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Burke: Dealers Key Link in Supply Chain

Published August 10, 2010

MADISON, WI (BRAIN)—While Trek had its most successful year in 2010, company president John Burke admitted to retailers that it left a lot of money on the table due to delivery problems.

“From May through July, we shipped more product than we had predicted in our annual forecast,” he told a packed ballroom last night during Trek World, adding that Trek has boosted its own production and orders from overseas suppliers.

He reassured dealers that Trek is improving delivery of 2011 bikes. It has boosted production at its Waterloo factory for OCLV carbon bikes, investing in new molds and moving production of its Madone 5 Series bikes, previously made there, to Asia. The company has also trimmed lead times on bikes ordered through Project One, it’s custom paint and spec program offered on top-of-the-line road and tri models, which had swelled to 120 to 140 days. Now retailers can count on delivery taking from a week to a month, depending on model and components selected.

However, he told dealers that they needed to be part of the solution. “We need your help; you are part of the supply chain,” Burke said.

Burke said his company had strayed from pushing hard on preseason ordering in recent years, but now he’s emphasizing it once again, particularly for bikes priced over $1,300.

“We really didn’t have preseasons last year,” he said, pointing to one reason why the company was out of Madone 4.5 models by early May. “Order 50 percent of your 2011 forecast by September 15,” he urged dealers. “Why? Because we want to have bikes when you need them in the spring. We need your signal.”

Surprisingly, much of Trek’s sales growth was at the high end. Burke cited double-digit growth in sales of the Madone 6 Series (up 54 percent); the 4 Series (up 73 percent) and Gary Fisher full-suspension bikes (up over 55 percent).

He predicted that road and transportation/pavement bikes will continue to drive sales. Trek has invested heavily in both areas, unveiling new models including the Madone 6 SSL, Madone 3 Series, a revamped Madone 5 Series, revamped entry-level women’s road bikes under the Lexa moniker and its new triathlon platform called Speed Concept for 2011.

In pavement, Trek made major improvements to its highly successful FX line of fitness-oriented bikes, added an entry-level dual-sport model under its Gary Fisher Collection called the Bodega, and ventured further into utility bikes with a long wheelbase cargo bike called the Transport, offered also as a battery-powered e-bike.

In addition to committing preseason dollars, Burke asked dealers to grow their aftermarket business with Trek by 20 percent for 2011 and said that the company is taking steps to attract more of their dollars. It’s introduced new helmets in the Bontrager product line effectively replacing its Trek helmets; trimmed prices on Bontrager apparel and expanded its shoes, gloves, saddles and tire lines.

-Lynette Carpiet
lcarpiet@bicycleretailer.com

PHOTO: Byron James of Brands Cycle and Fitness in Wantaugh, New York, admires the new Speed Concept tri bike with Project One custom paint job.

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