The fund was worth $1 billion and was well known for purchasing troubled companies. Sam Zell, one of the funds owners, was often called the grave dancer. Zell-Chilmark was quite attracted to the economic potential of acquiring the Schwinn name at a fire sale price. Schwinn had taken a hit on its balance sheet in the early 1980s with the closing of the Chicago factory.
Scott had a diverse product line but their main brands were sold in Europe. The last catalog produced by the Schwinn family company also was in 1992. Bicycles coming after that date have the Schwinn nameplate but had no other relationship to the original family company.
China Bicycles asked to join the Schwinn bid by Zell-Chilmark. The logic of working with a supplier did not fit well with Zell-Chilmark’s plan so they declined the offer. As the number two creditor, schwinn beach cruiser Giant also wanted to cut a deal. But Zell-Chilmark was not thrilled with working with a Schwinn supplier and brand competitor. In 1992 I bought my tall 12-year-old daughter a Schwinn Crosscut.
They had no desire for their competitor to own any of their stock. In the US, Chapter 11 allows for a company to stay in business while restructuring its debt obligations. Edward Schwinn’s hope was that he would be allowed to make changes necessary to emerge from bankruptcy as a stronger company.
As a result, Schwinns became increasingly dated in both styling and technology. By 1957, the Paramount series, once a premier racing bicycle, had atrophied from a lack of attention and modernization. Aside from some new frame lug designs, the designs, methods and tooling were the same as had been used in the 1930s.
The main value for a company wishing to purchase Schwinn would be the Schwinn name. The lawyer for the Trust played hardball and stated that the family wanted compensation for the name. The suppliers saw the writing on the wall and quit sending bikes to Schwinn. The Schwinn Family Trust recipients were irate over a cessation of payments. The closing of the Greenville factory combined with the globalization of the bicycle industry meant that Schwinn would never again be making bicycles in the USA. Some of Schwinn’s dealers saw the writing on the wall and they began to carry Trek and other bicycle brands.
These rims, like the Chicago frames, were among the sturdiest ever built. The parts that say “Schwinn” were made by Schwinn in their enormous Chicago factory (which I had the pleasure of touring in the early ’70’s). Parts that say “Schwinn Approved” were made elsewhere to Schwinn’s specifications. We offer service contracts on a monthly, bimonthly and quarterly basis. A preventive maintenance program helps to keep your equipment in top condition, decrease downtime, and prevent major equipment failures. Cleaning, lubricating and making adjustments as well as replacing worn parts are all necessary to ensure the safety and reliability of your equipment.
Edward Schwinn also knew that his company was running out of options. He decided in October 1992 that the company had to file for bankruptcy to keep creditors at bay. Consequently, the storied family bicycle business filed for relief from paying its debt under Chapter 11. In the late 1980s, Schwinn’s profits from its traditional bicycles had evaporated. A sign of trouble was that the exercise bicycles were keeping the company financially afloat. Schwinn had a virtual monopoly on stationary exercises and the Air-Dyne in particular had very high profit margins.
It was a bit pricey for a pre-teen, but the bike was well-built. The Schwinn catalog description of entry for Crosscut revealed that schwinn dealers it was a well-designed bike. The request for compensation for the Schwinn name caused a great deal of turmoil in bankruptcy court.
After a crash-course in new frame-building techniques and derailleur technology, Schwinn introduced an updated Paramount with Reynolds 531 double-butted tubing, Nervex lugsets and bottom bracket shells, as well as Campagnolo derailleur dropouts. The Paramount continued as a limited production model, built in small numbers in a small apportioned area of the old Chicago assembly factory. The new frame and component technology incorporated in the Paramount largely failed to reach Schwinn’s mass-market bicycle lines. W. Schwinn, grandson Frank Valentine Schwinn took over management of the company. At the close of the 1920s, the stock market crash decimated the American motorcycle industry, taking Excelsior-Henderson with it. Arnold, Schwinn, & Co. (as it remained until 1967) was on the verge of bankruptcy.