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Rain, Heat Cause Suppliers' Sales Drop

Published August 11, 2009

PHILADELPHIA, PA (BRAIN)—Strong sales gains during the first quarter were erased as sales fell by 2 percent through June, and shipments lagged 8 percent, according to the Bicycle Product Suppliers Association (BPSA) June sales report.

Going into the peak season everyone was worried about how the economy would impact bike buyers—the real worry, however, should have been the weather. Spring was either unseasonably wet or hot and supplier shipments month on month tell the story. Shipments to dealers dropped 5 percent in April and 18 percent in May and June compared with last year. Shipments through June were down 118,757 units.

The only categories to show unit growth were road bikes, up 3 percent, and hybrids, up 2 percent. All other categories were down, with big drops in 26-inch cruiser, comfort and rigid mountain bike categories, down 21, 17 and 25 percent respectively.

As shipments to dealers plummeted suppliers kept importing bikes and are now sitting on historically high inventory levels as they were in December. At the end of June suppliers had 285,098 more units in warehouses than last year, with 744,568 units total. Four categories have more than twice the inventory suppliers were sitting on in June last year. Hybrid, road and 26-inch cruiser and comfort inventory is up 216, 114, 117 and 109 percent respectively.

Suppliers claimed they were slowing imports this season to flush the bikes through the channel, however, it is clear from the June report they were importing a bike for every bike they sold. Right now suppliers are sitting on about four months of inventory assuming sales during the rest of the year match last year. On hand June inventory in some categories like cruiser, comfort, rigid and full-suspension mountain bike could last through November.

—Matt Wiebe

Topics associated with this article: Earnings/Financial Reports

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