MONTEREY, CA (BRAIN)—While hope for sales growth in the near future remains slim, Performance Bicycle chief executive officer Jim Thompson is taking an extended view of the retail business and preparing for a rebound in consumer confidence.
Thompson, who has a master’s degree in finance, said he has never spent so much time on the balance sheet side of the business. After a soft fourth quarter he has projected down from single-digit growth to a flat plan as the baseline for this year.
“We’re performing better than the baseline, but we need to get through the year. We can’t sit here and predict sales curves,” said Thompson, who sat on an economic panel at the Bicycle Leadership Conference last week.
Instead, Thompson is taking a long-term approach, looking at his business in a three-year growth cycle instead of a 12-month cycle. While he is thinking conservatively, that three-year strategic plan does not involve burying his head in the sand.
“Some level of offense we believe is critical for when the consumer does return,” he said, citing strategic investments in a new store concept and online initiatives.
Thompson said he expects consumer confidence to return in mid-year 2010, and Performance will be ready. However, he expressed concern about whether consumers will return to previous buying habits. “This is such a cultural shift, we expect the consumer on the other end of this recession to change,” he said, predicting that we may see behavioral change in spend, the value placed on brand, and the value placed on service. “Brand perception may not be nearly as important,” he said.
For more economic assessment from other industry panelists, see the May 1 issue.