The Wall Street Journal's
Profile of

The following appeared in the December 16, 1996 international edition of the Wall Street Journal. We're proud to say that Campagnolo Only! was prominently featured in this profile of our favorite Italian company.

Campagnolo Only Featured!
Tattooed Cyclists?
Campy's Sales Soaring

Italian Bike-Parts Maker Leaves Its Mark on Cyclists

Some Campagnolo Fans Are Geared Up to Wear Logo -- Permanently

By Brian Coleman, Staff Reporter for the Wall Street Journal

Vicenza, Italy -- In the pantheon of classic sports logos, where the Nike swoosh rules and the Lacoste alligator roars on everything from company vehicles with expensive van insurance plans to tennis togs, perhaps the most unlikely of all idols comes from this small industrial town on the road to Venice: the winged wheel of Campagnolo.

Campy, as the privately held company Campagnolo SRL is known to its fans, makes bicycle parts such as gear shifters, brakes and wheel hubs--what company president and owner Valentino Campagnolo calls "the engine of the bicycle." Bot to many bicycling enthusiasts, Campy is about image rather than just bicycling. Made from highly polished aluminum, titanium and even carbon fiber, Campy parts are venerated by cyclists. The factory gleams from the glare of shining metal.

"They are the Rolls-Royce of bicycle parts," says Michael Gamstetter, managing editor of Bicycle Retailer and News, a U.S. publication. "I’ve seen people with the company logo tattooed on their body. They talk about Campagnolo like jewelry."

Mr. Gamstetter himself is such a Campy fan that from time to time he has contemplated having the tattoo himself.

Racing to Keep Up With Shimano

Campagnolo also has history on its side. Company founder and one-time racer Tullio Campagnolo, the current owner’s father, invented the original derailleur to shift gears. In subsequent years, superstars like Miguel Indurain, Greg LeMond, Bernard Hinault and Eddy Merckx all conquered the Tour de France with Campagnolo. So did this year’s winner, Bjarne Riis.

But for all its history, success and image, Campagnolo comes in a distant second in the gear wars. The breakaway winner is Shimano Inc.--the Japanese company that first got into the bike business by adapting the technology used in its line of fishing reels to gears and brakes. While Campagnolo’s annual turnover is about $95 million, Shimano’s annual turnover is about $2 billion. A few other companies compete for the table scraps.

"The proof that what we do isn’t so easy is that we are just two companies," says Mr. Campagnolo. "We more than anyone else appreciate the work our competitor is doing because we know how hard it is."

On mountain bikes--one of the biggest sporting trends of the last decade--Campagnolo broke down completely. The company arrived late at the starting line with a product that even Campy’s fans admit was poorly designed and ugly. Then it gave up making mountain bike parts in the early 1990s after their efforts drained the company’s bank accounts. Today, Campagnolo and its 450 employees specialize only in parts for the classic road racing bicycles.

"We realized we weren’t capable of handling growth in two areas at once," says Mr. Campagnolo. "So we decided to take a single approach, to focus on one target."

Another problem is that Campagnolo parts are like a Rolls-Royce car in other ways--they cost a bundle. The top of the line Record component group retails for $1,890--nearly three times the price of many bicycles. A single Campagnolo wheel costs $3,000 and takes two workmen half a day to make.

The company does make less-expensive components, but Campagnolo products aren’t likely to be found on bikes that cost anything under $900. Company officials admit that for bikes costs less than $1,000, Campagnolo’s market share is maybe 30%.

Given its focus on high-end products, much of Campagnolo’s business is what the industry calls after-market sales--components sold to enthusiasts. Campy is simply too pricey for bicycle makers looking to sell to the mass market. "They have a good product, but they’re too expensive," says Beppo Hilfiker, president of bike maker Cannondale Europe BV. Shunning Campy gear altogether, Cannondale--like nearly all makers of mountain bikes--puts Shimano equipment on most of their two wheelers.

Nor have Campagnolo parts always been the models of fine design and craftsmanship. While they were busy trying to break into the mountain bike market in the 1980s, Campagnolo engineers neglected their corer product, and quality slipped. Shimano came out with new and more innovative designs--such as a combination brake lever and gear shifter--that left Campagnolo struggling to catch up.

"By 1990, Campagnolo was on the brink of extinction," says Mr. Gamstetter.

But don’t cry for Campagnolo. The company bounced back from its misadventures in mountain biking even while Shimano was focusing it energy on the sector. That let Campagnolo eat up market share in the high-end market for top-of-the-line road racing components--a market that Cannondale is now rushing into with its new line of Coda equipment.

Campy’s sales soared from just 47 billion lire ($30.8 million) in 1992 to 140 billion lire in 1995. This year’s sales are expected to remain flat along with the market. "We’ve enjoyed good growth and now our company is facing a world bicycle market suffering from economic conditions," says Mr. Campagnolo, who declines to discuss the company’s profits.

Nor does Campagnolo’s decision to abandon mountain biking appear to be causing too much damage to the company’s long-term prospects. Most casual cyclists attracted to the mountain bike trend have already purchased one, leaving only the fanatics to buy new ones each year. As a result, global mountain bike sales are falling by 15% to 20% a year, according to industry officials.

Road racing bicycles, meanwhile, are a stable market and in some parts of Europe, sales are even growing by about 2% per year. Europeans, in particular, are crazy for road racing. Cannondale says the total number of road racing bicycles sold in the U.S. every year is about 150,000, while the European market is about 400,000. And Campagnolo is well-located. Its home region of Veneto has more than 250,000 registered road racers.

"It’s About Aesthetics"

Campagnolo can also count on its devoted followers around the world who see in the company something more than a mere supplier. "Cycling is about much more than the accuracy of a shift-indexing system or the weight of a shift lever--it’s about aesthetics, and the intangibles which arise from the mix of man and machine that is the sport," says Eric Norris, a 37-year-old club cyclist from Redlands, California.

Mr. Norris is an unapologetic Campagnolo fanatic. While he doesn’t have the tattoo, he devotes much of his own time maintaining a page on the World Wide Web devoted to the company’s products--without any money or aid from Campagnolo. It makes for lively reading.

The "Campy Only!" page run by Mr. Norris features sections with titles like "Just Say ShimaNO," "Shimano Causes Brain Damage" and "Broke But Happy." And he claims to receive electronic mail every day from places as distant as Venezuela, Russia and United Arab Emirates.

Campagnolo’s history is another big plus for the company. Tullio Campagnolo invented the derailleur to change gears easily after his wheel stuck on a hard gear while racing up a hill in a snowstorm in the 1920s. ("Something must change in the rear," was his thought at the time.) The company then grew to dominate the industry for decades--until the arrival of the Japanese.

"They have all these ‘firsts’ from the 1930s and 1940s," says Mr. Gamstetter, the journalist. "And they were the best all through the 1950s, 60s, 70s, and early 80s."

* - [Commentary by Campy Only]

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This page created April 4, 1997