The new company produced a series of well-regarded mountain bikes bearing the Schwinn name, called the Homegrown series.[61] In 2001, Schwinn/GT declared bankruptcy. In September 2001, the Schwinn Company, its assets, and the rights to the brand, together with that of the GT Bicycle, was purchased at a bankruptcy auction by Pacific Cycle, a company previously known for mass-market brands owned by Wind Point Partners.[62] In 2004, Pacific Cycle was in turn acquired by Dorel Industries. Ignaz Schwinn was born in Hardheim, Baden, Germany, in 1860 and worked on two-wheeled ancestors of the modern bicycle that appeared in 19th century Europe. In 1895, with the financial backing of fellow German American Adolph Frederick William Arnold (a meat packer), he founded Arnold, Schwinn & Company. Chicago became the center of the American bicycle industry, with thirty factories turning out thousands of bikes every day. Bicycle output in the United States grew to over a million units per year by the turn of the 20th century.
Over the years, Schwinn has empowered millions of people, earning a special place in the hearts and minds of generations of riders. We have spent over a century building the bicycle industry into what it is today, and we’re not done yet. In the late 1960s, the Varsity and Continental pioneered the use of auxiliary brake levers, which allowed the rider to rest hands on the straight, horizontal center section of the ram’s horn handlebars, yet still have braking control. To further improve control from this more-erect riding position, the levers used to move the derailleurs (shifting the chain from one sprocket to the next) were moved from the traditional position on the “down tube” to the top of the headset, on a ring which would turn with the handlebar stem. This feature, attractive to older riders, soon found its way to other Schwinn models, especially those intended for senior citizens.
Although the Varsity and Continental series would still be produced in large numbers into the 1980s, even Schwinn recognized the growing market in young adults and environmentally-oriented purchasers, devoting the bulk of their marketing to lighter models intended to pull sales back from the imports. By 1990, other United States bicycle companies with reputations for excellence in design such as Trek, Specialized, and Cannondale had cut further into Schwinn’s market. Unable to produce bicycles in the United States at a competitive cost, by the end of 1991 Schwinn was sourcing its bicycles from overseas manufacturers. This period schwinn cruiser bike in Schwinn’s history plays a cameo role in a novel by Dave Eggers, A Hologram for the King (2012).[58] Seeking to increase its brand recognition, Schwinn established additional company-operated shops, a move that alienated existing independent bike retailers in cities where the company stores had opened. Faced with a downward sales spiral, Schwinn went into bankruptcy in 1992.[59] The company and name were bought by the Zell/Chilmark Fund, an investment group, in 1993. In the 1950s, Schwinn began to aggressively cultivate bicycle retailers, persuading them to sell Schwinns as their predominant, if not exclusive brand.
During this period, bicycle sales enjoyed relatively slow growth, with the bulk of sales going to youth models. In 1900, during the height of the first bicycle boom, annual United States sales by all bicycle manufacturers had briefly topped one million. By 1960, annual sales had reached just 4.4 million.[10] Nevertheless, Schwinn’s share of the market was increasing, and would reach in excess of 1 million bicycles per year by the end of the decade. In late 1997, Questor Partners Fund, led by Jay Alix and Dan Lufkin, purchased schwinn bicycles. Questor/Schwinn later purchased GT Bicycles in 1998 for $8 a share in cash, roughly $80 million.
F. Goodrich bicycles, sold in tire stores, Schwinn eliminated the practice of producing private label bicycles in 1950, insisting that the Schwinn brand and guarantee appear on all products. In exchange for ensuring the presence of the Schwinn name, distributors retained the right to distribute Schwinn bikes to any hardware store, toy store, or bicycle shop that ordered them. W. Schwinn tasked a new team to plan future business strategy, consisting of marketing supervisor Ray Burch, general manager Bill Stoeffhaas, and design supervisor Al Fritz. By the mid-1970s, competition from lightweight and feature-rich imported bikes was making strong inroads in the budget-priced and beginners’ market. While Schwinn’s popular lines were far more durable than the budget bikes, they were also far heavier and more expensive, and parents were realizing that most of the budget bikes would outlast most kids’ interest in bicycling.
Mountain bikes were originally based on Schwinn balloon-tired cruiser bicycles fitted with derailleur gears and called “Klunkers”. A few participants began designing and building small numbers of mountain bikes with frames made out of modern butted chrome-molybdenum alloy steel. When the sport’s original inventors demonstrated their new frame design, Schwinn marketing personnel initially discounted the growing popularity of the mountain bike, concluding that it would become a short-lived fad.[39] The company briefly (1978–1979) produced a bicycle styled after the California mountain bikes, the Klunker 5. Using the standard electro-forged cantilever frame, and fitted with five-speed derailleur gears and knobby tires, the Klunker 5 was never heavily marketed, and was not even listed in the Schwinn product catalog.