W. Schwinn returned to Chicago and in 1933 introduced the Schwinn B-10E Motorbike, actually a youth’s bicycle designed to imitate a motorcycle. 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 in turn led to further inroads by domestic and foreign competitors.
For Trek, this strategy began to work and during 1990 and 1991. During that period, Trek moved from fourth to second rank in the bicycle industry. Some of the bankers began to send the loans to the workout department to see how much money they could recover from Schwinn. This was not only meant to put pressure on Schwinn to come up with a reasonable financial workout plan, but also was to hedge their bets on a company financial failure. The pride of the Schwinn family in its outright ownership of the company had come back to bite them. Despite being deeply in debt, Schwinn took a hardline position against its creditors.
My daughter was in middle of a growth spirt and she outgrew the bike in one short season. Now with two kids, the drop handlebars did not suit here. I asked her to take the bike for a ride to see if it fit here. The Schwinn bankruptcy also froze payments to many small schwinn dealers businesses which were owed money by Schwinn. The small companies knew they would be at the end of a long line of creditors asking for compensation. They had to move on to other brands and would not wait for a new Schwinn to emerge from its financial difficulties.
They focused on selling Schwinn branded bicycles at low prices in companies like Sears, Kmart and Target. The Pacific approach for selling Schwinn bicycle combined with several other major brands worked quite well. In 1993, Richard Schwinn, the great-grandson of the company founder Ignaz, and Marc Muller made a deal with Zell-Chilmark. They were able to purchase the Schwinn Paramount design group and production facility in Waterford, Wisconsin from Zell-Chilmark.
Questor tried to breath new life into Schwinn again developing an updated line of historic models. Zell-Chilmark had no use for the Waterford plant which specialized in high-end bicycles. The investment group had decided to focus on the wider markers of less expensive bicycles.
The deal was virtually complete for a Zell-Chilmark takeover of Schwinn. A deal that included the elimination of the China Bicycle Company debt was attractive to the other creditors because this raised the value of the remaining company assets. This increased the chances that they would receive higher payments for their debt.
This decision to rely on bank loans had the opposite of the desired effect. Instead of being dependent on outside investors, Schwinn became overdependent on the banks. Dot Wiggin, formerly of The Shaggs, recorded the song “Banana Bike” in 2013 as a tribute to her sister Helen, who died in 2006.
Questor/Schwinn later purchased GT Bicycles in 1998 for $8 a share in cash, roughly $80 million. The new company produced a series of well-regarded mountain bikes bearing the Schwinn name, called the Homegrown series.[62] In 2001, Schwinn/GT declared bankruptcy. Questor also purchased GT Bicycles and merged it with Schwinn. This resulted in the production of the Schwinn homegrown series and mountain style bikes. The Schwinn bikes were among the best quality sold in the big box stores. The Typhoon probably dates from the late ’50’s or ’60’s.
By 1975, bicycle customers interested in medium-priced road and touring bicycles had largely gravitated towards Japanese or European brands. In reality, mass-market French manufacturers such as Peugeot were not infrequently schwinn beach cruiser criticized for material and assembly quality — as well as stagnant technology — in their low- and mid-level product lines. Nevertheless, Peugeot proudly advertised its victorious racing heritage at every opportunity.