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Bike Shipments Soften Through Third Quarter

Published December 1, 2008

BY MATT WIEBE

PHILADELPHIA, PA—It appears that high gas prices and growing environmental concerns had no positive impact on suppliers in the third quarter. Bike shipments to retailers fell 4 percent during the first nine months of the year according to the latest report from the Bicycle Supplier Products Association.

The steepest declines were in shipments of juvenile bikes, with non-BMX 20-inch bikes down 14 percent, BMX/freestyle bikes down 13 percent and bikes with 19-inch and smaller wheels down 12 percent. Bucking the trend in kids’ bikes, suppliers shipped more 24-inch bikes during the first three quarters; the category was up 6 percent.

Shipments of adult 26-inch bike categories including cruiser, comfort and rigid, front- and full-suspension mountain bikes were also down. The biggest drop was in full-suspension bikes, down 14 percent.

Meanwhile, large wheel 700c bike categories—road, hybrid and miscellaneous—were up over last year. The miscellaneous category captures most 29er and cargo bike sales.

“I don’t think these numbers give us any idea of what happened at retail. Suppliers clearly had problems in the spring with slow delivery, which really hurt us this year,” said Chris Speyer, chairman of BPSA’s statistics committee and Raleigh’s vice president of product and marketing.

“If you look at inventory figures during the first and start of the second quarter, they were substantially down compared to previous years. We didn’t have bikes to ship out to dealers and that cut into our business this year,” Speyer added.

High aluminum and steel prices caused component vendors to slow production as they wondered if there was a market for such costly parts. In addition, bicycle demand from oil-rich Russia and currency flush Europe sent a lot of parts and bikes to their markets, slowing down shipments to North America. So suppliers saw lead times grow by one and two months during the early part of the year.

Since the BPSA report only covers shipments through September—before the crash on Wall Street, the bailout and the fall in consumer confidence—Speyer is curious to see what supplier business looks like through the remainder of the year.

Retailers’ take on sales this year was different. Though many said new bike sales have lagged behind last year, the explosion in service, parts and accessories business has more than made up for the shortfall.

“I don’t believe what I read or hear, but only what comes in the door. And our business in October was much better than last year and we are looking to have one of our best years ever,” said Ken Thurlow, who manages Bike Lane in Houston, Texas.

Thurlow said the recession has not slowed plans to move into a new larger shop.

“We are a high-end road and mountain bike shop and we have only seen our business increase during the year. It could be that our local economy in Houston hasn’t been as hard hit as other areas. But we’ve got new customers and sales,” he said.

Apart from being a slow year for suppliers, shipments indicate a realignment of the market. The growth in the 700c category, especially in the hybrid and miscellaneous segments, may show realignment in consumer interest away from 26-inch recreation bikes to utility and commuter big-wheel bikes.

Suppliers shipped 30 percent more bikes in the miscellaneous category this year, bringing total miscellaneous shipments to 32,567, or 1.5 percent of all bikes shipped. While 29ers have been the mainstay of many small builders for years, for many BPSA members this was the first season they shipped 29ers in sizable volume, which the miscellaneous category captures.

The 29er portion of this category is so sizable that the association will survey members about breaking 29ers out into their own category.

Cargo bikes is another growing category that gets tallied as miscellaneous, but the BPSA is looking for more growth before considering a separate category.

“We are starting to see the American market shift toward European-style bikes as more people use bikes to get around and run errands. This is having an impact on high-end road and mountain bike sales,” Speyer said.

Topics associated with this article: Earnings/Financial Reports

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