Bicycle company flies on 'Lance factor'

WATERLOO, Wis. -- When executives at Trek Bicycle Corp. signed a contract with Lance Armstrong in 1998, they were betting the public would see the cyclist recovering from testicular cancer as a human interest story.

Seven years later, Armstrong is still riding a Trek manufactured in this southern Wisconsin town as he competes for his seventh straight -- and last -- Tour de France victory this week.

Armstrong's prowess and personal story have reinvigorated American interest in cycling, and no company has felt the impact more than Trek, the privately held company that is the top US manufacturer of bikes.

''It was just a gamble that paid off dividends that we could never imagine," said Zapata Espinoza, a spokesman for Trek. ''It was like putting a penny in a slot and winning a million bucks."

The Lance factor, as Trek executives call it, is hard to quantify but has certainly been real. Combined with an aging baby-boom generation that is turning to cycling for fitness and leisure, that means big business in road bikes, the fast, lightweight cycles used by Armstrong and other world-class racers.

Road bikes, which sell for an average of $1,150, accounted for 28 percent of dollar sales by specialty dealers in 2004, up from 16 percent in 2002, according to the National Bicycle Dealers Association. Overall, the US bicycling industry has remained flat since 1999, generating an estimated $5.5 billion in sales of bikes, parts, and accessories in 2004, the group says.

At Trek, sales are up and the company is undergoing a major expansion that will increase the size of its headquarters in Waterloo by about one-third.

The project, to be completed next month, will allow the factory to produce more of the lightweight carbon bikes that have become the company's trademark around the world. The business now produces more than one million bikes per year, including road bikes, mountain bikes, and kids' bikes.