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Bicycle World Grows to Three Stores

Published July 15, 2011

HOUSTON, TX (BRAIN)—Bicycle World of Houston has expanded with a third store focused solely on triathlon products including swimsuits and goggles, running shoes and apparel as well as tri bikes and accessories.

The 1,200-square-foot triathlon pro shop, which carries brands like 2XU, Zoot, Speedo, Profile Design along tri bikes from Cervélo and Felt, is next door to one of its existing locations.

“By and large 95 percent of the product in the store is primarily focused on triathletes,” said owner Chris Holmes. “Our goal is to show our customer base in the Houston market that we’re the go-to shop for triathlon, that we really own the market.

“It’s a growing segment. We have committed so much to it—time, energy, events, activities and product mix that we’ve been able to capitalize on it,” he added.

Holmes said Bicycle World began developing the tri market in Houston six years ago, putting on events and activities for triathletes and starting a tri club that has well over 100 members and keeps growing. At its main location in the other side of town, tri products take up about 30 percent of the 12,000-square-foot shop.

Holmes said unlike his other two locations that he leases, he was able to work out a deal with the bank to own the building for the third store. “Rent would have been twice what the mortgage is with today’s low interest rates,” he said. “The rents in this area are pretty high, but as the bank put it, they look for owner-operated real estate loans.”

A nail salon for 15 years, Holmes spent $30,000 to revamp the inside. He bought new fixtures and re-merchandised it. The space is divided into two sections—with storage and a dressing room in the back and a show floor upfront. The new store opened its doors for business July 2.

Two weeks in, Holmes said business so far couldn’t be better.

“Sales have been real brisk and traffic flow phenomenal,” Holmes said. “We’ve been selling no less than at least one tri bike a day, which is pretty cool because the average value is a couple grand. Our sales are representative of us making a move. People are coming in just to see it.”

The biggest challenge, he said, is the Internet. Tri customers typically have the money to spend on the latest bikes and parts. But they also spend a lot of time on the computer, so it’s easy for them to shop online, especially when they can’t find what they’re looking for at their local retailer. “We have to compel them to not push the buy now button,” Holmes said. “With the store, having the product in stock so they don’t have to order it is key.”

But a major plus with tri is the accessory sales. New customers add on average 10 to 15 SKUs when they purchase a bike, Holmes said. And many of these products offer much higher margins than those afforded by a complete bike sale.

Holmes has worked to build a tri community to support his business. He puts on nine kids’ triathlon races, seven adult triathlons and duathlons, and hosts weekly workouts with customers.

The first Bicycle World of Houston store opened in March 2005, followed by a second in June 2006. Holmes said he’s seen healthy double-digit growth each year over the last three years.

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