The first new Cyclelife stores are now opening. BikeBiz.com paid a visit to Tracey Maid Sports and Cycles of Long Eaton, Nottingham.
This is owned by brothers Richard and Lee Jones, who took over the struggling store in July. When asked why they had bought into the bike trade, property developer Richard Jones said: "To make money."
He saw the Cyclelife franchise programme as an opportunity to bring Tracey Maid into the 21st century.
"We researched Raleigh, we pulled their accounts, had our accountant analyse them.
"We’re not ignorant, we’ve listened to other IBDs, we know Raleigh’s history. But this is the start of a new era for Raleigh. We want to be on the ground floor of this new era. Like with any product’s life cycle, those who get in first get the most benefits."
Raleigh MD Mark Gouldthorp first started talking to BikeBiz.com about reviving Cyclelife at last year’s Interbike show in Las Vegas. A year down the road he has a fully-fledged franchise programme.
But Raleigh will not be attending franchise shows in the hope of signing wet-behind-the-ears bike enthusiasts with redundancy cheques, it’s aiming Cyclelife at existing IBDs.
Gouldthorp is scathing of previous franchise offerings in the bike trade: "There have been attempts to establish UK buying groups or franchises. However, they have lacked the initial critical mass, and thus most fail, or at best, lack any ambition beyond attempting to wring further margin from suppliers.
"Many of our dealers understand that to stand still is to lose ground; they recognise the opportunity and advantages to be gained from participation in a national retail network. In addition, they enjoy the simplicity of single-sourcing across a large range of quality brands, at advantageous terms, via proven Epos and interfaces with a B2B site."
The first Cyclelife adopters will be those IBDs who "remained loyal" to Raleigh, said Gouldthorp.
"They might have been 5-star dealers in the past, dealers who stayed with Raleigh through the bad times."
Gouldthorp says he targeted 60 IBDs for the initial launch of the programme.
"Thirty got it straight away, the ones who were already Raleigh through and through. The other thirty liked the ideas but were not ready to come on board because of Raleigh’s lack of stability in the recent past and the problems with availability. It’ll take six, twelve, eighteen months for those dealers to be fully Cyclelife. Product availability has picked up, phone answering has picked up. We’re now in much better shape."
The franchise programme is a co-funded buy-in and ties the IBD to Raleigh bike and P&A brands, although there will be some flexibility to allow IBDs to offer different brands in different localities.
For an IBD to start along the path to being a Cyclelife dealer, more Raleigh bikes and P&A needs to be seen on the sales floor, said Gouldthorp.
There needs to be a "marked movement in stocking patterns," he said.
Cyclelife IBDs go on preferential trading terms and will benefit from group advertising and promotions. The tie-in is for three years. Withdrawing from Cyclelife within three years would require a repayment of Raleigh’s co-funding of the shop refit.
"For those loyal multi-franchise dealers who might get nervous that Raleigh are turning their backs on them, we’re not," said Gouldthorp.
"There are many parts of the country where Raleigh is not effectively represented. This could be because the dealer has retired without successor, or where the standard of retailing is so low that turning the lights on in store is a noteworthy event, or where the dealer has taken multi-franchise retailing to the point of being a brand-bazaar. Raleigh needs to fill the gaps in its regional partner portfolio, and has chosen Cyclelife as the vehicle to achieve that aim.
"It is not our intent to de-stabilise existing working relationships, where Raleighs presence in store is respected and appreciated."
A newly appointed retail development manager has been tasked with seeking out potential retail sites in target towns. He will work closely with Raleigh’s regional account managers to locate potential partners interested in running the store as owner-operator.
"In quite a few locations, an active partnership exists with an established dealer who is keen to open an additional store as Cyclelife; in other areas a likely partner is less obvious," said Gouldthorp.
IBDs make up for two-thirds of Raleigh’s turnover.
NEXT ISSUE OF MAG: there will be a greatly expanded version of this article in Issue 68 of BicycleBusiness, including interviews with the owners of the first three new Cyclelife stores.
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