Schwinn's new company coincided with a sudden bicycle craze in America.

He finalized a purchase of Excelsior Motorcycle Company in 1912, and in 1917 added the Henderson Company to form Excelsior-Henderson.

In an atmosphere of general decline elsewhere in the industry, Schwinn's new motorcycle division thrived, and by 1928 was in third place behind Indian and Harley-Davidson. to make 2.125-inch-wide (54.0 mm) balloon tires, while adding streamlined fenders, an imitation "gas tank", a streamlined, chrome-plated headlight, and a push-button bicycle bell.

At the close of the 1920s, the stock market crash decimated the American motorcycle industry, taking Excelsior-Henderson with it. (as it remained until 1967) was on the verge of bankruptcy. W." Schwinn, took over day-to-day operations at Schwinn. Schwinn returned to Chicago and in 1933 introduced the Schwinn B-10E Motorbike, actually a youth's bicycle designed to imitate a motorcycle. The bicycle would eventually come to be known as a paperboy bike or cruiser, and soon became an industry standard as other makers rushed to produce imitations.

The Schwinn Bicycle Company was founded by German-born mechanical engineer Ignaz Schwinn (1860–1945) in Chicago in 1895.

It became the dominant manufacturer of American bicycles through most of the 20th century.

Today, after declaring bankruptcy in 1992, it is a sub-brand of Pacific Cycle, owned by the multi-national conglomerate, Dorel Industries.

Ignaz Schwinn was born in Hardheim, Baden, Germany, in 1860 and worked on two-wheeled ancestors of the modern bicycle that appeared in 19th century Europe. In 1895, with the financial backing of fellow German American Adolph Frederick William Arnold (a meat packer), he founded Arnold, Schwinn & Company.

By 1905, bicycle annual sales had fallen to only 25% of that reached in 1900.

Many smaller companies were absorbed by larger firms or went bankrupt; in Chicago, only twelve bicycle makers remained in business.

Competition became intense, both for parts suppliers and for contracts from the major department stores, which retailed the majority of bicycles produced in those days.

Realizing he needed to grow the company, Ignaz Schwinn purchased several smaller bicycle firms, building a modern factory on Chicago's west side to mass-produce bicycles at lower cost.