Bicycle Retailer & Industry News

Signs Show Obama Favors Stricter CPSC

11/20/2008

WASHINGTON (BRAIN)�The bike industry could be looking at stricter consumer product safety regulations based on early indications from President-elect Barack Obama.

The Wall Street Journal is reporting that Obama may tap Pam Gilbert, a product safety lawyer on his transition team, to chair the Consumer Product Safety Commission.

Gilbert, who served as executive director of the agency under the Clinton administration, favors working with industry on enforcement and the toughest possible standards, according to the Wall Street Journal.

This means the bike industry will need to do its homework and take the CPSC and mandatory federal regulations very seriously, said Jay Townley, an industry consultant who worked with the CPSC to develop the bicycle regulations in the 1970s.

�The Commission may look disorganized, understaffed and overwhelmed today, but under an administration and chair person that intends to apply the Consumer Product Safety Act to the full extent of the law and regulation at its disposal, it will get the funding the recent amendments specify, and will quickly become a regulatory force to be respected and dealt with expeditiously, objectively and very carefully,� Townley said.

Historically, the CPSC has been on the bottom end of the priority list, but the agency was thrust into the public eye last year during a spate of massive toy recalls.

In August, President Bush signed the Consumer Product Safety Information Act of 2008 into law, authorizing a significant increase in funding�up to $136.4 million by 2014�travel allowances for commissioners and staff and the authority to have up to 500 employees working with the Commission by 2013, including personnel to be assigned to duty stations at U.S. ports of entry or to inspect overseas manufacturing facilities.

If that funding is appropriated under the Obama administration, it could mean stricter oversight of CPSC regulations.

The new administration has said it wants to double the agency�s budget, streamline the nation�s product recall system to reduce companies� involvement in the process and hike fines for safety violations, the Journal said.

The new law requires bike manufacturers to ship bicycles with a certificate of compliance stating the products meet all standards overseen by the CPSC. The law also includes strict regulations on the amount of lead in children�s products.

The Bicycle Product Suppliers Association has been working with the CPSC to determine the exact implications of the new law on the industry. The BPSA also hopes to work with CPSC staff in the future on updating the outdated bicycle regulations, some of which no longer apply to today�s technology.

Townley said that collaboration may only be the start if Gilbert ends up chairing the agency.

�If she is appointed I would look for the bike industry to be called in early on to work out enforcement issues, and to a high-quality standards development process at some point in the near future,� Townley said.

�Nicole Formosa

Yakima Sues Four Rack Companies

11/20/2008

BEAVERTON, OR (BRAIN)�Yakima filed lawsuits against four of its competitors last week, alleging infringement of six of Yakima�s rear hitch, trunk and roof rack patents.

Yakima Products, Inc. is suing Saris Cycling Group, Hollywood Engineering, Inc., owner of Hollywood Racks, and Car Mate USA, owner of Inno Racks, for allegedly violating four patents that cover Yakima�s trunk hitch and rear mount rack systems.

Another suit alleges Rocky Mounts violated Yakima�s patent for its roof mount rack system and for the clamping mechanism on the roof bike tray.

Neil Nusbaum, owner of Hollywood Engineering, Inc. was surprised to hear of the lawsuit on Thursday morning, having not yet been served with civil papers.

�The only thing I�d say is if in fact I am served, it�s unfortunate that things can�t be settled out of court�in conversations out of court,� Nusbaum said.

Bobby Noyes, owner of Rocky Mounts, declined to comment on the litigation, and representatives from the other two defendants did not return phone calls on Thursday.

According to documents filed in Oregon District Court, Yakima alleges all four companies are �making, using, offering for sale and selling, inducing others to make, use, offer for sale and sell, bicycle carriers and assemblies� that infringe patents, including the T-Rax and Guardian 2 and 3, without authorization from Yakima.

The violations have caused damages exceeding $75,000 per case, according to court documents.

Yakima is asking the judge for a decree that the defendants have infringed Yakima�s patents; a permanent injunction barring further use of the patents; and compensation and royalties for the losses in profit due to the unauthorized use of Yakima�s inventions.

None of the defendants have been involved in patent disputes with Yakima in the past�at least none that made it to the court system�however, Thule sued Yakima twice in the late 1990s for patent infringement. Yakima sued Thule in 2000 for the same reason, but dismissed the lawsuit two months after it was filed.

