Off the back of an expanded HQ in Saltash and a couple of record sales years, BikeBiz headed to the South West to speak with Silverfish UK MD Darren Mabbott…
It has been a strong couple of years for Silverfish, with almost regular reports of breaking sales records. How come?
We’ve invested in people certainly and we saw a lot of growth last year through expansion in Germany, which has been a big part of it. We have five brands we're distributing there, Yeti being the largest. We also saw a lot of growth from Race Face and Mondraker.
We expanded our rep base – we had three for a long time, now we’ve got five. We grew the in-house sales team with more guys on the phone. We expanded customer service and support, we’re doing more tech support, warranty and servicing work too.
We just found that a lot of growth was organic. We’ve been going for 16 years now and we’ve gained trust with the dealers. It can take a while.
Two years ago we had a fairly tough year, I think the whole industry did. 2012 saw some atrocious weather and we were so far off target by the time the Olympics started. Despite that, all the publicity for cycling led your acquaintances to slap you on the back because they thought it must have been going great. We had been telling everyone it was tough – shops were shut in April because of the bad weather. Of course the Olympics arrived and all our suppliers could see the glorious sunshine on the TV coverage and it looking like we’d been spinning them a yarn! But from that August onwards we have beaten company targets and previous performance every month.
We’ve expanded into road as well, which has really worked for us. Spiuk was a large part of that. It’s a big Spanish brand but it has very little presence in the UK because it’s such a big range and most of our competitors have a competing shoe or helmet line and you had to commit to the whole lot. It was a perfect fit for us and an immediate ‘in’ into a lot of road stores because we had a full, immediate product range.
All of our customers were asking us for road product and a lot of the guys here ride road so it felt like a natural progression. We’d go to Eurobike to look at the brands available but so much of it is samey. We wanted a good fit for us and Spiuk felt like that and Ritte too - that’s a Californian wannabe Belgian road bike. Their ethos is a perfect fit. Super Caz came on board the same year. It’s funky but expensive handlebar tape and it’s a good quality product that works and is a bit different to what else is out there.
Skratch is a fairly new addition and really part of the growth plan for this year. We have been looking for a nutrition brand for a number of years. I’ve been to Vegas and tried so many nutrition brands. We started talking to Skratch a while ago, but they weren’t ready for international expansion. We thought they would forget about us when they were big enough, but we met again in Vegas and I think that will be a fairly big brand for us this year. We’re doing a big push in road because we have eased ourselves in quite gently. Now with Ritte, SuperCaz, Spiuk, Easton - we have a massive road offering. This year we’ve got our own road team - Eastone Ritte - it is really new for us so it’s quite exciting. We’ve not done it before.
All the brands we have do a bit different - there are no brands there for the sake of it. Everyone serves a purpose. We ask ourselves 'would we use it?' It’s something we need to believe in and feel passionate about to distribute and sell them. We need a good relationship with the brand, but the brand needs to be good quality and a good fit for us. The likes of Race Face have been there virtually since day one, Rock and Roll, Cove, Turner, SDG…they are all brands that I guess are friends of Silverfish as well.
We’ve invested in infrastructure as well as staff. We feel we offer good customer service and support and we feel that we’re pretty good at distribution and marketing.
How did the move into Germany come about?
There was an opportunity in Germany with Yeti particularly. We tripled distribution of the brand there in year one. Yeti was perceived differently in Germany so there was work to be done, but we were confident we could do it. It’s not just shipping boxes, there’s a lot of marketing and promotion – we like to really represent the brands. We are Race Face in the UK, for instance, and dealers feel more confident that we’ll back up the products we’ll sell.
We had been looking at Europe for a while. There’s the opportunity to expand with other products there too. We could have soft launched in Italy or France, but decided to go for it in Europe’s biggest economy. Germany is a challenging marketplace. There’s lots of brands that go direct and price points are fairly entrenched. A lot of boutique brands like Yeti, Santa Cruz and Turner really don’t have much foothold in Germany at all. There are so many German bike brands that compete at a value for money, while we compete at the high end.
Your growth has seen you move and increase the size of Silverfish’s HQ…
This is our third expansion/move. This time we moved into the unit next door. There was someone in it, but the opportunity came up. We’ve still got the other warehouse in Plymouth.
So hopefully you’re not looking to move again soon?
No - our focus this year is doing as good as job as we can with the brands we’ve got. So rather than expansion through more brands we just want to drive more volume through the brands we have.
