YA CAN'T KEEP A GOOD BIKE DOWN

September 20, 2001 marked the homecoming for an American icon, as Schwinn Bicycles returned to its Midwestern roots. Pacific Cycle, Inc., a leader in designing, marketing and distributing high quality branded bicycles, brought Schwinn to Madison, Wisconsin after rescuing the company from bankruptcy. Pacific Cycle founder and CEO Chris Hornung not only brought Schwinn Bicycles back to life (and back to the Midwest), he also re-staffed the organization with former Schwinn executives from the company's glory days, poising the company for a triumphant return to its prominent place atop the cycling world. Things have never looked better for the venerable Schwinn Bicycle brand - but it's been a bumpy ride. Here's a look back at the events that have shaped Schwinn into the company we know today.

In 1895, Ignaz Schwinn and partner Adolph Arnold incorporated "Arnold, Schwinn & Company" on October 22 in Chicago. Ignaz and Adolph couldn't have dreamed that the company they envisioned as a simple transportation business would blossom into one of America's most popular brands.

Early bikes weighed about 22 lbs. and cost between $100 and $125 - a lot of bike for a lot of money in the early 1900s! Manufacturing advances in the 1920s allowed Schwinn to build and sell bicycles at lower costs, thereby making bikes available to more consumers - including children - for the first time. A new market was born and Schwinn was there.

In the next several decades, Schwinn made innovative strides such as the bicycle balloon tire, the Aerocycle, the Cyclelock, springforks and the famous Black Phantom bicycle.

The '50s saw celebrities like Bob Hope, Bing Crosby and Ronald Reagan endorsing Schwinn bikes, but in 1963 Schwinn produced perhaps the most famous bicycle of all time: the Sting-Ray. Kids across the country proudly cruised through neighborhoods with high-rise handlebars, banana seats, Stik-Shifts and racing Slik tires. Schwinn literally couldn't make enough of them. Various versions of the Sting-Ray were developed, but perhaps the most popular were the 1968 Sting-Ray Krates. These muscle-car era bikes were truly an American phenomenon. Every kid in America had a Sting-Ray or wanted one.

In 1967, Ignaz gave Adolph the boot, and "Arnold, Schwinn & Company" became the "Schwinn Bicycle Company," with the Schwinn family maintaining full ownership of the Schwinn brand.

The late 1970s saw the BMX craze in full gear, and though the Sting-Ray essentially fathered this style of bicycling, Schwinn came to the BMX dance a little late. To make matters worse, Schwinn management saw the mid-'80s mountain bike trend as a fad, and didn't jump into that game until many of its competitors had surged ahead in the exploding category. Some tragic writing was on the wall.

In 1993, the axe fell. Schwinn filed for bankruptcy and new owners Scott USA and Zell/Chilmark Fund L.P. took over, moving the company from Chicago to Boulder, Colorado just prior to Schwinn's 100-year birthday in 1995.

In 1997, Scott USA and Zell/Chilmark sold Schwinn to Questor Partners, an investment firm, and in 1998, two old rivals formed a lucrative marriage. Schwinn and GT bicycles joined forces to form the Schwinn/GT Corporation. Things were looking swell, but the honeymoon didn't last long. The Schwinn/GT Corporation filed for bankruptcy in 2001. Would the Schwinn bicycle become no more?

Enter Pacific Cycle, Inc., the bike company mentioned in the first paragraph, which bought the Schwinn/GT Corporation and returned Schwinn Bicycles to its Midwestern home. Finally the brand was back in the hands of a real bicycle company again! Bicycle aficionado Chris Hornung founded Pacific Cycle in 1977 when, straight out of college, he began designing, marketing and distributing high quality, low cost bicycles.

Hornung had grown his company to include several strong bicycle brands, including Mongoose, and he and his managers understood well the value of brands and the business of bicycling. Bringing Schwinn under Pacific Cycle's wing was a dream come true for Hornung, and Schwinn once again flourished. In response to current buying trends, Schwinn was sold through the mass retail channel for the first time in 2002, providing a greater number of consumers access to Schwinn bicycles. More than 1 million Schwinns were sold in 2003 alone! Life was good…and it would only get better.

In 2004, Montreal-based Dorel Industries Inc., a global supplier of juvenile and home furnishing products, purchased Pacific Cycle. Recognizing the success of Pacific Cycle, Dorel asked Pacific Cycle's founder and Chief Executive Officer, Chris Hornung, to continue operating his company as a standalone division of Dorel.

With the security of long-term management and a renewed dedication to the brand's core values, Schwinn has shown signs of exciting new strength. With a return to widespread distribution and solid profitability, Schwinn is well on its way back to the top. The April 2004 launch of the all-new Schwinn Sting-Ray is an example of the company's ingenuity and willingness to roll boldly into new categories. Today, Schwinn rolls happily and securely along, its shiny rubber tires spinning freely into the future.

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