BLOOMINGTON, MN (BRAIN)—At its recent annual expo this past weekend, Quality Bicycle Products announced that it still plans to open a distribution warehouse in Utah, but that it could be well after 2010.
“We are still working on locating a place in Utah,” said Todd Cravens, director of sales and customer service. “I do not expect that we will be open by 2010. However, we will ultimately open a facility there.”
BRAIN had reported last fall that QBP planned to open a distribution center in Utah by early 2010.
QBP president Steve Flagg cited different reasons for the postponement. Fuel surcharges on shipping are going away making it not as expensive to free freight orders. Also, the Bloomington warehouse won’t reach maximum capacity for at least another year, relieving some of the pressure to open a second facility within a year.
Though the economy has brought land values down in many markets, they still remain high there, Flagg said. He said leasing terms—which previously were only available for 10-year periods—are slowly becoming shorter and more favorable, and QBP is closely monitoring the real estate market.
In these trying economic times, QBP may delay other major capital investments as well that aren’t immediately necessary, Flagg said.
“You got to plan for the worst,” he said. “It’s such a huge unknown this year. I want to see what the floor is then I’ll start planning for the future.”