FORT LAUDERDALE, FL (BRAIN) — A quickly growing startup retail chain in Florida is headed into 2013 with plans for rapid expansion outside its home state.
In May, BikeStreet USA began acquiring established bike shops and employing their owners to help run them. The former owners also take on companywide strategic roles for BikeStreet.
In just over half a year, BikeStreet has grown to eight locations in Palm Beach and Martin and St. Lucie counties—six acquired shops and two flagship store launches. Five more acquisitions are pending in Greenville, South Carolina, and company CEO Pat Patregnani expects to have a total of 15 stores by the end of the first quarter of 2013.
Patregnani is an avid cyclist and the president of marketing advertising firm Zimmerman Advertising. With retirement looming about five years off, in 2011 he considered buying a bike shop or two.
“As I started to look at it, I realized there was a bigger opportunity,” he said. “If you look at this industry, it’s a very stagnant, supply-driven industry—not a whole lot of marketing or advertising to drive awareness and consideration for the sport. So I figure if I, as a marketing guy, if we really started advertising we could take a $6 billion industry and make it into $7 or $8 billion by growing the sport and then taking our fair share of it.”
Armed with $6 million in raised capital, Patregnani started acquiring stores and rebranding them as BikeStreet USA locations, with a mix of 14 different bike brands including Scott, Fuji, Cannondale, Look, Cervelo, BMC and Diamondback.
“We’re not looking for anybody who’s just looking to sell and get out. That’s not our deal,” Patregnani said of BikeStreet’s acquisition strategy. “Our vision, our mission is to have people who are still very much wanting to be engaged in running a bike shop, being a part of something possibly that’s bigger than what they are today, sharing their experiences in a bigger way in the marketplace, and hanging out with us for the next eight to 10 years.”
Aggressive marketing has complemented the business’ growth. In November and December alone, Patregnani placed $200,000 in radio and TV ads targeted at the family market. “The race bikes and road bikes and tri bikes, they’ll take care of themselves if you’ve got a good mix. You just have to make sure you bring the families back out to enjoy the sport of cycling,” he said.
After establishing a foothold in Greenville in early 2013, plans call for further expansion into Charleston, South Carolina; Lexington and Louisville, Kentucky; and Fort Myers, Naples, Jacksonville and Pensacola, Florida.
If store count reaches 50 to 70 locations, perhaps as soon as May 2014, BikeStreet will launch an initial public offering and begin entering larger metropolitan markets. “We have a company willing to take us public at that number,” Patregnani said.