BOULDER, Colo. (BRAIN) — The U.S. Labor Department reported that more than 6.6 million people filed new claims for unemployment benefits last week, surpassing the record set just a week prior. In the bike industry, the news is nearly as devastating, with perhaps half of bike shops in the U.S. either closed or operating at a minimal level, according to a recent BRAIN web poll. Many suppliers, small and large, have made furloughs or layoffs to react to the COVID-19 pandemic.
However, compared to some business segments, such as auto sales, lodging and restaurants, this industry is retaining some signs of life. Some bike shops report their business is up as Americans look to bicycles for safe transportation and recreation — the same BRAIN poll showed nearly a fourth of shops are seeing sales higher than normal. Service work is strong in many places as folks bring in old bikes in hopes of making them road-worthy once again — although even that business seems to have peaked in most markets and might begin a steady decline as the initial demand for refurbished bikes is met.
Sales of kids bikes and repair parts are strong in some areas, while enthusiasts are buying indoor trainers and signing up for online riding software subscriptions. One distributor told BRAIN he couldn't keep chamois cream in stock as cyclists find indoor riding can be less forgiving in some areas.
Sales of upscale bikes and accessories appear to be greatly weakened, even online. But many shops are able to keep some revenue coming in via online orders and pure online vendors are seeing good sales in some categories, such as tires and other consumables.
Employees at most of the largest U.S. bike brands and other suppliers are working from home. While some small manufacturers have closed, others are able to operate in shifts with workers spread out. Several U.S. softgoods manufacturers, including Kitsbow, De Soto, Osprey and others, have converted to producing face masks and other personal protective gear for health workers.
Still, compared to life just a few weeks ago, the news is sobering across the industry. It's impossible to tell how many bicycle retail workers have been furloughed or laid off, but it's clear that thousands of store employees are out of work. Outside the bike world, retail chains such as Macy's have laid off or furloughed thousands of workers. And large retailers who do some bike business, such as REI, Vail Resorts, and Dick's Sporting Goods, have done the same.
On a smaller scale, even bike stores that are operating under strict safety rules are finding it more and more difficult to retain employees, and most say the small amount of business, while welcomed, is not enough to pay their entire staff or their rent. Most are exploring available government loans and benefits as they try to make good decisions that will protect their workers.
On the supplier side, while BRAIN has heard unconfirmed talk of many other layoffs or furloughs across the industry, a handful of companies have announced or confirmed layoffs. They include Giant, which let go at least a dozen employees in the U.S., and Fox Racing, the protective gear and softgoods brand, which furloughed at least that many at its California headquarters.
Additionally, RockyMounts furloughed about a dozen workers when it shut down operations at its Colorado facility; Cane Creek has suspended operations after local stay-at-home orders forced it to close its factory in North Carolina. (BTI shut down its New Mexico and Nevada facilities but has continued paying all its employees).
Most tour and guide companies, many of whom rely on seasonal workers, are unable to rehire their regular staff this spring.
USA Cycling laid off or furloughed about a third of its 70 employees last week. Race and other bike event operators are cutting back on staff while bike fitting studios and indoor cycling operations are laying off or furloughing employees.
Bike and scooter share operators including Bird and Lyft have made layoffs in the cities where they operate.
Dorel Industries, the parent of Pacific Cycle and Cycling Sports Group, laid off 375 workers in its Dorel Juvenile division last week. It's not clear whether Dorel has made any cuts in its bike divisions.
