PRIVATE EQUITY
STRUCTURED CAPITAL

CASE STUDIES

Industry Vertical
Business Services & Consumer
Headquarters
Benicia, CA

www.cyclegear.com

Cycle Gear, Inc.

  • COMPANY DESCRIPTION

    Cycle Gear, Inc. (“Cycle Gear”) was the largest retailer of apparel, parts and accessories for motorcycle and all terrain vehicle (“ATV”) enthusiasts in the United States, operating approximately 100 stores in 26 states. Cycle Gear provided customers with a unique retail concept in the motorsport aftermarket, combining a convenient one-stop shopping experience with a broad selection of quality, brand name products, superior customer service, knowledgeable sales associates and competitive prices.

  • Situation

    In 2004, Harvest targeted the consumer retail industry for investment, with a specific emphasis on companies operating in large and fragmented markets. Prior to investing, Harvest spent significant time with management to understand the store rollout strategy and the company’s competitive positioning and engaged Bain & Company to validate the market opportunity.

  • Harvest Partners Investment

    In January 2005, Harvest purchased Cycle Gear with the existing management team. In addition, Harvest arranged a senior credit facility to fund the store expansion plan and working capital requirements.

  • Investment Thesis

    • Well-positioned, market-leading specialty retailer with multi-channel growth opportunity
    • Strong and consistent same store sales growth
    • Large, growing and fragmented enthusiast market
  • Value Creation

    • Opened 55 stores, more than doubling the store base
    • Transformed product strategy through successful introduction of own brand products
    • Significant investment in CG Direct website to serve growing online market
    • Expanded and professionalized management team and board of directors
  • Outcome

    • Sold to J.W. Childs in January 2015