Editor's note: A version of this article appeared in our January issue of BRAIN.
LOS ANGELES (BRAIN) — Alan Goldsmith is returning to his roots.
Goldsmith, 76, the former owner of retail and mail order giant Supergo, is investing in a new retail venture, South Bay Cycle. The location is Manhattan Beach in the South Bay area of greater Los Angeles. A late January soft opening is planned.
"This is a very limited, conservative venture with a mission of providing the highest level of customer service and the best products for a local market," Goldsmith said. "It's back-to-LBS basics — not Supergo 2.0."
Since selling Supergo to Performance Bicycle in 2002, Goldsmith has been involved in consulting for several manufacturers, online catalog retailers and consumer-direct brands. He also has helped retailers with merchandising, operations, and preparing for sale and acquisition.
"I think that my favorite has been helping struggling bike shops," he said. "So, it's also a chance to practice what I preach."
Goldsmith's partner is longtime industry veteran Jim Whitsett, a former Supergo, Cynergy, and Performance general manager. They decided to go into business after Whitsett lost his job in the Performance bankruptcy earlier this year.
Their 2,100-square-foot shop is an LLC in which both are owners.
"Jim is well-known as one of the best shop managers in the game," Goldsmith said. "Aside from investing, my only function will be advisory. It's really Jim's business as I won't have an in-store function.
Whitsett grew up in the neighborhood and has numerous connections, said Goldsmith, who added the store is located in a modern strip center "in an ideal demographic neighborhood with significant cycling activity and history."
South Bay Cycle will be a Specialized concept shop with the motto, "If Specialized makes it, we carry it." Goldsmith said he worked with Specialized CEO Mike Sinyard in 2005 to create a new dealer services department and concept store format to aid retailers desiring a shop and operational upgrade. As a former No. 1 Specialized USA dealer and one of the brand's original 1974 customers, Goldsmith's decision to go all-in with Specialized was a natural.
In addition to pedal bikes, e-bikes will be a big part of the inventory, with a few niche brand categories — like cargo bikes — filling out the lineup.
The staff is taking shape with service director Diego Viasus, who worked with Whitsett at Cynergy Cycles in Santa Monica in 2006, and bike-fitting professional Lauren Mulwitz. Several other former Whitsett employees will round out the team.
SmartEtailing is providing a full-featured website, said Goldsmith, who added that the expected break-even goal is about $1 million and third-year sales projection of $1.2 million. "All of our wages and benefits are at the top of the market range," he said.
Goldsmith said getting Specialized more entrenched in the market here is an immediate goal, along with catering to serious cyclists through fit and mechanical expertise while creating a welcoming, club-like atmosphere.
"Longer term, we hope that this shop can be a foundation for a nice business opportunity for the founders' kids," he said.
After operating large retail operations in the past, Goldsmith will be part of a much smaller venture this time around. South Bay Cycle's size presents its own fit challenges. "But I consider it sized right for the times," he said. "My last store was 20,000 square feet that I opened in Laguna Hills, California, in 2002, with 600-plus built bikes, four POS stations, eight mechanics stations, etc. My four other shops at that time were 10-15,000 square feet."
Supergo's sales were $45 million when it was sold in 2002.
While the industry has undergone extensive change, Goldsmith is excited to re-enter at the grass-roots level.
"It's a great way to celebrate my upcoming 50th anniversary in the bike biz," he said.
"I have felt that the greatest era of bike retail is over for several reasons such as the popularity of indoor cycling, lack of kids cycling, road danger, high prices, slow pace of new tech developments, and other factors that are well-known to BRAIN readers. Nevertheless, I love cycling and the bike business, and I think that there are enough remnants left and potential new market developments ahead to give it another try. But I have no illusions of riches. Basically, I will be content to receive a risk appropriate return — maybe 20% — on my investment rather than a salary."
