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Young Guns Change Rules of Retail

Published March 1, 2010

Retail
BY MATT WIEBE

ALBUQUERQUE, NM—Imagine starting a bike shop in the midst of the worst recession since the Great Depression, without the help of bankers and as a young 20-year-old with little to no retail experience.

Sounds like a recipe for failure, but today’s twenty-something retailers are doing just that. They’re launching successful businesses in the most hostile business climate in more than a century.

While their personal stories and motivations are different, their business philosophies, work ethic and personal sacrifices sound surprisingly alike.

“When someone walks in I’m not thinking how I can sell them a new bike. I’m more interested in creating a type of shop people feel comfortable in just hanging out, listening to music and getting excited about riding,” said Sam Peifer, who opened Fixed & Free in Albuquerque, New Mexico, in July 2008.

Those who hang out at Fixed & Free get much more than a pile of Italian magazines, bike DVDs, a large flat screen and an old couch. The shop rents tools and work stands and encourages customers to stop by to work on their bike.

The bread and butter at these shops are custom builds, commuter, fixie and mountain bikes. And many customers are referrals from other shops.

“Most established shops want to sell a bike off the floor. They don’t want the hassle of customs,” said Cliff Pinto, owner of Pedal the Peaks in Durango, Colorado. “Customs are great for me. I like the whole process of talking with the customer and picking parts. It’s most of my business.” Pinto bought his shop from the previous owner in 2004.

Pinto feels he’s an atypical 28-year-old shop owner given his 18 years of experience working in shops, at bike companies and racing. That aside, Pinto said he shares the struggles other small shops face: the slow winter season, limited cash and difficulty talking with brands.
“Even with my industry connections it’s still hard to have a serious talk with some brands at Interbike,” Pinto said. “But each year it gets better as more people get to know the shop.”

None of the owners interviewed for this story carried Giant, Specialized or Trek. Most of their business is with distributors rather than complete bike brands. For many, complete bikes from brands like Surley, Soma and Charge are their biggest sellers.

“Even small bike brands are fiercely territorial. If we get our calls to brands returned, a shop 10 to 15 miles away will complain and the conversation will go no further,” said Sean Brock, the majority owner in No Brakes, a worker cooperative in Atlanta, Georgia. “It’s just easier to buy bikes from a distributor.” No Brakes opened last July.

One market segment these shops avoid is high-end road. Getting a good brand is close to impossible and there isn’t enough cash flow to floor even a few top-tier bikes. But owners cited a different reason for passing on the high-end road business.

“Many road customers are in their 40s and 50s, and it’s hard to communicate with them,” said Andy Bixenstine, who opened Blimp City Bike & Hike in November.

Fixed & Free’s Peifer chose his shop manager in part because of older road riders’ uneasiness in dealing with a young shop owner. “Because of our location we get older racers, 50- to 60-year-olds, but they don’t relate very well to someone my age,” Peifer said. “I hired a 40-year-old manager partly to have someone our older customers would feel comfortable talking with. I have no problem talking with older commuters, but road riders are different.”

Jeff Wollenberg, who owns Papa Wheelie’s in Durango, Colorado, combines a retail shop with his bicycle messenger business. The retail side, which has been open a few months, focuses on fixies. Wollenberg said Dutch cargo bikes used to carry large cargo loads have generated a lot of local interest in that style of bike.

For these young retailers, their situation dictates their business model. Most are self or family financed so cash flow is tight and ordering from big brands or stocking large sales floors aren’t options.

They don’t target enthusiasts with their bikes or apparel in part because that segment is well served. They find opportunity in niches other shops ignore and by focusing on service. Their core customers are people who use bikes for transportation. And they’re not likely to deviate from this model over time.

“If it wasn’t for suppliers like Hawley, Highway Two, Euro Asia and a few others who supported us from the beginning, we couldn’t have made it,” said No Brake’s Brock. “We are growing, moving into a bigger shop, but we will remain loyal to these suppliers.”

With the exception of Pedal the Peaks, none of the owners interviewed were serious racers. They got into the business for lifestyle reasons, so they imagine their businesses will continue to focus on people who get around by bike.

“I have no intention of chasing big brands because then we would be like everyone else and have no freedom,” said Andy Reed, majority owner of Box Dog Bikes, a co-op in San Francisco, California that opened in 2004. “We push the lifestyle aspect of bikes, and having the right brand is not as important as creating the right shop.”

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