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Frostbike Flush With Signs Of Stable Market

Published March 15, 2010

BY NICOLE FORMOSA

BLOOMINGTON, MN—Strengthened by lessons learned from a challenging 2009, retailers roaming the warehouse at Quality Bicycle Products’ Frostbike open house had recovery on the mind with some even projecting double-digit growth this year.

Steve Doolittle, co-owner of Cool Breeze Cyclery in Mooresville, North Carolina, and Trek Bicycle Store Charlotte, budgeted a 20 percent increase in sales this year, which would put revenue on par with 2008 but below 2007 numbers.

Although unseasonably snowy weather has forced him to close on two Saturdays this year, January sales were up 40 percent at the Trek shop and even at Cool Breeze. That’s on top of double-digit increases at both stores during the Christmas holiday.

“We’re just now seeing year-over-year monthly comparisons that are looking pretty good,” said Doolittle, who trimmed business expenses in 2009 including payroll, which started the year 20 percent lower than last year.

The weather has also been a factor for Bike Barn, a five-store chain in Houston, Texas. Sales were off to a slow start due to cold weather in January and February, said Bike Barn owner Neil Bremmer, who attended Frostbike for the first time with his buyer Casey Meyers.

“We’re still optimistic for this year, but we’re already digging out of a hole when March starts,” Bremmer said.

Bremmer, a Trek and Specialized dealer, said 2009 taught him to pay closer attention to every aspect of the business, but he was able to keep all his employees and continue hiring.

Meyers said vendor relationships are more important now than ever as retailers trend toward smaller pre-season orders and rely more on just-in-time inventory.

Behind-the-scenes communication with suppliers is pivotal to ensure you can buy product as soon as it’s available, he said.

Andrew Lee, owner of Adam’s Avenue Bicycle in San Diego, another Frostbike first-timer, hesitated to predict how business could shake out this year, but said sales, which dropped off last May, started rebounding last November after he doubled the size of the shop to 2,800 square feet.

“As soon as we expanded it went off and we’ve been killing it ever since,” Lee said.

QBP’s business-to-date may also point to signs of stabilization. Todd Cravens, director of sales and customer service for QBP, said thus far retailers have been ordering a garden variety of SKUs rather than big numbers of the latest greatest high-tech product or a popular low-end product.

“I actually think that’s an indication of health,” Cravens said.

QBP finished 2009 up 1 percent, and is projecting 10 percent growth in 2010, said Steve Flagg, president of QBP. Flagg said QBP is also working on improving its fill rate, which dipped last year to 86 percent, but is back up around 91 percent.

“That is a goal for us to maintain something better than 91 percent this year,” Flagg said, drawing a round of applause from retailers and vendors seated for a QBP-sponsored dinner at the Marriott during Frostbike.

Steve Parke, director of sales for Advanced Sports, Inc., agreed with Flagg’s prediction, saying he believes sales growth of 10 percent is realistic for 2010. Parke said the industry could see a year similar to 2007.

“It was a very functional year for everybody. Inventory wasn’t crazy, revenue was in shape, the weather was workable. It’s a good baseline bar,” Parke said, while manning a booth for Oval Concepts, a recent ASI acquisition.

Other Frostbike vendors also reported positive indicators—pre-season orders for Ridley’s 2011 cyclocross line were already up over 2010 less than a week after the program began and DT Swiss tallied record orders through QBP in both December and January.

“Right after Interbike, in November and December, the tide started to turn for us with orders. The gloves came off and people starting coming around some,” said Paul Guebara, sales and marketing manager for DT Swiss.

Frostbike ran from Feb. 18 to 21 with its usual mix of business and technical seminars, building tours, networking dinners and the exhibition itself, where 140 vendors showed product.

Topics associated with this article: Events, Frostbike

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