LADERA RANCH, CA (BRAIN)—Jeff Davis has been on a big learning curve since opening his store exactly four years ago.
“My biggest learning curve is if someone is going to pay $6,000 for a bike, they’re going to wait for it. They know we’re going to get it for them, and we give them a realistic expectation for when to expect it,” Davis told BRAIN editors who visited him yesterday as the first stop on the magazine’s weeklong Dealer Tour of Orange County.
A cycling enthusiast who worked for Siemens for 11 years before he burned out, Davis had written a business plan for a bike shop a few years before he talked his wife into the business venture. Ladera Cyclery was the fifth business to open in a strip mall in a new planned development. In March 2007 Davis doubled his space by taking over the empty retail space next door.
“It grew with the community, it just snowballed,” said Davis, who lives in the planned community with more than 8,000 residents. Davis said 75 percent of his customers come from Ladera Ranch, an area that has been hard hit by the Orange County housing slump.
When Davis opened the shop he worked the service area in the front of the shop so he could greet customers. He asked friends to bring in their bikes to hang from the rafters to make it appear that service business was brisk. Now, he said, he can’t keep service away. He ensures quick turnaround times of five days, even during the summer crush. “We offer quick turnaround times and set expectations that are not more than we can achieve,” he said.
Although he has learned that he doesn’t need to have inventory to make a high-end sale, he stocks an array of brands, including Cannondale, Felt and Scott. His best-selling bike is Electra’s Townie, which is a good fit for residents in the hilly neighborhood.
“I do hear the comment our selection is good, especially because we’re surrounded by concept stores,” Davis said. “I think it’s refreshing for customers to see the number of brands.”
Although Davis said he thinks the media has made the economic downturn sound worse than it is, he has seen a slowdown in his business. He said growth has plateaued, adding that margins have shrunk. “It’s a little more difficult to maintain cash flow,” he said.
Among the steps he has considered to deal with tight cash flow is consolidating into his original retail space. “It’s one of the things we have an option to do,” he said.
Still, he said he is willing to ride out these tougher times.
“I opened the shop to be in the community for a long time, and hopefully my son will take over,” he said, referring to his 4-year old son who was born just weeks before it opened.
Photo: Ladera Cyclery owner talks about his store during the first day of the BRAIN Dealer Tour.