Giant Sues Stages and Recruits Top Talent

Following the news that Stages has ceased operations it has come to light that Taiwanese manufacturing giant Giant Bicycles filed a lawsuit against Stages Cycling for significant unpaid invoices and also recruiting four of Stages’ top executives.

Lawsuit

According to reports from Bicycle Retailer, Giant’s subsidiary AIPS (Advanced Intelligent Perpetual Solutions), which was established in 2020 to develop and manufacture cycling technology including power meters, filed a lawsuit against Stages in Oregon on February 12th, 2024. The lawsuit alleges that Stages had accumulated 161 unpaid invoices totalling approximately £11.1 million, for products and services rendered between June 2022 and January 2024.

The invoices in question cover a range of products and services, including power meters, exercise bikes, other cycling products and parts, as well as storage and shipping fees. Additionally, the complaint states that Giant has produced and is currently storing products ordered by Stages valued at another £5.4 million.

Talent Acquisition

While the legal battle between Giant and Stages continues, Giant has acquired four high-ranking executives from Stages Cycling. Presumably to create parallel capabilities for Giant.

The most notable addition is Pat Warner, who previously served as Stages’ senior vice president of product research and has now joined Giant as the vice president of Product R&D. Paddy Murray, formerly the vice president of global marketing at Stages, has also moved to Giant, taking on the role of VP of Global Sales and marketing. Thirdly, there is Eric Golesh, who transitioned from his role as product development director at Stages to become a principal engineer at Giant and, finally Andy Lull, who went from being a product development director and senior mechanical engineer at Stages to Giant’s principal R&D engineer.

The Significance of the Move

I’ll be spearheading the launch of a groundbreaking indoor cycling division SPIA Inc, reuniting with some of the most brilliant product and engineering minds in the bicycle and fitness industry, Pat Warner, Eric Golesh and Andy Lull. It’s truly a special opportunity, and I can’t wait to dive in and bring our innovative plans to life! [Paddy Murray via Linkedin]

Murray effectively confirms here that Giant has acquired the means to replicate the parts of the Stages business it is interested in without acquiring the company. However, the pesky issue of patents will likely get in the way and rear its head in a few years.

Thoughts

I speculate that Stages has been in financial difficulty for quite some time as evidenced by it not paying its bills. I’m unsure why Giant would continue supplying the company for such a long period without getting paid, crazy! Giant eventually realised that it wasn’t getting paid and decided to cut its losses by starting legal proceedings in February. No doubt the company had already identified what and who it needed to start its indoor cycling (and probably power meter) business.

With Stages seeming to owe Giant £16m, I would assume it unlikely that any other company will acquire Stages and that debt. Rather, interested parties will buy assets from the company’s receivers/liquidators when they are appointed. But that’s a few more months down the line, so Stages is not technically bankrupt at the moment.

Competitors who want to acquire former Stages talent can now do so. Except for the 4 mentioned above, they’re probably all looking for jobs.

Concerning the remaining assets, I am interested to see what becomes of the finished products and parts, and intellectual property.

Finally the brand itself. The Stages brand is a good one and is reasonably well-known by general cyclists and very well-known by performance-focused cyclists. However, that is no guarantee that it will live on. If the Stages products continue in their current form, I see all of them being rebranded by whoever ends up buying them. If companies buy the IP they’ll likely do that to add new capabilities to their product portfolios.