Nike ACG and WI-based Trek Bicycles have formed a
partnership under which Trek becomes Nike ACG's official
licensee maker of performance cycling footwear and apparel.
While some apparel is already hitting stores and Nike's Web
site, a road cycling line of Nike ACG/Trek footwear will be
available as early as spring 2001 (Nike). In Portland, Andy
Dworkin wrote that the deal "lets Nike tap into Trek's big
network of retail partners," and also "expands the line of
equipment" Trek can offer. Additionally, Trek gets Nike's
R&D "expertise and, of course, the swoosh." While the two
companies will "cooperate on designing the gear," Trek will
lead the clothes design, and Nike will head the shoe design.
ACG President Gordon McFadden said that the "finished
products will carry only" the ACG brand. The deal "calls for
Trek to pay Nike a royalty for each item sold," but McFadden
declined to say "how much money ACG expects to get" from the
effort or "how big" the brand's current sales of biking gear
are (OREGONIAN, 6/20). BRANDWEEK's Terry Lefton reports
that ACG is "looking to increase its 'street cred'" by
"raising its marketing budget" for the FY from $5M to $18M.
But even with the spending increase, "there's no TV in ACG's
future, given the elusive nature of its target audience."
McFadden said that the "dollars will go to fund" print ads
and to "build standalone ACG Stores, retail fixturing and
standalone boutiques at retail" (BRANDWEEK, 6/19).
