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Throwback Thursday: Phoenix market sees lots of change in seven years

Published October 26, 2017

PHOENIX (BRAIN) — The Valley of the Sun has weathered a lot of turmoil since Bicycle Retailer paid visit to a dozen shops back in 2010. Of the retailers the BRAIN Dealer Tour visited in February of that year, three have closed, two have moved, one expanded, one downsized and at least three are now operating under new owners.

Meanwhile, other stores that weren't part of our Dealer Tour have come and gone. Some, like Global Bikes, have grown from two to four stores over that same period.

"We're the only true growth story that's out there," said Alan Lepak, co-owner of Global Bikes. "The last two years we've seen 25 stores close. Five new stores have opened, bringing it down to about 20 closures.

"In the last three years we have been seeing double-digit growth. Is that growth because of all the shops that have gone out of business? Are we benefiting from the sales of the hopes and dreams of other retailers?" Lepak asked.

Among the stores that shuttered were Specialized concept retailer DNA Cycles; Cactus Bikes, which at one point operated five stores and a touring business; and Tempe Bicycle, a long-standing retailer which at its peak grew to 10 stores. Longtime owner Bud Morrison retired and sold the business, which closed in the summer of 2015.

Several Sport Chalet and Sport Authority stores have also shuttered.

Since our visit in 2010, retailers point to the advent of e-bikes and the growth of the gravel category. Phoenix has a canal system that crosses the entire metro area and provides safe off-street riding, and these nine canals are a mix of paved and dirt/gravel paths.

Service has also gone through the roof at shops. And though Phoenix is a desert, stores specializing and selling beach cruisers have popped up in droves.

BRAIN visited dealers soon after the market crash of 2008, and retailers then noted how sales had been affected by the housing bubble bust, especially at the high end. But Phoenix appears to have worked itself out of that and is in another boom with lots of new construction and low unemployment.

"I would say the market has recovered," said Kale Keltz, co-owner of Bicycle Haus, one of the dealers BRAIN toured in 2010. "If you look from a real estate standpoint, it's high right now. We couldn't do what we did with the store four years ago now because of what values have done."

Bicycle Haus moved into a new location in old town Scottsdale in November 2013, expanding from 1,840 square feet to 7,000 square feet. Keltz said the opportunity to acquire a property presented itself and he and his wife thought it would be a good financial move. So they bought it, tore down the old building and built a new store with showers and a locker room for staff.

Previously focusing on high-end road, the Keltzes have also moved into high-end mountain and gravel now.

"I think there's the internet, then there's the big guys who are getting bigger and the little guys like me who have their niche," said Keltz about how the market has changed.

BRAIN editor Lynette Carpiet is writing an update story about the 2010 Phoenix Dealer Tour, which will be part of a look back at several key markets the magazine has visited since it launched its first Dealer Tour in fall 2008.

Retailers, area reps and others familiar with this region should feel free to comment below or email Carpiet at lcarpiet@bicycleretailer.com with any tips or information.

The look back at BRAIN Dealer Tours of the past will be featured in our December 1 issue, hitting mailboxes in late November.

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