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Will the 'mini Bike Boom' last?

Published April 10, 2020
Specialized founder Mike Sinyard: "I think it will stick."

NEW ORLEANS (BRAIN) — From Louisiana to Long Island, Portland to Orlando, many retailers are reporting stellar bike sales and service during the COVID-19 pandemic.

"We're basically just trying to build bikes fast enough to keep them on the floor," said Adam Watts, owner of Bicycle World of Louisiana in New Orleans.

Watts opened the store in 1996 and he's never seen it so busy.

"March 13th is when it really dropped. We wound up having our best March ever by 50%. March was our best single month ever, by 20%. It was our best first quarter ever. So far in April, well, put it this way: yesterday was April 9th and we've already surpassed our April 2019 numbers."

Watts' service department is backed up for weeks; he's selling scores of comfort bikes and entry-level mountain bikes. Sales of more upscale bikes are rare.

The Bicycle World of Louisiana showroom in early March."I don't believe we've sold anything carbon in the last month," he said.

Trek's president, John Burke, calls it a "mini Bike Boom." While many shops are closed or operating at a greatly reduced level, it's not hard to find dealers across the country who are thriving. This week BRAIN talked to booming shops in New York and New Orleans, two of the current hot spots for COVID-19 hospitalizations and deaths. And we talked to thriving retailers in places where the virus situation is slightly less dire, like Dallas, Texas; Orlando, Florida; Boulder, Colorado; and Knoxville, Tennessee.

In all places, the retailers told us a similar story: their customers are dusting off old bikes and buying new ones for family recreation, exercise, and occasionally, transportation. While enthusiasts are still riding, few of them are finding this the right time to upgrade their bike, the store owners said.

Where the conversations varied was when we asked if they thought the mini boom would end, and what that would look like.

"We have not seen a surge in business like this in forever. It's just been insane," said Matt Mueller, operations manager for Bicycles Plus, which has four stores in the Dallas-Fort Worth area.

Bicycles Plus serves an affluent market where residents are forced to work at home during the pandemic and are looking for entertainment and exercise. Mueller said the boom will have a soft landing in his area.The Bicycle World of Louisiana showroom this week.

"The next few weeks are going to continue to be crazy, but I think we will settle into a more normal season in June, July, August," he predicted. He said Texas' oil money provides insulation from recessions and he doesn't anticipate an increase in government regulations even if the COVID-19 infection rate increases there.

"We're still a red state overall and that dictates a lot of it," he said.

But in Huntington, New York, on Long Island 40 miles northeast of Manhattan, retailer Alex Zuckerman is bracing for the current boom to end, perhaps suddenly.

"I think it's going to get bad, really bad. And I think people are going to stop shopping because they are going to be freaked out," said Zuckerman, who owns Bicycle Playground, with two locations in the area.

Zuckerman said he's been busy all year and he'd like to hire more staff.

"It's not so gangbusters that it's crazy, but it's like the season just started a month or two early. We weren't really prepared for this kind of volume in March or April, actually," he said.

Zuckerman said he's already submitted paperwork for the Small Business Administration's Paycheck Protection Program, even though his business is currently doing well.

"The real problem is how can we keep all these people riding bikes?"

"I just don't know what's going to happen in a month or two," he said.

In New Orleans, Adam Watts is also bracing for the boom to go bust.

"We know it's going to drop off at some point. We have a service-based economy here, and an oil-drilling economy. All the service workers are laid off, and when the gas prices go down they stop drilling and lay people off. When that starts to filter in, we're going to have issues. It's tough to plan for. I'd like to bring in more bikes but I don't want to be loaded up with too much inventory when things change.

"The real problem is how can we keep all these people riding bikes? Normally one thing I do is a lot of group rides, but we can't do that. I do worry that people are just going to go back to what they were doing before this."

Supplier perspective

Suppliers are better positioned to see the national (and global) trends, and even there, the reports are mixed. 

Some suppliers of "bread-and-butter" bikes and kids bikes are having trouble keeping enough stock. That extends to the mass market.

"I am almost embarrassed to tell you how good our business is during this horrible pandemic," said Arnold Kamler, CEO of Kent International, which sells to Walmart.

"All of our major customers are up about 50% for the month of March and this trend will continue for April until the shelves start to get empty," Kamler said.

Midway Bicycle Supply, a Minnesota distributor that serves small shops, including community nonprofit shops, had its best March ever, Benita Warns, Midway's co-owner, told BRAIN.

E-commerce sales through SmartEtailing dealer websites were up 265% in dollars in March.

"There is a strong demand for bicycles from low-income people who want to avoid using public transportation, so lots of mobile (shops) and shops that sell used stuff are ordering from us. I predict that when restrictions are lifted that there will be a huge demand for affordable used bicycles," she said.

Many shops are taking advantage of direct-to-consumer fulfillment programs being offered by some suppliers. SmartEtailing, which builds e-commerce sites for bike shops, reported that sales through its clients' sites were up 265% in dollars in March.

In a LinkedIn post, SmartEtailing president Ryan Atkinson said that many days in late March SmartEtailing's bike shop websites notched higher sales than on Black Friday.

"Our current assumption is that when the peak of the epidemic passes there will be a 'new normal' established for North American bike retail," Atkinson wrote. "It will likely involve prolonged social distancing requirements, a heavy emphasis on e-commerce, and continued growth in cycling as an activity."

Some high-end sales continue online and in brick-and-mortar stores. Santa Cruz, for example, is still assembling bikes at its California factory to fulfill dealer orders, said Joe Graney, the brand's CEO. When the San Francisco Bay Area first declared a stay-at-home order in March, Santa Cruz shut down its facility, he said. But when regional officials decided to allow the bike industry to operate, they re-opened, with strict sanitary practices.

"People needed bikes," Graney said. "Shops can't survive selling tubes and fixing flats. So we're not (doing) great, but it's not like everything's stopped, either," he said. He said Santa Cruz dealers are bringing in the bikes they pre-ordered, including some back-ordered models. But Graney is pessimistic about re-orders and on how the upcoming economic climate will affect high-end bike sales. 

"It will be interesting to see. There are plenty of people who want their toys now, but when you get to 20% unemployment, it's going to be hard to get people to part with five grand," he said. 

An estimated 20-30% of U.S. bike shops are closed altogether, either voluntarily or to comply with local orders. Some major retail chains that sell bikes, like REI and Dick's, have closed their brick-and-mortar operations. Retailers in tourist spots like Moab have closed as those areas are discouraging visits.

Industry-wide, the retail hot spots can't make up for the store closures, partial closures, and a slow down in high-end sales, as evidenced by layoffs or furloughs at several major suppliers, including QBP, HLC, Giant, Fox Head, Enve and more.

But in an interview this week, Trek's John Burke was optimistic about the future of bicycle sales, noting that the bike checks a lot of boxes. "You tell me someone else who has a product that can help with social distancing, can help with the health crisis and is good for the environment. That's a really good space to be in," Burke said. 

In a conversation Friday, Mike Sinyard, the CEO of Specialized, said he's also optimistic that bike sales will remain strong after the worst of the pandemic is over.

"Sometimes after a major event, like a recession, people chose to stay close to home and do things like ride bikes. Even after 9-11 we did pretty good business," Sinyard said.

"I think with this situation, peoples' habits are changing. People won't be traveling so much. They become more interested in some basic values ... they are not as interested in going to gyms, or yoga classes, or large spin classes, and they are going to be avoiding mass transit. When people change habits to a new way of living, they tend to stay with it," he said.

"I think it will stick."

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