Direct-to-consumer MTB brand YT faces insolvency

YT Industries announced that the company is entering into a “self-administrated legal restructure” after struggling to secure additional funding. The direct-to-consumer German mountain bike brand was founded by Markus Flossman in 2008 with a focus on providing hard-hitting, quality mountain bikes at affordable prices, for young riders in particular. Flossman provided an update on the company’s situation in a video posted to YouTube earlier today.

Filing for insolvency “allows us to restructure our finances, attract new investors, and ultimately set up the brand for long-term success,” he said.

YT’s post-COVID struggles were compounded by more recent problems

Like many brands, YT struggled to balance supply and demand during the COVID years. In late 2020, Flossman handed the reins over to a new CEO, and the brand took on a private equity investment in 2021 to help fund the brand’s expansion. Ultimately, YT ended up with an oversupply of bikes at a time when other brands were facing the same situation, leading to what Flossman describes as “a brutal discount war for survival.”

On February 19, 2024, Flossman returned as CEO, taking over from Sam Nicols, who led the brand for three years. Flossman and his team worked to cut costs and improve operations, which he says had the brand on track to recover until they were faced with new challenges earlier this year.

“A key supplier failed us with quality issues and delivery delays right when we needed them most,” he says in this video announcement.” At the same time, the US market became widely unstable. Everything from natural disasters to chaotic trade policies hit consumer demand hard.”

Customers have been reporting delays recently

Though Singletracks was unable to find an official record of YT Industries’ insolvency filing, customers have been reporting issues on Reddit over the past several days. One buyer said their bike order was canceled without explanation, and when they went to re-order the bike, the price had increased significantly. Another posted saying they still hadn’t received an order placed more than a month ago, and received the following email today:

We regret to inform you that, due to ongoing insolvency proceedings, your order[…] has been put on hold. As your payment was received before the proceedings officially began, it is legally considered part of the insolvency estate.

At this stage, we are unable to issue refunds or provide further details about the status of your payment. We understand how frustrating and disappointing this situation is, especially without a clear resolution.

If you wish to explore your options, we recommend reaching out to your payment provider to inquire about potential next steps.

The YT website says the company is “experiencing a high volume of requests” and that they’re “currently experiencing issues with our phone lines.” The message goes on to suggest customers email the brand for support.

A unique industry model

YT was one of the first to pioneer large-scale, direct-to-consumer mountain bike sales, regularly selling out new bike shipments within days of arrival. Even today, a check of the YT website shows staggered availability for bikes like the short-travel Izzo, with some sizes/colors in stock, others arriving August 11, and still others arriving August 25. For the first 10 years, Flossman says the company operated without outside funding, which no doubt contributed to the brand’s scrappy, creative ethos.

It’s not clear how the insolvency will affect future pricing and availability. At the moment, the YT website shows US bike prices are discounted for select models, though other bikes are listed at their full retail prices. All builds of the popular Jeffsy trail bike are currently on sale, some discounted by $2,000 or more.

The brand promises ongoing support and new products on the horizon

Flossman says the company’s internal restructuring shouldn’t affect customers in the long term. “Our day-to-day operations will go on,” he says in the video. “We are still here for you. Our service team is still at your side, and we will do everything we can to keep our customers unaffected.”

He also notes that YT has invested in new products and has plans for exciting launches in the near term.

“It’s not the end,” he says. “I still believe in YT.”

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