In the many months before opening our own sm all coop, I broached this topic with a bike shop owner - more as a joint venture sort of concept but where both models would coexist. He explained how the two concepts would not work together because of the big difference of profit and prices. His perspective made sense so we chose our own path. We have remained good friends and in fact do a few things together - we get parts and supplies from him and we get some good used bikes for his operation. We also cross refer customers when it males sense, which is very often.
Hope this is helpful.