American Bicycle sells Merlin, plans to add workers

American Bicycle sells Merlin, plans to add workers

March 18th, 2011 by Mike Pare in Business Around the Region

ABG FOOTPRINT

In addition to its Ooltewah headquarters and manufacturing facilities, American Bicycle Group has warehouse operations in Los Angeles.

American Bicycle Group has sold one of its product lines, Merlin Metalworks, so it can focus on two other key brands and speed their growth.

"By selling Merlin, we can use that money to reinvest in Chattanooga to grow the others," said Peter Hurley, Ooltewah-based ABG's chief executive, about its Quintana Roo and Litespeed products.

Merlin was sold to Little Rock, Ark.-based Competitive Cyclist, an online retailer of bicycles and related products. The sale price wasn't announced.

"Typically retailers don't own bike brands," said Brendan Quirk, Competitive Cyclist's CEO. "They'd rather buy from a manufacturer or a distributor. This is a unique setup."

ABG is rebounding from the severe recession. The high-end bicycle maker employs 37 people in Chattanooga, but Hurley said it's looking for its work force to reach 50 to 55.

Most of the new hires will be in marketing, design and administrative areas, he said.

"While Merlin has been a great brand for us, this is a strategic decision to consolidate and apply our focus and capital to two brands ... that have shown incredible sales momentum in the past year," Hurley said.

He said ABG sales climbed 20 percent last year over 2009 and are up by a double-digit percentage figure in 2011. He declined to release sales numbers.

Hurley said the successful launch of the Litespeed Carbon series and the Quintana Roo CD0.1 product line spurred the best financial performance for ABG since 1998. It's prompted added development capital to expand each of the two brands, he said.

J.Ed. Marston, the Chattanooga Area Chamber of Commerce's vice president for marketing, said ABG is acting in a "proactive and flexible way to grow their business." He said the Chamber continues to target recruitment of outdoor companies.

Merlin, which was a pioneer titanium frame product, is expected to reach a wider audience through its sale, officials said.

As part of the sale, ABG will retain rights to make and sell Merlin products to buyers in the Asian markets through 2012, according to the companies.

Quirk said ABG will be "front and center" in the decision-making process of where [Merlin] will be made.

"Our intent is for it to be American made," he said.