The official announcement came across the wires yesterday that web retail giant RevZilla Motorsports, LLC will join forces with Cycle Gear, Inc . This is big news for the motorcycle world, as these are two of the largest retailers of clothing, accessories, and motorcycling goods in the nation. The founders of RevZilla, along with the Boston-based equity firm J.W. Childs (owners of Cycle Gear since 2015) will become, “joint equity holders of a newly formed holding company,” which will be the umbrella over both RevZilla and Cycle Gear.
The financial terms of the deal were not disclosed at press time. The Internet has been alive with rumors of a price tag as high has half a billion dollars, but it seems that all stems from a Reuters story that placed the combined value of the two companies at 400 to 500 million dollars. Big difference. In any case, many are quick to point out that the official language used in the announcement specifies neither a merger nor an acquisition: Technically, both RevZilla and Cycle Gear will be owned by a parent company and operate as sister brands.
That being said, J.W. Childs’ ownership of Cycle Gear certainly suggests that while the deal could prove mutually beneficial, RevZilla equity holders are the ones that stand to benefit from the immediate financial transaction. The crossover, synergy, and distribution dynamics of the two companies remains to be seen. In other words, this is big news but as motorcyclists we will have to wait and see in what way the atmosphere in the retail industry shifts.
In a letter to its “ZLA Army,” RevZilla posted an open letter stating that each of the three RevZilla founders will maintain their leadership roles and that the company’s goals have not shifted with this high-level “strategic alliance.” Considering the substantial success of RevZilla since its founding in 2007, there seems to be no good reason to throw any massive change into the company’s system. Flexing RevZilla’s large online impact with the substantial brick-and-mortar presence of Cycle Gear seems an obvious opportunity for both brands to benefit greatly but, as we said before, motorcycling and motorcyclists will have to wait to see how the partnership develops.