Good article. There is an oddity that companies doing "luxury" often survive a downturn. Don't know if it's to do with the richer getting richer and the poorer getting poorer, but it is how it is. Concerns anything from handbags, cars, to booze.
State of the industry: a running thread
- Thread starter al-onestare
- Start date
- Status
Good article. There is an oddity that companies doing "luxury" often survive a downturn. Don't know if it's to do with the richer getting richer and the poorer getting poorer, but it is how it is. Concerns anything from handbags, cars, to booze.
N-plus-one
Old School Hero
Some people remain relatively immune from downturns, or it may even be a buying opportunity. For example, the aristocracy haven't retained their positions of wealth and power for sometimes hundreds of years during famine, war, disease etc without knowing how to weather the old spell of bad weather. They never stop buying luxury goods if they need them.
Before we start sharpening the pitchforks, don't forget that in periods of economic downturn, it's proven that as belts tighten, higher priced goods and luxuries are still bought, just not as frequently as they are more likely to be bought through savings (long or short-term). The classic example is chocolate, where sales remain flat and sometimes even rise during recessions.
Bikes, chocolate, not exactly the same thing for sure. Aiming to, or looking forward to making that big, special purchase is still a thing.
Bikes, chocolate, not exactly the same thing for sure. Aiming to, or looking forward to making that big, special purchase is still a thing.
Guinessisgoodforyou
rBotM Winner
As evidenced by all of us
Rod_Saetan
Old School Grand Master
- Feedback
- View
This is from Cycling Industry News print edition, last quarter and a section called 'ask the boss' with Fraser group's (Evans) Russell Merry who has been in the industry a long time:
"...Number two is that we are creating a very powerful website. The Evans Cycles website will be more comprehensive than, I think, any website that has ever been in the bicycle industry, anywhere."
On challenges to the industry:
"The biggest challenge is it is unique... We've had some setback in UK government funding recently... It has some acute short-term challenges to do with over supply... Those short-term challenges are very serious, but the mdeium-term prospects for the industry remain good."
Summing up:
"We call the industry a pre-consoloditation industry. It has a very strong independent sector and it is still quite fragmented. And we do see consolidation coming. We see that as an opportunity..."
"There's some brilliant IBDs and there are some that will not last industry consolidation."
As the top dog in the UK's largest cycle retailer he probably has a pretty good idea of what is going on, and has some bearing its future too. The corporate talk of consolidation is a little chilling, but it looks like its headed that way anyway.
"...Number two is that we are creating a very powerful website. The Evans Cycles website will be more comprehensive than, I think, any website that has ever been in the bicycle industry, anywhere."
On challenges to the industry:
"The biggest challenge is it is unique... We've had some setback in UK government funding recently... It has some acute short-term challenges to do with over supply... Those short-term challenges are very serious, but the mdeium-term prospects for the industry remain good."
Summing up:
"We call the industry a pre-consoloditation industry. It has a very strong independent sector and it is still quite fragmented. And we do see consolidation coming. We see that as an opportunity..."
"There's some brilliant IBDs and there are some that will not last industry consolidation."
As the top dog in the UK's largest cycle retailer he probably has a pretty good idea of what is going on, and has some bearing its future too. The corporate talk of consolidation is a little chilling, but it looks like its headed that way anyway.
I'll gladly accept a swap of that Swan Ti for three Kit-Kats. Either today, tomorrow, or even in a couple of years from now.
Good post. From my own professional experience working in logistic and supply chain, in various sectors but not in the bike industry and dealing with sadly more downturns than upturns, I have seen several consolidations, joint ventures, etc. Pretty much always seemed to be about 5 big players, 3 would always be in the running for pole position. Ironically, the consolidation seemed to be driven more by market share, and the focus would still get lost to be a bit more leaner and meaner. Lots of smaller companies would pop-up (formed from redundant staff) and fill voids and get the foot in the door while the bigger companies had the pain of re-structuring going on. There's a part of me that would like to see many smaller nimble players, local players, than a hand-full of big boys playing clash of the titans and doing the outdated globalisation spiel to death .
Rod_Saetan
Old School Grand Master
- Feedback
- View
CSG UK are on the way out too apparently:
https://cyclingindustry.news/pon-group-to-close-csg-uk-business-unit/
More B2C by the looks of it, which is the way it has been going.
https://cyclingindustry.news/pon-group-to-close-csg-uk-business-unit/
More B2C by the looks of it, which is the way it has been going.
- Feedback
- View
yes, CSG, i just spoke to the cannondale rep, i used to work with him back in the day, i don't think he knew it was coming, or maybe had an idea as to how bad the sales were which meant changes were coming but maybe not to that extent, as in the announcement to close, but i think the industry issues are worse here because of brexit, simply the costs are that little bit higher to supply us now, hence cannondale not bringing in that new e bike to the uk.
there's gonna be more to come. i'm hearing rumours about a 4 shop chain near me. also Rotec cycles in reading have apparently closed
i currently wish i hadn't restocked some bikes as Orange have basically just undercut me, luckily i only have 7 bikes in stock and they are less expensive, as in not full suspension, i can match the prices if i choose to make no money. thinking this might be the last time i stock bikes, was having the same conversation with another shop owner in regards to him stocking Orro bikes, they have kippered him right up, they sent him bikes about 2 weeks ago even though he told them not to as the ones he had in stock had not sold, then they do massive deals which has devalued the stock they sent him a few weeks earlier, they said pay for them when you sell them but that's now not gonna happen because of the black friday discounts they are doing, but they'll chase the money from him, i told him if they are still boxed to send them back, or better have them collect them based on the fact that he told them not to send them.
there's gonna be more to come. i'm hearing rumours about a 4 shop chain near me. also Rotec cycles in reading have apparently closed
i currently wish i hadn't restocked some bikes as Orange have basically just undercut me, luckily i only have 7 bikes in stock and they are less expensive, as in not full suspension, i can match the prices if i choose to make no money. thinking this might be the last time i stock bikes, was having the same conversation with another shop owner in regards to him stocking Orro bikes, they have kippered him right up, they sent him bikes about 2 weeks ago even though he told them not to as the ones he had in stock had not sold, then they do massive deals which has devalued the stock they sent him a few weeks earlier, they said pay for them when you sell them but that's now not gonna happen because of the black friday discounts they are doing, but they'll chase the money from him, i told him if they are still boxed to send them back, or better have them collect them based on the fact that he told them not to send them.
- Status
