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Shops End Year on High Note

Published February 28, 2011

By Megan Tompkins

BOULDER, CO—Jeff Bailey has seen sales decline yearly since 2006. So when he closed the year up, on the heels of a whopping 33 percent jump in December, he was ecstatic.

“The whole last quarter was up 15 percent over the previous year,” said Bailey, owner of Bikesport in Houston. Bailey said October sales were up 8 percent; November sales were up 7 percent.

Bailey attributed the increase to bike sales, which were up 77 percent in dollars for the three-month period.

For the year, his sales were up 8 percent in dollars. Unit bike sales rose only slightly, but his average bike sale increased by around $100. He said the majority of bikes sold were road bikes, historically purchased in late fall when customers register for the local MS 150 ride, the largest ride of its kind in the country.

That trend toward higher average ticket prices played out among retailers participating in the Leisure Trends Group RetailTRAK sponsored by the BPSA. According to Leisure Trends, December retail sales totaled $189 million, up 5 percent over December 2009. The increase was driven by a 12 percent jump in average retail-selling prices, which offset a 7 percent drop in unit sales.

Leisure Trends reported sell ing prices were up 10 percent for the year as a whole, keeping total 2010 dollar sales of cycling merchandise 7 percent ahead of 2009 in spite of a 2 percent unit decline. Total merchandise sales brought in $3 billion at retail in 2010.

According to Leisure Trends, at the end of the year, independent bicycle dealers were sitting on approximately 875,000 total bicycle units or 8 percent less than end-year 2009. All major bicycle categories contributed to the lower inventory levels except for road bikes and transit/fitness. Road bike inventory stood at approximately 204,000 at the end of December, a 15 percent increase over the same period last year while transit/fitness inventory was flat at 215,000 units.

Bailey said he benefited in the fall from good selection on his floor and at suppliers. But he said having sold through many popular road and commuter models at year-end, he is now experiencing availability issues that he expects to continue through spring.

“That’s been the biggest issue. We do Trek and Cannondale primarily. They have so many models and they don’t have them all in stock,” he said, citing a busy Saturday in February on which his staff was constantly checking model availability. “We spent a lot of time checking. We have to chase things down. Some things they have in great supply, others they don’t have at all,” he added.

He said his staff and his customers will have to be more flexible as a result. “I think we’ll have enough bikes to get through OK, but they may not be the exact bikes people are looking for. It is tough because they make so many models, they can’t have them in stock all the time in all the sizes and variations,” said Bailey, who added that consumers expect a bike to be available if they see it on a supplier website. “With the Internet, if they see it, they assume they can get it at a dealer,” he said.

Beth Annon-Lovering, owner of B&L Bike Shop in Davis, California, also noted delayed shipments of bikes from some vendors, including Electra, KHS and Jamis. Annon-Lovering said she can wait until spring for cruisers, but she may be missing sales of entry-level road bikes.

Annon-Lovering said her December sales were pretty strong thanks in large part to sales of kids bikes. And though she bucked the Leisure Trends data by growing through unit sales, not higher average selling price, she too beat 2009 sales for the full year. “We do cater more toward low-end. It’s units that keep the doors open,” she said.

For the month of December, Cycle Loft in Boston was up about 12 percent over the same month in 2009. Owner Jeff Palter attributed growth to a strong indoor training scene.

“The whole winter is bolstered by our indoor training program,” Palter said, adding that he sold twice as many trainers as the norm for the month.

December only accounts for 5 to 6 percent of Cycle Loft’s annual sales, but Palter was still grateful for an uptick for the month. “It’s a loser any way you cut it. But it’s still a couple hundred thousand dollars that’s necessary in the grand scheme of things,” said Palter.

According to Leisure Trends, December holiday sales of bicycles were driven by the continued strength of road bikes (up 17 percent) and helped by mountain bikes (up 10 percent) and Transit/Fitness (up 9 percent).

Leisure Trends found apparel sales declined this holiday season, down 3 percent and 1 percent in units and dollars, respectively, to bring in $12.4 million for the period. Apparel accessories had a mixed month, down 4 percent in units but up 1 percent in dollars on a strong 6 percent bump to average retail-selling price.

Cycle Loft finished the year up 4 percent in topline sales compared to 2009, but it still hasn’t hit previous benchmarks. “2007 and 2008 were the best years of my tenure, as well as historically,” said Palter, who bought the 34-year-old single-store business in 2006.

Palter saw high-end road rebound somewhat last year, as customers who had held off on new bike purchases gave in and plopped down cash at his store.

“At least half dozen known customers who put off a purchase in ’09 made a purchase in ’10,” said Palter.

Palter said he’s a bit of a pessimist as he looks ahead to sales this year. The Northeast was pummeled by winter storms this season, and he fears he may lose some sales as a result.

“It’s been a great ski season, with one storm after another. Ski purchases may take them away from bike,” he said.

On the other hand, he said, some customers may have cabin fever come spring.

“Some people are saying it’s going to be an explosive spring because winter’s been so bad. I don’t know that those sentiments are based on anything but pure optimism,” said Palter. “But if it’s as good as it was last year then we’ll be fine.”

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