It turns out that the year has gone rather well so far for Nottinghamshire-based bike manufacturer and distributor Raleigh. But expectations for even one of the best-known names in the business were cautious for 2009, to say the least.
Raleigh MD Mark Gouldthorp explains: “The way the recession had been talked about was a double-whammy with the nosedive of the strength of sterling. It put a huge inflationary pressure on all of the industry with immediate effect.
“Not only was there the question over whether people had got the money to pend on bikes, but we had to put up prices as well.”
But despite those worries Raleigh’s sales have not only been surprisingly robust, they’ve exceeded expectations: “For the first third of the year we’re up about 40 per cent year-on-year.
“We believe that, particularly on the bikes side, we’ve got the range right and that the mix has paid off. It’s also a combination of decent weather, that the products have justified the prices that we’ve had to put on them and that product availability is better.”
Gouldthorp cites urban 700c bikes and Raleigh’s “standard-issue MTBs” as strong performers, with demand for the latter outstripping supply.
Meanwhile the performance of the parts and accessories market has been something of a revelation, according to the MD: “We’re seeing a huge increase in accessories and it has possibly even overtaken bikes in being on the attractive side of the fence.
“Probably some of my competitors have known that for a long time – but it’s only just dawned on me because ultimately we’re a bike company to start with. It’s a very strong part of the business and there’s more profit in it. For everybody.”
Raleigh’s Cyclelife network – which now has in the region of 135 to 140 stores – has been going from strength-to-strength too, and currently enjoys the kind of mix of outlets the MD had been hoping for.
“We’ve got a nice balance now of brand new dealers coming to the fore with brand new shops and we’ve had a few more conversions recently too. I was at the opening of the Lichfield store last month and it was nice to be in a town that has not been particularly well serviced by bike shops. It’s great to be at the birth of something new.”
“We’ve helped one guy in Long Eaton take over a long-established Cyclelife dealership which had been in an old building off the High Street. He’s managed to move into modern High Street premises and his performance is up around 60 per cent year-on–year. He’s now looking at opening a second shop in Melton Mowbray.”
Raleigh’s role in helping the dealer make those changes is key to what Cyclelife can do, according to the Raleigh MD: “That for me is a great example of what Cyclelife is all about – helping someone take that first shop on, helping move to a better location, then helping him open a second shop – that’s exactly what we’re about. That is Cyclelife in a nutshell.”
Combined marketing firepower is another Cyclelife benefit coming to fruition:
“We’ve just helped put together a 13-week radio campaign in Staffordshire with Ade Edmondson. It features four Cyclelife shops and each of them get a slice. They’ve put in half the cash, costing them £200 each, and we’ve put in the other half. That’s what it’s all about. Individual dealers could not get that deal on their own.”
So, how about the short-term future for Raleigh and its Cyclelife dealers?
“Cyclelife growth is a slow-burner. We’ve still got to have the right products at the right price, and thankfully the sales performance this year really looks like we’ve hit the right mark,” Gouldthorp concludes.
BUILDING INTERNAL EXPERTISE
The firm has just announced a raft of new appointments, with two new members of the parts and accessories team – Jimmy Taylor and Andy Parker.
Meanwhile the sales team has also been bolstered with a raft of new recruits, including Scott Davidson, Peter Hancock, Gary Adcock, Garry Pulling and Nigel Watson.
Raleigh MD Mark Gouldthorp explains: “There are lots of contributing factors to our success. We continue to invest on the sales and marketing sides of the business and those are now at their biggest during my time in the company. We’ve had to cut back on things that are nice but not essential, but at the same time we’ve stuck to our guns in terms of sales and marketing. It really is paying dividends.”