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Depressing thought...

canadmos

Cake Tease
May 29, 2011
11,300
7,518
Canaderp
This will definitely be a Time of Transition. We the People must Trust the Message of our industry lizards - afterall, they are the ones with the Specialized skills to lead us through this Trek up the Canyon of ill. We have a Giant road Ahead, but if everyone chills out and has an Orange or some Salsa, itll all work out. I Hope.
 

dump

Turbo Monkey
Oct 12, 2001
5,777
585
But I bet more than a few bike manufacturers will go under this year.
No doubt.

The numbers of human deaths is most concerning at the moment. What we're seeing in places like Italy is extremely concerning – not to mention those countries not equipped to test and therefore reporting zero cases.
 

SylentK

Turbo Monkey
Feb 25, 2004
1,267
222
coloRADo
My wife, who is a nurse, can't even get the proper PPE (Personal Protective Equipement...respiratory masks, gloves, safety glasses, etc.)she needs to do her job safely. And here I am wondering if I can get my shock/fork serviced before the season starts...Hmm...priority shifts anyone?
 

6thElement

Schrodinger's Immigrant
Jul 29, 2008
6,117
3,476
My wife, who is a nurse, can't even get the proper PPE (Personal Protective Equipement...respiratory masks, gloves, safety glasses, etc.)she needs to do her job safely. And here I am wondering if I can get my shock/fork serviced before the season starts...Hmm...priority shifts anyone?
Whereabouts in the state does she work?
 
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William42

fork ways
Jul 31, 2007
3,750
398
This is going to utterly decimate the small, midsize, and also large manufacturing sectors of the bike industry.
 

William42

fork ways
Jul 31, 2007
3,750
398
That's okay has anything truly groundbreaking happened in the last 5 years or so?
I don't know, I personally like having companies I can buy things like frames, cranks, bb's, brakes, suspension, headsets, handlebars, grips, chainguides, wheels, and various other components from. A headset isn't much different now than it was in 2005, but it's still nice to have companies we can purchase them from.

If US unemployment hits 30% as many are predicting, you can bet your ass that the bike industry isn't going to somehow magically weather that storm, and it's not going to only be the small companies or the companies making shitty products that go under. Hell, if unemployment hits 15% which seems pretty low considering, you can make the same bets.
 

ianjenn

Turbo Monkey
Sep 12, 2006
2,620
377
SLO
The cycling industry as a whole is pretty wasteful. A new model every year is a joke slow that shit down and let your graphics clown you are paying $15HR to and the Art Director that's making $60K a year have some time to lock down a colourway for crying out loud. Did I mention the homes in the area cost $1.5 Million to start.......
 

jackalope

Mental acuity - 1%
Jan 9, 2004
6,269
3,064
in a single wide, cooking meth...
I'm just a simple caveman when it comes to macro-economics, but I'm wondering if there is a meaningful portion of the existing customer base that are well heeled "dentists" who will likely not face layoffs or perhaps even life altering changes in income? I can certainly see financial hardships in the offing for many workers who do not have a "DDS" on their business card, and there will also likely be a worldwide trend to spend less, but perhaps there's enough wealthy people who can minimize bike industry casualties - especially if there is more time to actually ride. FWIW, a friend at a local bike shop indicated they've been absolutely slammed (more than usual), but that may be a temporary bump before things come to a grinding halt.

I'm sure many will disagree with my decidedly optimistic comments, but I'm personally gonna try to ride my ass off over the next few months, and I even ordered $200 worth of gear last Friday. And hell, I suspect almost all of my bouncy components on my bikes need a real service rather than my typical lowers service or Triflow on the shock shaft.
 

Jm_

Turbo Monkey
Jan 14, 2002
10,818
2,952
AK
The cycling industry as a whole is pretty wasteful. A new model every year is a joke slow that shit down and let your graphics clown you are paying $15HR to and the Art Director that's making $60K a year have some time to lock down a colourway for crying out loud. Did I mention the homes in the area cost $1.5 Million to start.......
I only have to think as far as suspension, where the goal is selling a new product, rather than making something that actually works (and then refining it in the coming years).
 

dump

Turbo Monkey
Oct 12, 2001
5,777
585
I don't know, I personally like having companies I can buy things like frames, cranks, bb's, brakes, suspension, headsets, handlebars, grips, chainguides, wheels, and various other components from. A headset isn't much different now than it was in 2005, but it's still nice to have companies we can purchase them from.

If US unemployment hits 30% as many are predicting, you can bet your ass that the bike industry isn't going to somehow magically weather that storm, and it's not going to only be the small companies or the companies making shitty products that go under. Hell, if unemployment hits 15% which seems pretty low considering, you can make the same bets.
Things will contract. You may have a fewer choices in the short term, but long term, you'll still be able to get anything you can imagine. My guess is that you already have parts galore and multiple bikes. My hope is that a more sustainable version of the industry comes on the heels of this crisis... this is coming from someone who hasn't bought a new frame in a very long time... but still has stock of chains, tires and more than a few bikes.

Now imagine if Pinkbike or Bike goes under. What will the folks here do?! Might have to start a blog or something.
 

aenema

Monkey
Sep 5, 2008
281
73
I don't know about you guys, but I live in Boise, ID an the trails have been more overloaded than I have ever seen in this last week. People are going out in droves and while there are a lot more hikers, there are also a lot more people on bikes. I think, depending on where you live, some area bike shops will do well for at least the short term with an influx of people rediscovering outdoors, and maybe that will feed up to the bigger brands. Just as long as shops and factories are allowed to stay open.

