Paul Andrews

Posts Tagged ‘bicycle business’

Bike Business “Recovery”?

In Bicycling on February 16, 2010 at 2:09 am

Shimano sales took a 21 percent hit in 2009, but the company continues to look on the bright side. Talking “slight” recovery, the company estimates sales will improve 8 percent the first half of 2010 over 2009’s dismal showing.

Business articles often speak of a rebound in terms of “recovery.” The word is used far too loosely. “Recovery” denotes getting back to full health, or at least where you were before. If someone breaks their arm, they’re not going to think they’re recovered till they can fully use their arm again. Being able to write their name but not, say, wave hello, is not going to be “recovery.”

So when Shimano talks about an improvement of 8 percent year-over-year, they’re a long way from anything resembling a recovery. When you drop 21 percent and gain back only 8, you’ve got a slog ahead of you. You could even gain back a full 21 percent and fall well short of a true recovery. Here’s an easy example, using nice round numbers for explication purposes:

Company X’s 2009 sales drop 21 percent from $100 million to $79 million.

In 2010, Company X’s sales increase by 8 percent. From a base of $79 million, that’s $6.3 million. Add the two figures together and you get $85.3 million.

That’s not terrible. You can write your name. But you’re a long way from giving anyone the “hi” sign.

To get back to full “recovery” — back to where you started ($100 million) — you’d need a sales spike not of 21 percent but of just under 27 percent. Nobody’s talking anywhere near those kinds of numbers for 2010. Even a cumulative 27 percent is nowhere in practical sight.

Keep those simple economics in mind the next time you read a story mentioning any bike business “recovery” — or general economic recovery, for that matter. There may be a bit of a “dead man’s bounce” effect going on in 2010. A slight rebound. An uptick.

An actual recovery, if it happens at all, is going to be a long haul.

News Cycle: Cycling sexism, Budget slashing, Bike biz hammered & more

In Bicycle advocacy, News Cycle, Obama Bikes on January 13, 2010 at 9:36 am

BikePortland.org’s Elly Blue reviews “My year as a woman in a city of bikes”: “The resulting discourse focuses primarily on why so few women choose to ride, concluding that the primary factors are safety concerns — read, greater fearfulness — and image consciousness. More astute observers have pointed out that the majority of errands and kid-toting, even in households with two working partners, falls to women, leading to limited transportation choices.”

Jacquie Phelan’s career-long battle against cycling sexism has done nothing to vitiate her love for bikes.

Cyclelicio.us: Cool bike mural.


Today in Budget Slashing:
Now word comes that Washington State may close the John Wayne Trail, one of the state’s most popular biking routes.

Bicycle Retailer: Imports were way down in November, and kids’ bikes in particular got hammered. Not a happy Christmas in 2009 for a lot of girls ‘n boys: “Imports of kids’ 20 and 24-inch bikes are off more than 20 percent, and sidewalk bikes are down 10 percent—together suppliers imported 1.96 million fewer juvenile bikes.” Mountain bikes: Down 17 percent in September, 25 percent in November. As we’ve said before, it’s gonna take awhile to dig out of this hole.

Ryan Leech on the joys of yoga.

The first time I saw this headline, I read it wrong…

So what happens when you actually DO ride in the buff? All it took was an administrative change to get a ticket against World Naked Bike Ride organizer Daniel Johnson dismissed. A new mayor, a new city attorney, a new agenda…

Bike Biz Rolling … For Now

In Bicycling, Mountain Biking on March 7, 2009 at 10:59 am

So far the Great Recession hasn’t deflated the bike biz. Bike shops up and down the West Coast say their sales, while not blowing off the doors, are holding up better than expected. They cite a number of reasons, starting with gas prices and ending with the joy of riding when the pocketbook is depressed. The caveat is that the worst of the economic plunge hit after the end of the season last year, and this year’s season is just getting under way.

“It hasn’t been doom and gloom like just about every other business,” said Steve Donahue, owner of Recycled Cycles on the north end of Lake Union. A Seattle fixture since 1994, Recycled carries new merchandise (including hi-end brands like Chrome and Swrve) as well as the region’s largest selection of used parts and equipment.

