BikeBiz

So the big cycle shops with big on-line sales support are the ones expanding, at the expense of the smaller shops, partly due to the buying power and the discounting and ability to buy up all the stock of some of the brands like Lapierre etc. I note the Zesty 314 is already sold out for 2012 due to one or two stores buying up all the stock. great outlook for the rest of the industry, going a similar way of the bookstore etc. Then every high street will have an Evans, halfords, and Bike co-op, what joy.

Couldnt agree more Edward, The importers should be shouldering more blame here for discounting so ridiculously to the multi's. CSG & Hotlines are major offenders, then look who's products are discounted to death towards the end of the season? And they then wonder why their products are shunned? The multi's are only exploiting what is available, so come on importers - grow a spine!

UK cycle retailers in numbers The picture isn't quite that rosy, there are a lot of bike shops struggling at the moment. I know a lot are opening at the same time, but it's not quite a licence to print money the cycling media like to present. Interesting the drive toward multichannel.

Jon: Just fyi CSG hasnt discounted a single 2012 bike. There are other brands in the market who are. There has been some internet discounting of our 2012 BMX bikes but this has been from a broad spectrum of internet retailers with single or multiple locations. Undoubtedely unfortunate. As you will be aware Retail Price Maintenence is illegal. One of the reasons CSG was created from the foundation of Hot Wheels was to provide creater availability of stock through creater access to finance, its true to say that we bought a few too many BMX bikes for this Xmas and some decided to discount. Damned if you do and damned if you dont!! For 2013 WTP dealers, for example, will be required to 'sign up' and commit to the brand, this may tighten availability but support sales at full retail. The criticism could then be lack of availability to capitalise on every sale!! :) Trust me that we value our brand integrity and try hard to get the balance right. Call 01202 732288 to discuss further should you wish. Russell

Russell, thanks for your response and it is indeed pleasing to hear that you are beginning to control the supply a little. indeed simple economics - control the supply and you control the demand. What i refer to is the worrying level of discounting on the GT & Charge brands particularly during summer 2011 which made selling this stock with any margin an impossibility as a low volume IBD when faced with the discounting from Wiggle, Evans et al. I fear we are going way off topic here, so i'm sure we can pick up on this off line. Back to topic: The multi's have an envious position, big buying power, backing from investors to secure the right high street locations anda public that appears hypnotised by big advertising.. I'm jealous!

It would appear that the few are getting more powerful and are using their buying power to distort the market. Buying up all of a popular model is one way of controlling the market. But also for the big internet sellers buying from abroad then distorts the pricing for the market, I expect the industry to go the way of the supermarkets and the small shops and current distributors will go to the wall. as the distribution model will be shortened. As russel points out from CSG, dealers will be required to make a bigger committment (bigger dealers can then buy up the stock, small dealers will be purchased out of the market)

actually some of the orders we deem 'too big' pre-christmas we plan to refuse, citing supply and demand economics this year. We have grown from a £13.5 million company as HW to a £27 million company (with the addition of Cannondale) and additional resource meant improved availability of the original brands all in the name of service!! Where we "over improved" it we will fine tune it!! we are focussed on regular IBD business, we are not opening concept stores and we value every IBD customer. Its not easy to predict the weather, economy, lead times, fashion and competitor inventory and then have the right amount of stock. Just FYI - I think there will be a bit of a general shortage come spring/summer - this should support price.

Re: independents losing out/cycle retail in numbers... I'm trying to get some rough figures on the number of independents shutting compared with opening, so BikeBiz will pick up on those threads soon I hope. Also, I forgot to mention the rise of Decathlon in my article, who now have 13 or so stores.

We just have to accept that it is an industry that is following a trend. The same trend has been seen across the UK high street in all retail sectors and it comes down to big business having the ability to buy out the stocks from distributors and then offer that stock at a discounted rate. Its a momentum that is accelerating. Tie that in to the practices of the big three in the Cycle to work scheme who tie in organisations to exclusive deals and you can see how the future cycle retail landscape will look. First the LBS will go, then it will be the turn of the distributors as multi-store dealereships wont need a UK distributor for SRAM, Shimano etc.

The trend of polarisation is inevitable, but primarily because most businesses seek short term gain over longer term continuity, sell your soul for a quick buck stuff, BUT the UK bike trade is more resilient than that and the nails aren't even near the coffin yet! There are plenty of businesses that have borrowed lots of money to expand, only to fall foul of their 'bankers' - in fact many more than have thrived -the original article relates to some! Some of the 'expanding' businesses mentioned are struggling to make profits, one just announced profits below 1% of sales, something that could be wiped out by a small currency swing and in the world we currently live in.....highly risky. I really don't think the world is about to end for the IBD, nor do I believe that cycle retail is (profitably) expanding beyond the rest of the high street. It's obviously good for business to say so, inflates business value, but the money is only realised upon exit, so best of luck guys. 'Willy waving' is all fine and good, but I can introduce you to SOOO many retailers who tell you expansion of retail units was their death nell. What you really need is a register of profitability /efficiency, rather than no. of trading outlets - it's all out there, especially for larger businesses. So much of the retail; innovation is happeninmg within the IBD network and thankfully we live in a market where many of the suppliers (UK businesses and UK based subsidiaries) do recognise this; there are some who are there for short term gain, fine, but dump 'em. The cycle trade is a quite unique supply chain - look at the likes of the 'sports' trade - cherish and nurture it, but don't slag it off OR you may lose it. Luckily no one reads comments this long, so I'm 0on my own now ;)

I couldn't agree more that's quite an accurate assessment.

i think you have summd it up Billy.