Kona Bicycle’s parent company appoints new CFO amidst fears of “cost-cutting measures” after brand pulled out of major cycle show at last minute

After Kona Bikes staff were spotted taking down the brand’s stall at the Sea Otter Classic, a major bicycle industry expo on Wednesday, it has been reported that the Canadian bike brand’s owner has appointed a new chief financial officer (CFO) to “pursue new opportunities”.

Founded in 1988 in Vancouver, Kona is famous for its mountain and cyclocross bikes and was taken over by Canada-based sporting goods conglomerate Kent Outdoors in 2022. Bike Europe reports that yesterday, the parent company hired Rob Otto as Kona’s CFO.

Kent Executive Chairman Lee Belitsky, said: “He is an experienced leader who will help guide Kent as we actively pursue new opportunities.” He added that Otto’s ability to “rapidly interpret complex situations, formulate solutions and make sound decisions and possesses considerable experience implementing processes and business solutions that spur growth and improve operations and profitability.”

Otto joins Kent from previous CFO positions including RW Designs, Z Gallerie, Hudson Jeans, Seven For All Mankind, and Affliction Holdings. He said: “Kent possesses some of the most recognised names and brands in the industry, and it is my goal to ensure the company remains an industry leader while enhancing operational capacity and processes to ensure our facilities and people are operating at their peak.”

Bicycle Retailer and Industry News (BRAIN) was on the ground at the event in Monterey, California, which gets underway today, and saw the Kona display being set up before being taken down, amid rumours that employees have been told to expect a company “town hall” meeting yesterday.

Details of the meeting remain unknown at the time of reporting, however rumours of cost-cutting measures are high, according to Bike Europe.

road.cc has contacted Kona for comment, although it it not yet known what the topic of the meeting is. Earlier this month, five-time world solo 24-hour mountain bike champion Cory Wallace posted on Instagram to say that the Kona race team was going to be terminated.

While the stand was being taken down, a marketing specialist at the North American bike brand founded in 1988 told BRAIN that they would not be commenting on the matter.

"I can tell you straight away we are not going to have a comment," Caleb Smith reportedly said. It is believed the CEO of Kent Outdoors, the sporting goods company that bought Kona in 2022 from its founders Dan Gerhard, Jake Heilbron, and Jimbo Holmstrom, directed employees to pull the brand's presence from the expo. 

The news comes as Kona had yesterday unveiled its new full carbon gravel offering, the Ouroboros, which was due to be shown off at the brand's Sea Otter stand this week.

The line includes three builds — the Ouroboros CR, the Ouroboros CR-DL and the Ouroboros Supreme — Kona saying the new bikes will "catch the attention of both" mountain bikers and gravel fans.

"Pack it expertly for the long haul, nimbly explore the edges of singletrack, or complete multiple days of the most wonderfully weird and delightfully chaotic of events," Kona said in a press release announcing the new bikes. "While other gravel bikes may technically tolerate mountain bike components, the Ouroboros is intentionally designed around the rowdy stuff – like 180mm rotors, 2.1 tire clearance, and front suspension, giving you a ride feel that is otherworldly and almost mistakable for a modern trail bike."

Now part of Kent Outdoors' sporting goods portfolio alongside numerous outdoors brands, in 2022 it was communicated that the brand's founders would be staying on in their roles initially "to help a new generation of leaders at Kona guide our company to even greater heights".

One of the founders, Jake Heilbron, said at the time: "Kona remains committed to building great bikes, working with a rapidly growing network of independent bicycle retailers, and maintaining the Kona Way in everything we do. We're excited about the future and look forward to growing with the Kent family."

Earlier this month, Kona racing team rider Cory Wallace said it was and "unexpected goodbye to one hell of a ride", official notice having been given last November that the team would not be continuing.

 

 

 

 

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A post shared by Cory Wallace (@wallacesworld)