Export manager Robert Schatton speaks to Jonathon Harker about imports, cheap manufacture in the Far East and whether the firm is looking to expand into new sectors…
When we spoke to SKS last year, the company told BikeBiz that it had seen its best ever UK sales in 2008. How have sales in 2009 compared over here?
In 2008 indeed we had the best sales ever in the UK. Despite the bar being set very high last year, we can say contentedly that we were nearly able to match the previous year’s figures.
Against the background of the year of economic crisis, where Germany’s main export industries – automotive and mechanical engineering – had to face high drops in turnover we are more than satisfied with 2009’s performance.
At this point on behalf of the entire SKS team I would like to thank our three British distributors which had an important share in this success [Chicken Cyclekit, Madison and Raleigh]. We had reduced the number of distributors in the past significantly and we are convinced it was a right decision. Together our three partners cover UK’s whole bike market.
Does SKS use multiple distributors in other territories?
In some countries we have only one exclusive partner. In others like the Netherlands or Spain we are multi-distributed.
What are SKS’ top territories around the world? Where does the UK figure in the list?
The top territory is Germany of course, but the UK is a very important market for us, with a long tradition. Due to your climate we are performing very well with our full coverage and snap-on mudguards.
In the near future we also foresee unexploited potential for us in both the pumps and multi tools sector.
Is the Eastern European market proving difficult?
Either more or less, in some Eastern territories we are doing very well, in others it’s tough. The Eastern European market is very price sensitive. Due to the fact that we produce in Germany it’s a big challenge for us to compete with the low-cost products coming from Asia, especially in this market. We strive to convince the customer that in the long run, buying cheap is often expensive.
So is it tough to retain manufacture in Germany and resist cheaper manufacture in the Far East?
It depends. If we supply a unique and inimitable product with excellent service it’s less difficult. Yet we have resisted successfully and we hope it stays that way.
What are the benefits of manufacturing locally?
Sad to say, companies that develop and manufacture their products locally are few and far between these days. We control the entire production process of our products straight from our home base in Sundern. This includes everything from the first product idea on to the CAD, through mould construction, injection moulding, extrusion, to assembly and packaging. Even DTP work for catalogues and packaging designs are done by our own employees now.
The economy looks to remain tough in the near future. Does that concern SKS? How do you predict sales will fare over the next 12 months?
In our opinion there is no reason for any concern, taking account of the last two years positive development and latest figures of the first half of 2010. For this year we expect a similar result or even a slightly better one. As we have got a big OEM business, the e-bikes trend helps us to raise the sales in several segments.
Does SKS operate in any sectors beyond cycling? How are they performing in the current market?
Yes, it does, including three companies belonging to the family-owned SKS Karl Scheffer-Klute enterprise
group: SKS Metaplast, Blomus and Schött.
They all operate in totally different fields of industries. SKS Metaplast produces bike accessories and customised system solutions made of high-quality plastic for building services and sanitary engineering plus automotive industry. The company Blomus offers a complete line of exquisite and unique stainless steel products for the home and office. The third enterprise, Schött, supplies the automotive industry with aluminium die-casting parts and regrettably has been hit badly by the market crisis last year.
How many staff does SKS employ for the cycle side of its business?
SKS Metaplast employs around 200 people in the bicycle sector. As we have a long history of about 80 years, often the second or even third generation works in our business. We are one of the most important employers in the area of Sundern, hence we feel a close bond to the region.
What have been the key new products over the last 12 months for SKS?
Over the last two years we launched a lot of new products. For example our new Aircon 6.0, a high volume floor pump at a reasonable price level especially for offroad bikers. Or our new motocross – an aggressive-looking mudguard pair Grand M.O.M. and D.A.D. for mountain bikers seeking something out of the ordinary in terms of design.
Furthermore we now offer our new smart 164mm long Supershort mini pump with a bit more than 100g and a detachable aluminium T-handle. With Tom14 and Tom18 our customers now can find full metal multi tools in our range. In addition we’ve launched two new product categories – saddle bags and bottle cages.
What are the main marketing channels for
SKS uses several channels in order to reach its customers. On the one hand there are, for example, the bike fairs and festivals where we show our products and have direct face-to-face contact with the consumers and our distribution partners. Here our new impressive 30ft long SKS-truck often functions as a mobile exhibition and promotion stand. On the other hand we insert advertisements in big bike magazines to bring attention to our news and keep the brand SKS in customer’s mind.
We also do a lot of sponsoring activities which are focused more on amateur bike events than on the pro scene. Since this year we even have an own in-house graphic designer so we can be more flexible and faster regarding development of ads, packaging, product labels, publications and so on.
The SKS brand has been in existence for over 75 years. Has the brand’s philosophy changed over that time?
I think from the start SKS has been following one key philosophy, which is producing quality and offering outstanding customer service. Our famous floor pump the Rennkompressor epitomises our philosophy. Many customers have been using this pump for more than 30 years and we often receive mails in which they praise its functionality and the great customer care regarding spares. That was also a reason why in the year of 75th anniversary we brought out a limited special edition of the Rennkompressor, de facto a SKS image product.
What shows will you attend?
SKS is exhibiting with a booth at the Bike Expo in Munich, at the Eurobike show, at the Bike&Trimm in Austria, at the R’Bike and the Rock d’Azur in France, as well as at Bike Motion in Holland.
What are the main dealer benefits of stocking the SKS product range?
After the sale our products, in fact, are truly sold – we have relatively few complaints and many satisfied customers due to our high-quality standards.
For shop interiors we offer remarkable SKS-orange packaging and in case of mini pumps even blister packaging, in order that the consumer can test and convince himself before buying. Other benefits are easy handling with precise multi-lingual instructions, a high innovation rate, excellent spare part service, decades-long experience and high availability.
The bike tools part of the SKS business is still young compared with the pumps side – how do the different areas of the business compare in terms of size and importance to SKS?
Originally producing just pumps, our core business is now, and will definitely remain, pumps and mudguards. Starting to broaden our product range with the launch of multi tools this year we continue with saddle bags and bottle cages. We consider new different sides of the business as supplementary.
That was primarily our cross-selling strategy for our field force in Germany. In 2009 we started dealing directly with dealers, so we are now able to offer a bigger range.
Is there any chance that SKS will expand into any new sectors?
But of course there is a chance, and this is shown with our latest developments, and our new product ranges. However, in the medium term a further expansion is not planned.
What will be the biggest story for SKS over the next 12 months?
The British pound will gain double power against the Euro and the VAT in UK will drop back to 15 per cent.
Is there anything else you’d like to add?
Please feel free to provide us with any information, comments, suggestions or criticisms via mail straight to email@example.com.
Any kind of feedback is important for us and helps to improve. In case you are attending this year’s Eurobike show you are more than welcome to visit us at our huge booth A5-400.