Neither Yakima nor its attorney responded to requests for further comment on the suit.

�Nicole Formosa

SoCal Cycling Fundraiser Tomorrow

11/20/2008

TOLUCA LAKE, CA (BRAIN)�A limited amount of tickets are available to attend the kick-off fundraiser dinner for the SoCal Interscholastic Cycling League this Saturday evening (Nov. 22) at Ca del Sole restaurant in Toluca Lake, California.

An incredible selection of cycling and non-cycling related items were up for bid at SoCalDirt.org. While online bidding closed this morning, attendees of the fundraiser will be able to put final bids on all items in person at the dinner.

This is all the non-cycling stuff you'll be able to bid on in person:

An eight-day Mexican Riviera cruise, S.A.T. test prep course for your High School student, a Fender Telecaster guitar, golfing packages, ski goggles, Bruins and Trojans basketball tickets and resort lodging.

Unbelievable bike stuff is also available including complete bikes from Specialized, Turner, Trek and a Fuji Limited Edition Obey Fixie. Accessories include glasses and goggles from Smith, a Go-Pro Helmet Camera, Crankbrothers wheels and pedals, a Nimbus water filtration system and entry into all three 12-Hours of SoCal events in Temecula.

Cycling celebrities Gary Fisher (pictured) and Tony Cruz will be honorary participants at the dinner this Saturday night. Click on link to buy your dinner tickets to this historic event that will bring the sport of cycling to thousands of kids in the southland of California.

Extremely limited seating is still available for purchase at SoCalDirt.org (click on link) for $125 a seat, or $1,500 a table (10 seats + VIP perks.) Go to the Web site to purchase your tickets before the event sells out.

For more information on the Cycle Fest 2008 Benefit Dinner and Auction, contact Elizabeth at Elizabeth@SoCalDirt.org.

(PHOTO by Jason Norman)

Former Shimano Employee to Rebuild

11/20/2008

ANAHEIM HILLS, CA (BRAIN)�Brian Stanley is a lucky man, and he knows it.

Shimano's former public relations manager who worked at the company for the better part of the 1990s lost his house last weekend to the fires that have recently ravaged various parts of Southern California.

"My family is all right," said Stanley, knowing that he could have lost much more than just his house. "That's all I cared about. It just really puts things into perspective."

The largest of the three wildfires and the one that destroyed Stanley's home, the Freeway Complex Fire (pictured), was 75 percent contained as of mid-week, according to the Orange County Fire Department.

The fire has burned through nearly 29,000 acres in Orange, Los Angeles and Riverside counties. Most of the damage was in the Orange County suburbs of Anaheim and Yorba Linda. The fire destroyed some 155 structures and damaged 104, fire officials said. Nine firefighters suffered minor injuries. Nearly 3,700 firefighters remained on scene, battling the flames.

The fast moving fire, whipped up by 40 mile per hour winds, jumped the nearby ten lane freeway and gave Stanley's neighborhood very little time to evacuate.

As the flames moved up the hillside in the backyard, Stanley had just enough time to grab his four-year-old son Andrew, a few critical documents and his wedding ring and wedding album. His wife, Michelle, was safely out of the house that morning, unaware of the impending catastrophe.

Even though Stanley was able to quickly gather those important keepsakes, Stanley wasn't able to save any of his industry mementos, whether it be athletes' signings or books.

"Working at Shimano was one of the greatest experiences of my life," said Stanley, who also served as general manager for Mavic for two years. "I've got [Shimano] guys in Japan calling me, asking me if I'm all right."

Fortunately for the Stanleys the family does has a strong insurance company helping them out through this tramatic time.

"We're going to rebuild," Stanley said emphatically. He added that there's a silver lining to all of this. "We'll now have a house that's updated."

�Jason Norman

NSGA: Retailers Improving Performance

11/20/2008

MOUNT PROSPECT, IL (BRAIN)�Almost all specialty retailers, from small to large, improved key measures of profitability and productivity versus two years ago, according to data in the newly released NSGA Cost of Doing Business Survey.

Almost 150 specialty retailers participated in the survey, done once every two years by the National Sporting Goods Association.

