’ll be tragic but I’ll bet money on it. Companies that don’t understand customer service aren’t just indifferent to it — it enrages them. They think it’s wasted money. And in a merger, the acquirer always makes a point of destroying whatever unique value proposition made the acquisition worth acquiring. You acquire to gain traits you lack, right? But then you have to integrate them into your culture, which means eliminating anything about them that’s different.

    Kinda sucks. I love Revzilla.

  • Lee Scuppers

    Been to the Philly store. It is pretty slick, though naturally they can only carry a tiny fraction of what the site has.

  • ‘Mike Smith

    5 or 6 sets a year? Wow, I couldn’t do that without some serious burnouts and I ride at least 3 times a week, usually more. Are you doing lots of track time?

  • Clint Keener

    For 2017, the largest gear brand in the world will be Bilt.

    Ugh.

  • Sentinel

    So one 4 year snapshot of the GDP which shows utter stagnation at best, and one very short term snapshot of personal income over a 4 month period which shows nothing more than a small holiday bump at best is your proof of “the economy bouncing back”? Really?

  • Jorge

    I don’t blame the Revzilla guys for taking a payday but I’m old enough to know how these things go. Bought a ton of items from Revzilla, excellent customer service, would be a shame to see that end.

  • silas

    Ever buy any of CG’s Bilt or Sedici gear? It’s well made and often lasts longer than A* or Dainese other name brands. I’ve never had a problem w/ any CG stuff- it lasts and is a good value.

  • msay

    I want to be optimistic about this but it’s really hard, Revzilla built a community around them. It really appeared to be a great place to work and that came across in their videos, people seemed genuinely excited to be selling this stuff to people that cared about what gear they used. I hope the suits at J.W. Childs leave CycleGear to work with the low-to-middle end of the market and let Revzilla continue to excel at the top end. If not, sportbiketrackgear it is. I just hope Lemmy can keep writing for someone.

  • Daimyo

    My knee jerk reaction is similar.

    I fully expect CG to gut RevZilla like a fish but perhaps they will keep them as a subsidiary?

    What a shame.

  • jackc

    Man……this is not good. Let’s hope nothing changes, but i don’t have confidence considering how cycle gear’s quality has been dropping the last several years. A private equity company job is to maximize profits.

  • Dana Pellerin

    Completely agree.

  • Sentinel

    And don’t forget “but also signs that the economy is bouncing back”. lol

  • Zeek Seseika

    Terrible news…

  • CB

    If you BILT it, they will leave.

  • That’s why we can’t have nice things… Too god of a thing. Shame. I really, really like RevZilla.

  • Matt Woolley

    lol

  • John Mith

    To answer your question no I have not actually bought any of Cycle Gear’s stuff. Most of it appears to be heavy low grade cowhide. I have seen Cycle Gear brand suits come apart when riders have had accidents in all fairness though I have seen similar things happen with name brand stuff.

    There’s a huge difference between gear. The higher cost gear is made of lighter weight but tougher leathers. A lighter weight race suit makes it easier to ride and keeps the rider cooler. Many of the cheaper brands race suit are made of thick cowhide that’s very stiff and difficult to move in. Spend an afternoon at the track in a cheap suit vs a lighter weight one and your energy level will be dramatically different.

    We all have to make our own decisions on what gear we feel is safe or a good value. Heavy low grade cowhide gear is not very attractive to me as a rider because I do a lot of track riding in extreme temperatures. The problem of course is there’s no suit or glove or jacket crash testing. We have to decide what we feel is safe on our own. A heavy cowhide suit with basic CE armor I personally don’t feel is protective enough. Some of the higher end suits offer protection technology that enhance safety.

    Hopefully when that time comes that I need that technology it will do it’s job as designed. When it comes to gear, crash physics and other stuff you are on your own and it’s anybody’s guess how an accident will turn out. With all of those variables I try to hedge my bets with the highest quality gear I can afford.

  • Braden

    I bought several Sedici and Bilt pieces over a couple of years. I’m thankful for their generous return policy, because all of it failed in someway or another in less than a year. Gloves/Boots lost any waterproofing ability, seams ripped, poor sewing, broken zippers, loud ill-fitting helmets with easily broken vent switches. The list goes on and on. Even with a huge MSF discount it wasn’t worth it. As for lasting longer than A* or Dainese? I just don’t see it. I’ve not had a single issue with any of my Dainese gear, some of which has given 10 years of service.

  • C’mon Man

    Long time customer of Revzilla. This seems like a match made in heaven. My only hope is for Revzilla to remain the way it is, which has been working fabulously well. The reviews by Anthony are so informative and quirky, customer service is top notch. The staff and the 3 founders at Revzilla needs to stay on and keep the ship running.

  • C’mon Man

    This wouldn’t make sense…. Revzilla knows nothing about running brick and mortar stores.

  • Except they’ve had one since their beginning…

  • JSTNCOL

    Purely from a marketing standpoint (and hopefully someone from J.W. Childs is reading this) it makes perfect sense. To me. Cycle Gear is pretty much universally panned by anyone that has other options. It’s the place to go on Sunday when you need to by oil. Or lube. Or cheap plastic crap manufactured by shoeless children in 4th world countries.

  • You are a wise gentlemen.

  • Everyone involved loves RevZilla the brand.

  • RYAN PHILLIPS

    Please tell me april fools came early! This is horrible news. Revzilla has made buying motorcycle gear a pleasant experience with reviews, tech articles and news. Cycle Gear is a stall company trying to survive in comparison. THis may not be the case but is the image.

  • Jon Peters

    Lee is also a wise gentlemen.