Donahue acknowledges that economic uncertainty will affect his purchasing for spring inventory. Most shops face the issue of moving 2008 stuff out before going whole hog on 2009.

“Christmas wasn’t what I wanted it to be,” he added, “but that was probably more weather-related than the economy.” Seattle was hit with a paralyzing “sno-pocalypse” during the heart of the holiday season. Even die-hard bike commuters had to leave their steeds at home.

You call this a bike shop? Um...yeah! Inside Recycled Cycles

You call this a bike shop? Um...yeah! Inside Recycled Cycles

Recycled has been aided by its reputation for great deals on used stuff and generally thrifty prices. In some ways the economy has helped him, Donahue noted. During the height of gas gouging, customers were coming in either to buy a new bike or dust off their old rig — “ditching the car and getting back into riding,” he said. “We heard that a lot.”

But even at specialty shops with spendy custom gear, sales have been holding steady. Again, the downside has an upside: the financial pinch is translating into more repair and parts business. At Downhill Zone in the University District, owner Adam Schaeffer has “all the work I can handle right now,” and the downhill season doesn’t even start for another month. In Fremont, the Cascade Bicycle Studio‘s Zachary Daab is “doing a lot of custom fitting” for customers who want to get their rides dialed rather than spend more money on bling. And at the newly expanded Fluidride on Lake Union, whose downhill Fluidride Cup Series kicks off April 3 in Port Angeles, business is actually up “around 10 percent,” largely on repairs and custom builds, said Jerry Knight, while Zeb Tingey put together a freshly clear-coated rig in back of the shop’s new glass counter.

At Fluidride, Jerry is thumbs-up, while Zeb is all thumbs, er, action

At Fluidride, Jerry is thumbs-up, while Zeb is all thumbs, er, action

The Seattle shops’ experience reflects what I found during a three-month stay in the San Francisco Bay Area and on the drive back to Seattle at shops in Ashland and Portland, OR. While floor traffic is noticeably light, reflecting a drop in window-shoppers and new-bike buyers, the wrenches have their hands full meeting core customer needs. Their loyal clientele are coming back for more.

In Aptos, Mr. E‘s shop has the Post Office jump park (featured most recently in the video “Latitudes”) to keep it hopping. Across town in Santa Cruz, Another Bike Shop (it’s real name) draws on the University of California at Santa Cruz (UCSC) freeride crowd and Wilder Ranch cross-country troops. In Fairfax, under the shadow of Mount Tamalpais, Fairfax Cycles gets a cross-section of XC and freeride folks headed for Camp Tamarancho.

In San Francisco, Chris Lane at Roaring Mouse Cycles has been “pleasantly surprised” at the continued flow of business from road and mountain biking sectors alike. It doesn’t hurt that Roaring Mouse has a stable of try-before-you-buy demo bikes (so does Another Bike Shop), and a strong word-of-mouth reputation stoked by being named “The Best Bike Shop” in 2008 on MTBR.com.

In Ashland and Portland, shops benefit from no state sales tax. Ashland customers often are Cali buyers who come up to ride Alice in Wonderland or Horn Gap after picking up a new bike in town. In Portland, of course, Washington riders seeking to elude our state’s voracious sales taxes make the stop at Fat Tire Farm to check out the precious metal or get goodies on their way to the McKenzie River Trail or Bend. “For a Seattle customer, it’s approaching 10 percent,” said one of the wrenches at FTF. “On a $3K bike, that can add up.”

There may be another unexpected factor helping the bike business: Community. The recession is putting people out of work, so they have more time on their hands. Turning to one another for support, for networking, and just for the feeling of belonging in times of duress is a huge benefit of bike culture. That may explain why bike-show attendance is up, and attendance is expected to be gangbusters at the annual season kickoff, the Sea Otter Classic from April 16 through 19 in Monterey, CA.

So even if riders are looking to pinch pennies, they’re still spending ’em. At least for now. The proof will be when the season hits and folks make plans for racing and the trips to Whistler or Kamloops. One thing is for certain: Two wheels will always be cheaper than four!