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Industry Waits On Impact from Falling Euro

Published May 19, 2010

URMITZ, Germany (BRAIN)—The industry is keeping a close eye on the euro this week as the currency continues to weaken against the dollar.

The euro hit a four-year low against the dollar on Tuesday, at $1.2143, but had bounced back to $1.2385 on Wednesday. The weak euro is of great concern to the industry, said Franc Arnold, CEO and founder of RTI Sports, a large German distributor, and Ergon Grips.

“Every $100,000 we buy costs $20,000 more,” Arnold said.

Arnold said right now, the impact on his business is minimal as he buys 90 percent of currency on futures, but it’s difficult to predict the gravity as the situation is changing daily. At the same time, raw material prices are increasing.

“I think the whole industry will be affected. Prices for cycling products will increase,” Arnold said.

Arnold said he would decide whether to raise his prices before Eurobike.

The broader European debt crisis also raises fears that consumers in Germany—Europe’s largest cycling market—will keep a tight hold on their wallets this summer. However, that could free up more product for U.S. in the midst of this season’s anticipated bike shortage.

—Nicole Formosa
nformosa@bicycleretailer.com

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