The smallest specialty retailers, those with sales of less than $500,000, improved net profit before taxes to total revenue to 4.9 percent versus 0.5 percent two years ago. Shops with sales of $500,000 to $1 million also improved net profit before taxes to total revenue to 4.9 percent from 2.3 percent two years ago. Shops with sales of $1 million to $2 million failed to match the results of two years ago, showing net profit before taxes to total revenue of 5.1 percent versus 5.5 percent two years ago. The largest specialty retailers, those with sales of more than $2 million, improved net profit before taxes to total revenue to 4.2 percent versus 3.6 percent two years ago.

In other key measures of profitability�net profit before taxes to total assets, net profit before taxes to net worth, owners compensation and profits to revenue and EBIT to revenue�almost all specialty retailers showed strong gains from two years. The most dramatic increase was for shops with sales of less than $500,000, whose net profit before taxes to net worth went from a negative 0.1 percent two years ago to a positive 14.5 percent in the current study.

NSGA's survey is done by the same research firm that conducts the NBDA's Cost of Doing Business Survey, which was published this summer. According to industry consultant Jay Townley, the highlights for both surveys are similar in many ways.

NBDA's survey revealed that the annual gross revenue for the typical bike shop in the U.S. increased more than 18 percent from 2005 to 2007, from $549,000 to $649,526 per store.

Also, net profit before taxes increased substaintially from 2005 to 2007, from 1.9 percent of gross revenue to 3.8 percent of gross revenue�an increase of 136 percent, or $14,186 in two years. From 2005 to 2007 the typical store had a pre-tax profit that increased from $10,431 to $24,617.

Moreover, typical total operating expenses for the typical bike shop dropped to 38.6 percent of total annual revenue in 2007, from 43.3 percent in 2005.

"This is a very good thing, and means bike shops are running more efficient operations, reducing their costs of doing business by almost five points in two years," Townley said.

Sporting good retailers and bike shops specifically did well for themselves from 2004-2007, increasing their gross revenue and profitablity as their costs (as a percent of revenue) came down.

"Their balance sheets and cash flow are in good shape, and as a result, sporting goods retailers, including bike shops are in a very good position financially to ride out the current economic downturn, with the possibility of gaining market share�and at the least should be ready and able to grow when the economy begins to turn up again, Townely said.

�Jason Norman

Bikes Belong Elects New Officers

11/19/2008

BOULDER, CO (BRAIN)�Three U.S. bike industry leaders were elected as Bikes Belong Coalition board officers at the organization�s meeting Tuesday in Boulder, Colorado.

Steve Meineke, president of Raleigh America, was picked to become president after serving three years as vice president. Former treasurer Chris Fortune, chief executive officer of Saris Cycling Group, was named vice president. Michael Mercuri, vice president of SRAM Corporation, was elected treasurer. All three began service immediately as a scheduled transition.

Kozo Shimano, outgoing board president, opened the meeting by reflecting on his three-year term.

�I was basically saying we�ve experienced a really strong three years. We�ve had a lot of major companies join and rejoin, and also made the deal with Interbike during that time,� said Shimano. �I like to leave an organization in better condition than I received it. I think I�ve done that with Shimano and with Bikes Belong.�

Shimano said his only apprehension about Bikes Belong are the economic uncertainties, but he said he feels the organization is positioned strongly with a budget that has doubled over the past three years.

Shimano will no longer represent Shimano American on the board, but will retain a board seat to offer �organizational memory,� said Tim Blumenthal, Bikes Belong�s executive director.

The new slate of officers is poised to guide Bikes Belong�s board until the end of 2010. The coming year will be critical as Bikes Belong works to maximize federal funding for bicycling in the next transportation bill, due for approval in September.

�Our No. 1 priority is the reauthorization of the transportation bill. That has moved way up to the front of the agenda,� said Meineke. �The four of us�myself, Chris, Mike and Tim�will be focused on that one item more than anything. Tim will be spending his time deploying people, resources and getting support from non-industry players that are part of the bike movement.�

Meineke, who has served on the board since May 2004, said he has seen a shift among board members toward a more activist role in policy issues.