As Silverfish has grown a lot of our brands have too. We were fairly religious about non-competing product and we still are, but it gets more difficult as brands expand and get into other product areas. We make a commitment to carry their full product line, which I think is pretty unusually in the UK and globally.
It is very much a partnership with suppliers. They will assist us at trade shows in the UK and they feel confident we are handling their brand as they would if they were here. We feel pretty passionate about the industry. There are quite a few of us that have been here a long time, so we have a long-term relationship with our suppliers and our customers too.
We're proud of our marketing. There are demo programmes and demoseries, athlete sponsorship…last year we got Hannah Barnes on Yeti, Steve Peat back in the day was on SDG and Evoc...The Easton Ritte road team is a focus this year, but we’ve still got Flanagan and Scott Beaumont on Yeti and we’ve got a new XC team for Yeti. It’s 30 years of Yeti this year so we thought it would be great to get back to their roots and they’ve some phenomenal XC bikes in the range. I could go on for hours about sponsorships, all the way down to grass roots and trail centres, at Cardinham woods particularly because we ride there regularly and we’re very conscious of being a Cornish business. It’s not a hotbed of cycling, but it is getting bigger quite quickly. There are a lot of events down here, it’s pretty strong.
Has it been a good 12 months for the cycle market generally?
I’d say definitely, yes.
We’re passionate about what we do. As we get older we’ve done all those angsty teenage years and now we just want to get better. We’re concentrating on getting the supply chain right, getting the product out more efficiently, getting the right support out there.
I think yes we are good at what we do but there has been some growth in the market - nothing like what people would expect - and I think we are taking a bigger share of it. I think we are pretty well respected and we like to think we are good at what we do and offer a phenomenal service to our dealers. We are focused on them and improving customer service levels to them, like with our demos and product launches in stores.
You have mentioned you aim to have a higher stock level so retailers don't have to wait for product…
Yes. Distribution businesses have changed. There's much more call for 'just in time' now - there’s a lot of choice for stores and things have changed. You used to launch a product and people would wait two months for it and be happy about that. Now everything has to be tomorrow. You have to grab your balls by your hands and get your forecasting as accurate as you can. The days of me sitting down with Ritchie and licking your finger and sticking it in the air…we need to be more analytical and our forecasting has to be a lot more accurate.
One of the challenges for distributors is the dealers want stuff increasingly just in time, so forecasting is a challenge.
Everyone wants stock for Easter, that’s been the same since day one, but it used to be more spread out through the year. So we take a phenomenal amount of stock in from January to March which is why we had to expand our warehouse footprint.
Distributors and retailers have told us that it is getting more difficult to forecast, and you’re saying forecasting is getting more important, so it sounds like forecasting is getting to be more and more loaded. Is it harder to predict consumer buying patterns?
I love the industry to bits, but we don’t half make life difficult for ourselves. 29, 26, 27.5, 27.5+...you look at it and we understand it because we live it everyday, but I’ve got friends of mine who are super keen cyclists, but they ask my advice on what bike they should buy because they have no idea what they should be riding. As an industry we need to get better at educating the consumer, but that’s so difficult because we’re lots of different people and everyone has got an interest in pulling it this way or that way…that is part of the challenge. As a distributor we work closely with the brands and retailers and you try to get a feel for where the market is headed.
On top of that we have a fairly big marketing team here now, we’ve expanded that rapidly. For a long time that was Pete Drew. You look at the media landscape now - it used to be just print mag and we had ten brands. Now we’ve got 20 and now there’s online and social media and video...there’s so much more involved in putting your product out there now. We’ve always been pretty proud at what we do with our advertising and we wanted to get back to the early days of lots of coverage and positive editorial - as soon as people use our products they do well because they are all good quality.
I was really pleased we saw the focus we did last year. We weren’t really centred on growth last year, we wanted to expand in Germany and it was more about improving internal procedure and getting better, expanding teams. We added a lot of cost to the business last year. We wanted to push on and improve our skill set, to grow the business further.
This year we’re absolutely flying. I don't thing the Olympics has any bearing on it whatsoever, but if you go back to 2012 you look at the economy more widely with more trail centres and the weather in the UK last year - a lot of our customers love the super high end but a lot of what funds that is the bread and butter moms and pop bikes and if it is pissing down then a lot of them won’t be taking their bikes out of the shed and get them repaired or buying a new bike - weather has a huge impact on our business. Since August 2012 we are having proper seasons. Spring and summer last year was phenomenal.
