While Bell has long sold its BSI brand to discounters, it has reserved the Bell name for specialty retailers. Bell executives are bracing for an angry reaction.

To stem that anger, Bell is developing a new line of helmets strictly for the specialty retail channel, calling it the Bell Pro Series. It will be introduced in mid-July.

Bell also will sell the lower-priced Bell and BSI helmets in addition to the Bell Pro Series to specialty retailers. And Bell will offer retailers its lowest volume price on BSI models, even for those who buy in small quantities, said Terry Lee, Bell's chief executive officer.

In the past, some retailers have asked to carry the BSI line, but Bell reserved it for mass merchant sales only

"We're doing this to make a point. The IBD channel of trade is important to us. If they want to compete with the mass merchants, they can, although I don't think that's really what they should be concentrating on," Lee said.

Bell will continue to use specialty retailers to introduce new, value-added technology through its Bell Pro Series. "This business is very product-driven and specialty retailers remain the best place to introduce new technology," Lee said.

To sweeten the policy change, Bell also is offering additional dating incentives and discounts to retailers who increase their annual business with Bell by 20 percent or more.

Jay Graves, who owns the Bike Gallery in Portland, Oregon, is taking a measured view of Bell's decision.

"If the mass merchants are selling at retail prices, which has been the case around here, it won't be much of a problem. If they sell at a discount, then we generally don't carry the brand," Graves said.

Still, Graves, like others, wonders whether Bell's decision will cheapen its brand name.

"I wonder, if by doing that, whether it will make the helmets less popular? And a company sells through a mass merchant, I wonder how viable their product will be in the future?" Graves asked.

Bill Marengo, at the Bicycle Emporium in Auburn, California, shrugged the decision off. "Big 5 has Bell Sports stuff. So it's nothing new," he said.

Bell's decision reflects what is increasingly becoming a commodity-driven market. Hyper-competition from low-cost producers, price pressure and flattening sales are slicing deeply into manufacturer margins. And Bell's stock piece continues to show little sign of improvement, a fact not lost on shareholders.

However, its pending merger with American Recreation, another major supplier of helmets to the mass market, would make the company a formidable competitor when it comes to pricing helmets sold through discount outlets.

And Bell's decision reflects--to some degree--the pressure mass market buyers are putting on companies like Bell, which has a strong brand name, to put that name in front of their customers.

"It doesn't come as a huge surprise. Mass merchants are demanding brand names instead of off-brands. This is an acknowledgment of that market," said Katrin Tobin at Giro Sport Design.

Giro also has sold lower price-point helmets through mass merchant outlets. "The helmet market is becoming a commodity market and it's dependent upon volume," Tobin said,

Bell helmet sales, like others in the industry, have been stagnant. That slow- down is due, in part, to the delay in passage of mandatory helmet laws in some states, Lee said.

As demand has flattened, price pressure from new suppliers is turning the market into a battle over pennies. "We're watching it turn into a commodity market and, as the market leader, we feel we have a responsibility to try to stop that and give the pubic a choice between a low-priced helmet and a value-added, brand name product at a higher price," he said.

The average retail price of a helmet is now $15, down from $30 five years ago, analysts estimate.

Although Lee said his company is avoiding a head-to-head price war with suppliers like Headstrong, Bell is continuing to offer its mass merchant customers BSI helmets that wholesale for less than $10 per helmet.

Its new Bell-branded mass merchant line will start at $30 and is being positioned as a high-end mass merchant product, Lee said. The line will focus on infant, children and youth models.

To help spur demand, Bell plans to spend at least $8 million during its 1996 fiscal year, which begins July 1, on advertising and promotion. The $8 million campaign is Bell's largest.

"And that's a minimum. We may spend more. It will be enough to make a difference," said Lee, who predicts that the campaign will push customers into specialty shops as well as mass merchant outlets.

"The TV ads won't tell someone where to buy a helmet, but they will push the Bell brand. People who shop at specialty stores will go there to get them. People who shop at mass merchants will go there. I can't justify a national ad campaign like this without mass distribution of the brand," he said.

Goodby, Silverstein & Partners, formerly the advertising agency for Specialized, is preparing the campaign. It will include television spots on major networks and cable outlets like MTV and ESPN.

Bell also is planning to increase its advertising to enthusiasts through consumer magazines. Some of those advertisements will include listings of Bell retailers. Bell's other brands, Rhode Gear, Blackburn and VistaLite, will continue to be sold through specialty retailers only, Lee said.

Copyright 1995 by Miller Freeman, Inc, Santa Fe, New Mexico. All rights reserved.

This page was last revised on: November 13, 2003.

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