I was thinking similar though with regards to companies like Canfield. They rejuvenate their business and then this hits, what terrible timing that turned out for them. The casualty list from this pandemic is going to be long in both finances and lives.
 

rideit

Bob the Builder
Aug 24, 2004
9,823
3,263
In the cleavage of the Tetons
When I owned my shop, this time of year (now through June) I was usually carrying ~$100k in debt from the manufacturers that offered credit. I would ‘break even’ around late August. I would be terrified right now.
 
Feb 21, 2020
38
72
Tons of folks riding in the Santa Cruz area and the trail conditions are near perfect!
Local shops have been open, but only allowing 2-3 people inside at a time.
However, on the news this morning the police are now going to start forcing "non essential" businesses to shut down or get cited across the whole SF Bay Area.


Once martial law goes into effect I am crawling into the bunker with my 10,000 rolls of shitter paper, see you in 2021.
 

Westy

the teste
Nov 22, 2002
38,986
5,696
Sleazattle
All the gripes people have over the bike industry make it seem like there is this great conspiracy to fuck over cyclists. They do nothing different than any other consumer industry. If they make bikes people don't like, they don't get sold. Don't bitch about the industry bitch about the people that buy new bikes.
 

Jm_

Turbo Monkey
Jan 14, 2002
10,818
2,952
AK
All the gripes people have over the bike industry make it seem like there is this great conspiracy to fuck over cyclists. They do nothing different than any other consumer industry. If they make bikes people don't like, they don't get sold. Don't bitch about the industry bitch about the people that buy new bikes.
Exactly, you will have awesome choices of Trek, Specialized, Rockshox and Fox. And by "choices", I mean what they tell you that you are supposed to be riding.
 

Lelandjt

Turbo Monkey
Apr 4, 2008
1,824
204
Breckenridge, CO/Lahaina,HI
No doubt.

The numbers of human deaths is most concerning at the moment. What we're seeing in places like Italy is extremely concerning – not to mention those countries not equipped to test and therefore reporting zero cases.
Yesterday NPR said the average age of Covid deaths in Italy is 81. Probably not many MTBers being culled from the herd there.
 

marshalolson

Turbo Monkey
May 25, 2006
1,545
250
If US unemployment hits 30% as many are predicting, you can bet your ass that the bike industry isn't going to somehow magically weather that storm, and it's not going to only be the small companies or the companies making shitty products that go under. Hell, if unemployment hits 15% which seems pretty low considering, you can make the same bets.
This is only part of it. Here is a first draft of something I am working on that might be interesting for some.

BRAND IMPACT
large scale Supply chain disruption will take a long time to really uncover the impacts
Sample sets not produced like normal.
Sell-in 2021 and go-to-market events (shows, sea-otter, world cup, etc) cancelled.
Stores asking every brand to maximize dating or simply won't pay / go bankrupt creates cashflow risk
Stores cancelling/refusing/reducing preseason delivery creates inventory risk
Pre-baked marketing narratives are woefully out of touch with current market conditions.

BRAND IMPLICATION
Broken go-to-market cycle for 2020
Entirely new market conditions to sell-in 2021
Receiving product 2020 too late and lower demand for it
Cashflow on risk to be crushed by late/non payment
Tons of inventory and no real outlet (many .com's are on spending freeze)
Expect to see a ton of closeouts for sale on brand .com property

----

SHOP IMPACT
Aged inventory is depreciating much more quickly than normal
Cancelation of preseasons to minimize assuming new debt means less pull product to draw expert cyclists in
High fixed costs already (rent, wages) to a barely break-even business

SHOP IMPLICATION
Constraints in getting low-cost debt due to liabilities on balance sheet (mainly accounts payable and rent)
Increased demand for service on low end/basic/starter bikes (ie time intensive but low average order value)
Decreased demand from expert cyclists who now have more time to fix their gear @ home (less best margin customer)
Hourly store employees will be/being laid off.

----

CONSUMER IMPACT
Consumers will start flooding the market cleaning out their garage with used product (PB, Ebay, MTBR)
Strong culture shift of buying necessity vs. interest
Lack of strong "pull" products currently on the market that are MUST HAVES for expert-level cyclists
Lack of cohesive marketing rollouts and in-season lightning rod events (ie world cups)

CONSUMER IMPLICATION
Increase in availability of closeout product is forecast
Increase in participation of peer-to-peer selling
Decrease is "reason to buy" marketing exposure
Increase in "run what you brung" culturally

----

RECOMMENDATIONS

Brand
(1) need to urgently create a next-gen go-to-market on the fly
(2) access as large of a line of credit as possible to float your retailers
(3) make sure your stores get premium and halo products in --- and figure out how to drive consumer demand for them
(4) refrain at all costs from closeouts, and if you have to, own in on your site vs. instead of .com closeouts

Store
(1) call your best customers and ask/beg them to buy gift cards. It a 0% interest rate liability, but its also pure cashflow in the cash register today, and helps consumers come back to you vs. online closeouts later.
(2) get any remaining previous-year demo product (like all of it) listed on ebay, geartrade, craigslist, TGR, Mtbr, etc as fast as possible. Its paid for already, you covered your cost, the inventory will rapidly depreciate, and its important to have pull for latest and greatest.
(3) focus messaging to all of your customers on service first... more people are outside now than ever. They need nutrition, foot ware, sunglasses, tune ups, etc etc. Focus on selling consumables as the leading marketing message. Its a message of hope and a message of palatable consumption.

Consumer
(1) get outdoors
(2) don't panic
(3) buy what you need, when you need
(4) choose to invest into the things that really matter to you (like your local specialty retailer)

----

TAKEAWAY
It is time for stores and brands to get on the front foot.
Every day that passes which is reactionary increases your risk.
 
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Electric_City

The orangutans are loose!
Apr 14, 2007
1,605
428
The Industry™

In the end, the big 3-5 will survive and determine that it's only worth selling $8,000-15,000 bikes and drop the "cheap stuff"...