Our year ends in October so this year has seen our biggest November, December, January and February ever, individually and combined. A lot of that is coming from stalwarts and brands we’ve been doing for a while like Mondraker, Race Face and Easton (though that’s new) then Spiuk and Ritte are really picking up.
Yeti launched the SB5 and 6 and we’ve sold out. We took a load and they sold out almost instantly. It’s a great example. The SB6 is a £6,000 bike, so how many do you forecast? That was a completely secret launch so we couldn’t tell anyone about it, so how many do you order? That’s part of the challenge. We went for what we considered to be really ballsy. We figured that if it was a year’s worth of stock that would be fine, but they all sold as soon as they landed. So I think if we have another summer we’ll achieve phenomenal growth here again at Silverfish.
Last year was fantastic but we were maxed out, but with the extra space and staff it is giving us some extra bandwidth. We were so rammed we increased the skills in the business.
It is really exciting. Where will be end up? I'm really excited to see what the new marketing team does - there is now so much more opportunity. Mondraker is genuinely through the roof so where will that end up at the end of the year? There's the Easton Ritte road team for the first time, so that's really interesting to see how that works out.
And then there is Skratch – we’re new to nutrition, but it has been really well received. I think we have no idea how big that could be. It's a consumable and we’ve never had a product like that. When you order a 40ft container of nutrition that s a phenomenal amount of sashets. You look at it and wonder will we ever sell them all. But when we showed it at Core and the reaction…I think we will sell a couple of containers a year. It really fits us. It’s all natural, in Boulder Colorado. Looking to expand globally and into other markets. We are talking to running and climbing stores so it gives us more exposure to different retailers in the UK. Even Californian superbike brands that race in the UK were onto us straight away when the news broke [that we were taking it on]. Skratch had good UK sales - but people were buying direct from US retailers. We’ve had a lot of European customer coming to us now too.
This year will be really good. We've a new operations and supply manager and we’re pretty nailed on the team now. There are 36 of us now. For so long there were six or eight of us. The focus has been on not getting more professional, but introducing new skills to the business and hiring new skill sets in.
Currency rates are a challenge. Their volatility can be hugely challenging with hedging currency.
If the weather stays like this the season will take off and for everyone. You have to make sure you are ready with the stock. I look at our portfolio and I feel pretty confident. I think our dealers are ready for it too. Lots of them have been with us since day one. They have grown with us. They have the confidence in us and when we bring in a new brand they know we believe in it. They know we will support it and market it. We had that ethos when we started. We are here for the long term. Not everything will be rosy every year, but people are confident in us.
Are there more IBDs out there?
The number has remained fairly constant. It seems like a lot of new stores opening up, but we don’t support the online only stores that are opening. We already feel we are well represented online so we are concentrating on IBD network.
We will send a rep to see a new shop or what their plans are. We love it, seeing new retailers and what they are going to stock. If they are next door to an existing customer we won't work with them. But yes, it is fairly flat in terms of number of dealers out there.
The most successful shops are the ones who specialise in certain areas. Some have too much choice. In 20 years in the industry that’s probably been one of my biggest bugbears. Why stock ten different handlebars at £60? If you insist on a choice have two or three. But really it is better for the customers, you and the supplier if you focus on certain price point, products and brands you can support. Otherwise customers will come in and see a wall of handlebars and probably leave empty handed, more confused than when they went in.
But if you have three price points, say, with clear reasons for the different prices like material, graphics, etc, that works.
It's almost like having a story for the consumers they can make sense of...
Some retailers talk about ‘Good better best’ options and not giving them too much choice. They can’t compete with online for choice and an online retailer is looking at different things like how many a hits a brand page gets.
For bricks and mortar shops there is someone in store and they want to buy one - they don’t want to see 100 brands. They don’t need it.
Again it goes back to the forecasting challenge. We won trail bike of the year for Mondraker last year. We can’t forecast that and it had a phenomenal impact on sales. That has carried on this year. We had good stock levels and so did Spain so we appeased most of the demand and we brought forward the next launch for the rest. One of the advantages of having a tight relationship with a supplier is you can do things like that. This year we launched a special edition Mondraker Foxy that was basically a UK edition specced as we requested. It sold out virtually instantly. You only get that with a high level of trust with suppliers - they were happy to spec something on our behalf as they knew we would sell them. And dealers like having something a bit different.
This is an extended version of the article printed in the April edition of BikeBiz, which can be read online or downloaded for free.
This month the BikeBiz Regional Spotlight is focused on Wales and the South West.