�It was really interesting how outspoken everyone was, and everyone concurred this transportation bill authorization is a really critical link to take it to the next level,� Meineke said. �We�re at a very important time to raise the bar in the next year to 18 months.�

Accell Group Predicts Jump in Profit

11/19/2008

HEERENVEEN, the Netherlands (BRAIN)�Accell Group raised its projected 2008 profit from an expected 10-percent increase over 2007 to a 15 percent jump based on the company�s performance so far this year.

Sales of high-end bikes and electric bikes showed sound development in the third quarter of 2008, according to a press release issued Wednesday by Accell Group.

�Cycling remains popular in economically adverse times, partly due to the increasing attention for health and mobility,� said Ren� Takens, chief executive officer of Accell Group. �Last summer�s increase in fuel prices caused a lot of consumers to think about alternative means of transportation. This led to a more frequent use of the bicycle. In addition, we are benefiting from an aging population in Western Europe, which is an important target group for sales of, among others, electrical bicycles.�

Takens continued: �Both governments and consumers show increasing interest in sustainability and CO2 reduction. The bicycle provides a seamless match for this. The new collections we presented in September were well received by the dealers and the order intake for the 2008-2009 bicycle season is currently at a higher level than last year.�

Accell Group owns a host of brands including Batavus, Bremshey, Ghost, Hai, Lapierre, Mercier, Redline and Sparta that sell particularly well in the Netherlands and Germany.

The company�s solid 2008 results allow it to continue to invest in innovation and design, both in new models and in parts and accessories, the release said. The brand and marketing strategy of Accell Group will remain focused on supplying high-quality bicycles and fitness products that appeal to the consumer.

Trek Introducing Belt Drive in January

11/19/2008

WATERLOO, WI (BRAIN)�Trek Bicycle is introducing two new single speed urban bikes in January that will feature carbon composite belt drives instead of chains.

"We took a hard look at our urban line," said Eric Bjorling, Trek's lifestyle brand manager. "These bikes provide a lower barrier to entry with simple, low maintenance."

The 2009 Soho will retail for $990, while the District (pictured) will retail for $930.

Not only will these bikes be lighter without the chain, but the belts make them "incredibly quiet" while being durable, with the belts lasting the "lifetime of three chains," according to Bjorling. The belts are made by Gates Corporation, which makes belts for the automobile and motorcycle industries.

Spot Brand and Co-Motion also make bikes with belt drives.

These bikes were originally shown at TrekWorld and Eurobike.

"We took [retailer] surveys as to what the potential of these could be," Bjorling said. "Lots of dealers had interest around it."

�Jason Norman

Dahon Books Record '09 Pre-season Orders

11/19/2008

DUARTE, CA (BRAIN)�Dahon continues to experience robust sales and is on track to produce half a million bicycles in 2008, a nearly 30 percent increase from the previous year.

Pre-orders for 2009 are also strong and Dahon expects to continue its healthy growth rate.

�We are fortunate to be in an industry that offers consumers an environmentally sound product that people are finding ever more relevant in economically trying times,� said David Hon, president and chief executive officer of Dahon. �It�s not just Dahon that is doing well however; other bicycle companies that are focused on higher-grade products are also doing well and that�s a very encouraging sign. We are seeing increasing numbers of consumers turn to bicycles for transportation and they are demanding better and higher quality products.�

Dahon�s sales were good in traditionally strong markets like Europe and the U.S. but saw especially strong growth in Asia where governments have stepped up efforts to increase bicycling infrastructure. Dahon has also experienced a significant increase in the average price/bike as customers choose higher quality bicycles.

�Our 2009 pre-season orders are very strong and in fact we�ve already filled our current production capacity,� Hon said. �The tight credit markets and large currency fluctuations are a concern though and we need to monitor these carefully. But on the whole, we continue to experience strong consumer demand. We�re very positive as we head into 2009 and are encouraged by the number of people looking to bicycles as a transportation solution.�

SmartEtailing Adds Holiday Wish List

11/19/2008

BOULDER, CO (BRAIN)�SmartEtailing has just introduced a fully integrated consumer Wish List feature for all SmartEtailing clients' Web site catalogs.

Consumers browsing the Web sites can use this easy and fun tool to create their own Wish Lists of items they want; they can save, organize and print the Wish List to give to family and friends, while also having the ability to e-mail it.

This upgrade is provided at no additional cost for all SmartEtailing clients with catalog-enabled Web sites.