In order to realise any deal with any bidded, Schwinn/GT had to first file for Chapter 11 of the U.S. Bankruptcy Code.
Technically, it would be possible for other bids to be received for Schwinn/GT in the Chapter 11 grace period but as the company has already been fought over by a number of global brands, a newer, higher bid is thought to be reasonably unlikely. The other suitors have until 18th August to make any fresh bids.
Don Graber, Chairman, President and CEO of Huffy said: “An opportunity such as this comes along only rarely. The Schwinn brand is one of the most widely recognized brand names in the world and together with GT and other brands would strengthen our existing brand portfolio."
Interestingly, he also said:
"The Schwinn and GT brands are ideal candidates for multi-channel distribution, capitalizing on Huffy’s marketing and brand management expertise.”
In other words, were Huffy’s ‘stalking horse’ bid to succeed, the brands would be placed in Wal-mart and other discounters, losing much of their IBD cachet in the process.
Huffy is a mass market bike brand.
A global trade commentator had this to say about the Huffy bid:
"Huffy ended last year in the black ($20 million in cash in bank account, but did so based mainly on the success of scooter sales. This year with a soft market and scooter sales that have basically dried up, they were expecting a year with drop in sales.
In addition, there is much talk that Huffy was afraid of Pacific becoming even stronger competitor by buying the Schwinn/GT group. The big question now is what will Huffy do with these brands. Schwinn was suffering mainly due to poor management, not weak brand strength. The brand has quite a lot of value in IBDs. Of course, it is also known
that Wal-mart was pursuing the Schwinn brand a couple of years ago quite
heavily to sell in their stores."
Schwinn, founded in Chicago in 1895, was the dominant US bike-maker for much of the 20th century, and in the 1950ss, one in four bikes sold in the United States
was a Schwinn.
The company lost much of its market share in the 1980s after failing to capitalize on the mountain-bike craze and losing its appeal to younger bikers. It filed for bankruptcy in 1992.