It’s not even May yet, and more than one-third of specialty bicycle retailers report they are already discounting product, according to this week’s BR&IN survey. Yet just a couple weeks earlier this month, at the Bicycle Leadership Conference at Sea Otter, BPSA members insisted their record inventories would not be an issue this year. Nothing to worry about, they claim. We’ve had large inventories before and we sold our way through them.
Guys, let’s be clear. There is either more supply than the market can handle or there isn’t. The distributors insist it ain’t so, but the retailers are already voting with their dollars. Like they say, money talks. And you know what happens to all that other stuff.
Here are the facts, according to the chair of the BPSA’s Statistics Committee, Chris Speyer of Raleigh:
- The industry was sitting on a record 747,000 bike units worth $191.3 million at the start of 2009. But that’s OK, because
- The previous high was coming into 2006 with 718,000 units worth $170.3 million, and we got through that just fine.
As Chris (correctly) points out, it’s only an 11% difference. And what’s another twenty million dollars between friends? But apparently he and his colleagues were too busy adding up their performance bonuses to bother looking at the news for the past six months.
Um, guys, the 2009 economy is, ah—how shall I put this?—somewhat less robust than it was in 2006. Which seems to’ve been the last time you checked.
Let me bring you up to date. In 2006, unemployment was below 5%. The Dow was around 1100. The road bike boom was in full swing and the bike business was skyrocketing.
But that was then. And this—regardless of how much you may try to deny it—is now. In the past six months, the Dow has gone into the toilet and unemployment has doubled. And the road bike boom peaked back in 2007-8. (That means it’s on its way down now.) And all those nice people who bought your expensive road bikes the past few years? Well, they’re no longer in a position to do so. And that turns the $200 million dollars’ worth of inventory you’re so compacent about into a loaded gun. With every one of us in this industry staring right down the barrel.
Then. Now. Different. Got it?
Up Next: OK, we’ve admitted there’s a problem. That’s the first step. Now, what can we do about it?
Tags: bicycle retailers, bicycle suppliers, bike buz, bike industry, BPSA, inventory, NBDA, retailers
May 2, 2009 at 11:25 pm |
didn’t you know ?
“down 10% is the new flat”
????