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Ridley Rides Out Rough Patches

Published January 31, 2011

By Nicole Formosa

PAAL, Belgium—From the beginning, Ridley Bikes was a family operation.

Its roots were unknowingly planted when founder Jochim Aerts’ parents told him upon graduating high school that he could pursue his dream of racing his bicycle professionally so long as he worked part-time. To fulfill those wishes, Aerts’ oldest brother and racing inspiration, then a shareholder of Bioracer, opened the door for Aerts to weld entry-level custom frames for the Dutch company.

So at the age of 18, Aerts’ future business began to take shape in his father’s 200-square-meter garage in the cycling rich Flanders region of Belgium. For eight to 10 hours a day, Aerts cut and welded tubes, typically producing two frames a day. He then spent the next four to five hours painting his frames, and two or three imported from Bioracer Holland. Painting his race bikes had always been a hobby, and Aerts had learned how to operate the spray gun in his father’s workshop.

After two years, the owner of Bioracer decided he no longer wanted to outsource framebuilding, and asked to buy back the Belgium division.

It was a sign for Aerts to concentrate solely on his painting business.

“By the same amount of time of painting back in those days, I could make three times the gross margin building the frame so for me it was a very easy decision,” Aerts said during an interview in his corner office at the company’s new headquarters, not far from where he grew up. “So we sold the frame division to Holland and we invested in the painting line. We were the first in Europe to have our own system.”

He moved out of his father’s garage and into a nearby industrial warehouse, and began selling his painting services to European frame manufacturers. Bioracer remained a customer and Minerva—still a client today—soon came onboard. Other brands like Diamant, Concorda and Red Bull followed.

“In two years time, we had 10 people painting,” he said.

But by 1994, Aerts could see change coming. He was already feeling price pressure from his customers for even the most inexpensive paint jobs. Aerts realized with the knowledge of geometry he gained during his Bioracer days and his expertise in painting, he was already two steps ahead of the competition.

“They were just buying frames, they bring them to me. I paint them, I design them, I did all the graphical things for them and they were selling it. I said, ‘Look, if we buy frames and we do in a good geometry, and we make good frames, we do the graphics, we do the designing. We already have a good name. Why should we not try that?’”

Around 1996, Aerts began buying steel frames in Italy, painting them and selling them under the Ridley name. He also invested in aluminum frames, sensing it would be the next must-have material. In the second year, Aerts offered two steel frames and five aluminum frames, then dropped the steel models altogether. A couple broken frames later, he determined that sourcing aluminum frames in Europe was not a solution, and in 1999, he took his road, mountain and cyclocross frame designs to Ina Group in Taiwan.

“Changing all the models from Italy to Asia went from 50 percent warranty to less than 2 percent,” he said.

It was also around this time that Aerts made two pivotal changes to his business: he took on a silent partner, a respected local businessman who schooled him on being open to acquisitions and taking more risk on investments, and he began looking into carbon fiber technology.

His wish list for carbon fiber frames was simple: stiff and strong. It went against Aerts’ business philosophy to use an open mold from a factory in Asia. He wanted to incorporate his geometry and tube shapes in order to bring new and different product to market. He hired a consultant in Italy who developed what would become the diamond-shape Damocles frame built using tube-to-tube frame technology and the first-ever oversized head tube.

It was an instant success among Ridley’s professional riders who won two national championships in the first year. But the company’s biggest innovation would soon become its biggest setback.

After the Damocles’ initial success in 2003, demand spiked and far exceeded Ridley’s Italian manufacturers’ capacity of two to three frames per day. Ridley’s Taiwanese manufacturer, Ina Group, didn’t yet have the technology for tube-to-tube frames and neither did Advanced, the only other mass production carbon fiber manufacturer not supplying frames to a competitor. They suggested using a monocoque frame instead, and Aerts agreed, a decision that still nags at him today.

The production monocoque frames debuted in 2005. It was the first year Ridley sold outside the Benelux region, as well as the first time the brand sponsored a pro tour team. Those factors coupled with success in 2004 when Ridley sold every carbon fiber Damocles frame it could get from Italy, indicated the €10 million company was poised for a boom.

But trouble loomed when the frames started breaking. In the first year, 50 to 60 percent of the pro riders’ frames cracked. Engineers had tested the frames in small lines, but when they moved the molding to mass production, they didn’t have the same control over the carbon layup. Because of a poor in-mold structure, the layers didn’t bond well and the weak layers cracked.

“It was a very, very big setback for us,” Aerts said. “Advanced had good capacity so we sold a lot of frames everywhere in the world because it was still a hot item, so we were hit hard.”

Aerts recovered by returning to a trusted technology and switching suppliers—Ina Group by then had the ability to build tube-to-tube frames—and replaced many of the 3,000 to 4,000 frames produced in 2005.

Ridley didn’t lose money that year because its aluminum business was still so strong, but the product image was ruined and Ridley’s momentum screeched to a halt.

“Oh my god we suffered hard. And I still believe if we had made, back in that day, the right decision, we would be much, much stronger already internationally,” he said.

Despite the blow, Aerts never doubted the characteristics of carbon fiber and continued developing new carbon frames. In 2009, half of Ridley’s 27,000 frames produced were carbon fiber.

Aerts has also remained loyal to his first love of painting, opening a new facility in Moldova three years ago, and upgrading the facility at company headquarters in Belgium.

Today, Ridley is a €20 million company with 70 employees, and has grown every year of its existence, often in double digits. Looking ahead, Aerts sees a future in aerodynamics, and plans to build a private wind tunnel this year in a warehouse at its headquarters. Ridley will also introduce an integrated brake system for road bikes. He sees new products and growth in 4ZA, Ridley’s independent parts and accessories company, and is keeping an acquisition of an electric bike company as a possibility.

At 39, and after two decades in the trenches with Ridley, Aerts doesn’t see himself slowing down any time soon.

“As long as I keep enjoying what I’m doing today and I can see we’re moving forward toward our set goals, maybe in 20 years I will be as motivated as I am today,” he said.

And the company continues to reflect Aerts’ family allegiances. His wife is the company’s financial director and his father who was there in the beginning, now retired from the postal service, manages the vehicle fleet, tool and fixture shop.

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