PARK CITY, Utah (BRAIN) — Park City Bike Demos, a Utah retailer that operated with an unusual business model, has been acquired by Robert DeMartini, the new CEO of USA Cycling and former CEO of New Balance.
The store, which shut down in August, will be relaunched in April and co-managed by DeMartini's daughter-in-law, Alyssa DeMartini. Gina Magnuson, who formerly managed retail finance at Specialized and was a controller at POC for three years, is coming on to manage the store's finance. Andre Shoumatoff, the store's founder, will be staying on in a management and buying role.
Rob DeMartini will provide financial oversight manner, but will be fairly hands-off due to his new role at USAC. The new owners said their goal is to make the store one of the top 10 destination bike shops in the nation.
DeMartini spent 12 years at New Balance; during his tenure, annual sales increased from $1.5 billion to $4.4 billion.
"After working for more than a decade with independent running stores, I see a real opportunity to apply learnings from that experience to our specialty bike rental and sales operation," DeMartini said. "We will be a showcase for brands' innovation. We will also create an environment that both experienced and new cyclists will be welcomed and provided excellent service and education."
PCBD began as a mobile bike demo business, with two bread vans converted into rolling bike shop demo rigs that met customers at trailheads and hotels.
Later the operation transitioned into a more traditional IBD that operated out of a 2,800-square-foot space in the heart of Park City. The store acquires nearly all of its customers through online traffic. Customers would visit Park City to demo boutique bicycles from Devinci, Felt, Argon 18, Knolly and BMC. Rental credits would be applied to purchase, and the retailer was able to convert about one in eight renters into a sale, according to Shoumatoff.
BRAIN featured the store in its April 1, 2017, issue (pdf attached). The store did as many as 1,500 demo days in a single season. Shoumatoff said he viewed the store's competition as Disneyland or Sea World, rather than other local IBDs.
However, the business was always plagued with undercapitalization and poor cash-flow management. Shoumatoff said he closed the store due to a high debt load and undercapitalization. Last year BRAIN ran an article about the sale of the assets. DeMartini saw that article and began working on a six-month process to restart the business.
