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Third Quarter Sales Reflect Weak Growth

Published December 3, 2007

BY MATT WIEBE

PHILADELPHIA, PA—Bike shipments to bike shops grew a meager 0.4 percent during the first nine months of this year and sales grew by an equally modest 2.7 percent, according to the Bicycle Product Suppliers Association (BPSA).

Even though third quarter unit shipments were modest, they were strong enough to offset the 3 percent drop over the first half of the year. Sales were likewise strong enough during the quarter to lift the flat report at six months.

“We sure did have a strong third quarter,” said Steve Thomas, Jamis’ national sales manager. “I’m not really sure why, except the market did start to climb over 1,300 in August and September, that could have given people some confidence. But there was no significant weather during the period,” he added.

He also noted that while Jamis does not do early introductions, there were some aggressive early ’08 introductions from other suppliers. However, few of the new models seemed to have shipped during the quarter.

Three of the fastest growth categories this year are juvenile bikes—20-inch, 19-inch and below, and 20- and 24-inch BMX/freestyle models—with hybrid and full-suspension bikes rounding out the list.

Road bikes, which fell 4 percent in sales and units shipped, remains the dominant market category representing about a third of supplier sales. Front-suspension bikes are a distant second, providing suppliers about a fifth of their earnings.

Pavement categories—26-inch cruisers and comfort bikes, road and hybrid models—continue to increase their market share, up more than 4 percent since 2004, and now represent 55 percent of the overall market.

Hybrid bike sales, up 14 percent over last year, are driving pavement’s gains, especially since road bike sales are down.

BPSA’s hybrid category includes all flat-bar 700C bikes, from comfort to city bikes. And if the popularity of city bikes at Interbike serves as any indication of sales, it seems they will continue to be a growing contributor to the hybrid category.

Mountain bike sales are down 3 percent from last year. The category now generates only 35 percent of suppliers’ overall sales. Full-suspension bikes, which have been slowly climbing over the last few years, were up 17 percent.

Suppliers sold only 71,147 full-suspension bikes to retailers, compared to 515,699 front-suspension bikes. However, full-suspension sales captured 70 percent of all dollars spent on mountain bikes due to much higher selling prices.

Juvenile bikes’ sales market share is down 9 percent for the quarter, and 1 percent from last year. The drop off was in the 24-inch derailleur category, down 15 percent compared to last year.

Many suppliers have invested in this category with companies like Trek, Fuji, Scott, Specialized and others offering many new 24-inch models. So it’s not clear if these sales numbers are indicative of the market.

Bike inventory is substantially down from last year going into the holiday season.

Dollar inventory is down 23 percent overall, and units are down 15 percent. Road inventory is down more than 40 percent in dollars and units.

Topics associated with this article: Earnings/Financial Reports

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