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The Path Adjusts to a Changing Market

Published November 11, 2008

TUSTIN, CA (BRAIN)—As he approaches 2009, The Path owner Tani Walling is resuming an offensive position after spending this year on the defense due to soft sales at the high-end and the aftermath from devastating wildfires that closed local trails in late 2007.

For the first 8-and-a-half years Walling owned The Path, he took the “build it and they will come” mentality, expanding whenever he could. Even though he posted double digit sales growth every year, he was operating on a shoestring, but the business model worked.

Then in late 2007, sales of high-end mountain bikes, for which the shop is known, slowed.

“Things got really awkward. Then the fires hit and things got really bad. We lost a lot of sales,” said Walling, who spoke with BRAIN editors during the first stop on the second day of the magazine’s Orange County Dealer Tour.

With miles of local trails closed and poor air quality due to the fires, the shop was ringing up $200 days when it was used to $6,000 days, Walling said.

To adjust, Walling cut his costs by foregoing new hires or technology upgrades and changed his product mix to include more transportation-oriented bikes, fixed-gear and singlespeed urban brands and sub-$1,000 road bikes. The Path carries Specialized, Kona and Bianchi as well as smaller niche brands like Yeti and Surly.
The shop survived the rough patch, but it wasn’t easy.

“There were plenty of times throughout the last 12 months where it really was for survival. We’re not used to that,” Walling said.

Things are looking brighter this year. So far in 2008, sales are up 4 percent and service is up 20 percent and Walling anticipates sales of apparel and accessories will continue to be strong next year.

In 2009, he plans to shift to an offensive position hiring more staff and placing larger orders, as well as work to retain his enthusiast customer and make the shop inviting to beginners.

“We think that fact that sales are up even in this market is evidence that our customer base is growing,” Walling said.

—Nicole Formosa

Photo: The Path's Tani Walling talks to BRAIN editors and his managers about the state of business.

Topics associated with this article: Events

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