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Redundancy: The cycling industry and me…


16/10/23

 

Scrabble tiles spelling out the word redundant, with a hand pointing to the letter A














What's happening ?


So the news is out, the company I was employed at is being liquidated. A London based cycling retailer that’s severed the cycling community for nearly two decades has sadly had to close the curtains on the world of cycling. This has resulted in not only mine, but 17 other people facing redundancy. A sign of the times as most of the world experiences a cost of living crisis, exacerbated here in the UK by a poorly run government trying to make the best of a Brexit that is both unworkable and utterly counterintuitive. But the cycling industry, as whole, is really feeling the after affects of the pandemic… still.


The cycling industry, what went wrong?


Poor judgment by manufactures, all too keen to lap up the sudden surge of people wanting to be allowed outdoors on a bicycle. Who can blame them? It's business, but the after effects ripple out and away from us like a stone thrown into a pond, the ripples bounce off the walls and flow back to their origin and this is where it becomes tricky.

Manufacturing brands believed that the market would immediately return to pre pandemic levels, foolishly. Only unsurprisingly the market wasn’t there when we were all allowed out of the house again and just round the corner was the scary inflation monster thumping its way into town growing ever more larger and sucking up everyones disposable income. So big brands who were struggling to produce through the pandemic, and navigate the supply chain issues, massively over compensated and are now stuck with excess products.

But I… we, at our London based bike shop are not the only casualties in this episode of catastrophic fall out. This year alone has seen big brands turning off the lights. More large, distributers of Forme, lake shoes and Tern eCargo bikes closed their doors, All-City Cycles, a beautiful bike building brand, gone! Famously, Vanmoof the Dutch eBike brand collapsed. In my conversations with brand reps and other industry folk, rumours have it the Specialized are currently on the brink, Balfes bikes, another London retailer has sought funding from Trek cycles after they had a near miss on loan repayments, and probably most surprisingly, GCN, owned by Play sports Network, which itself is part of the Warner Bros and Discovery portfolio, over the last two years has lost £18 million and is currently up for sale.

But what’s more, If you look carefully there are telltale signs everywhere that things are not right. Rapha has had a sale on nearly the entirety of 2023! And they’ve began selling through Evans cycles and Sigma Sports, talk about brand dilution. And this comes after a refinancing operation they underwent in February 23 to write off debt. Shimano has current annual drop projections to as much as 28%, and It’s reported that one of Srams factories in Taiwan is laying off workers.


How does it get fixed?


So where does that leave us in this scorched earth scenario? Admittedly it looks very bleak at the moment. Ash is still falling from the sky and there are a few flames licking around the burnt stumpy remains of trees, but there are a few green shoots poking out of the ash laden ground to give the industry some hope. Certainly at a grass roots level, small independent bikes shops, especially ones that focus more so on mechanics and fixing peoples bikes to a high standard, have a small bespoke range of products, importantly coffee and a focus on the local community are weathering the storm, if not thriving. One such example of this is LC Cycleworx on the Holloway Road in north London who opened up earlier this year. A small family unit, set up in affordable premises doing great work for the cycling and further local community.

Marin bikes, a somewhat larger manufacturer reports that they are doing ok. Working closely with bricks and mortar companies, ensuring a great and affordable products, and importantly Marin did not really over order on manufacturing stock. Boutique bike shops are also seemingly doing well, offering high ticket items to targeted high net worth individuals, because what cost of living crisis...?

The market trends show that eMTB especially is outperforming literally everything else right now, even showing a positive projection in 23/24 against the current market trend. gravel bikes and traditional mountain bikes are also market leaders. Worldwide, government initiatives and policies promoting sustainable transportation and reducing carbon emissions have played a significant role in driving the demand for bikes. The global cycle market size was estimated at USD 64.62 billion in 2022 and is expected to reach USD 135.02 billion in 2030 so the future, albeit a bit further away than we in the industry might like, is looking a lot brighter.


So where does that leave me, your narrator, right now?

Well, it seems that working in the cycle industry right now isn’t a good place to be as an employee, getting past that 2 year mark where a redundancy package actually exists in employment law potentially looks unachievable. As much as one doesn’t want to leave this great place, full of wonderful and likeminded people, the possibly sensible option would be to look to another industry for “employment” and to continue ones love for cycling as, well... a cyclist for now. But it's in my nature to do more than that, I want to contribute back into this amazing and brilliant place that has accepted me, and me of it. What that looks like right now I don’t know, but I do know it’s going to be a good ride.




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