We are operating 8.30 am-5.30pm, Monday – Friday . Saturday 8.30- 4.30
Please Note there is Limited Access Allowed to The Shop Premises Due to the Current Covid Restrictions
We would like to update you on the impact of the global coronavirus pandemic on our bicycle inventory and the actions we have taken.
Due to Current Supply issiues / uncertainty from Suppliers We Are Currently Advising not to Process Cycle 2 Work Applications / Quotes unless the Bike is in Stock To Avoid Dissapointment ,
We Cannot Accept Responsibility for Delays on Deliveries Which Are Outside our Control
The silver lining of the Covid-19 tragedy is that there literally has been a “bike boom” for models below €1000. We target 30 days of “safety stock” in these categories to carry us through sales spikes, but with that explosive growth, the safety stock has sold through. This leaves us in a very tight inventory situation, but production has returned to full capacity and shipments are on the way for delivery in October .
Inside the Company Trying to Solve the Global Bicycle Shortage
Billion dollar bike-maker Trek was bracing for its business to implode in the pandemic — until the opposite happened. Now, it‘s racing to keep up.
Back in early March, as Europe slid into lockdown, with the United States not far behind, John Burke, the CEO of Trek Bicycle Corp., called an emergency meeting. As he generally does when facing a crisis, he told his leadership team he needed three scenarios: Best case, worst case, and likely outcome. Soon, the oversized whiteboard in Burke’s office was a scrawl of figures, bullet points, and backup plans.
The mood was calm, matter-of-fact, but even the rosiest scenarios were exceedingly grim. The best Trek could hope for, Burke was told, was that sales would fall 50% in April, 20% in May, and remain flat through the rest of the year. The worst case? An 80% plunge in April followed by a 40% drop in May, with business tumbling an additional 10% to 20% through the end of the year. For Trek, it would be the business equivalent of watching a $9,000 Top Fuel XC mountain racer soar straight off a cliff — all that would remain would be to pick up the pieces.
To Burke, this seemed unfathomable. Trek was still riding the high of a record year in 2019, with sales driven by the strong economy, growing concern about climate change, and cities becoming more bike friendly. Trek itself seemed indomitable. Founded by Burke’s father in 1976, the company was now an industry behemoth, the second-largest bike maker in the world, with sales reportedly exceeding $1 billion and some 3,000 employees — about 1,000 of them in the company’s Waterloo, Wisconsin headquarters.
Much of the credit for that growth went to Burke, a rangy, 57-year-old redhead who had developed a reputation as a demanding and decisive leader since taking the reins in 1997. Opinionated and a tad swaggering, he is the author of three books, most recently Presidential Playbook 2020: 16 Non-Partisan Solutions to Save America, which offers fixes for everything from the tax code and manufacturing policy to campaign finance and climate change.
But with virus fears mounting, and states and cities shutting down their economies in response, Burke felt he had no option but to hunker down. He sent his employees home and turned his office into a war room. Each morning, he would wake up, clear his head with a 20-mile road ride through Waterloo’s scenic, rolling farmland, then pull into his deserted, 237,000-square-foot headquarters. “The parking lot was empty; it was dark; there was nobody there,” he says. “I’ve worked here 36 years — it was bizarre.”
He’d review the day’s reports, which were almost uniformly bad. As March became April, forecasts were continually revised downward, with new financial plans drafted and budgets tightened accordingly. In his decades at Trek, Burke had experienced nothing like it. “We really believed we were heading into a huge storm,” he says.
If Burke’s gut proved wrong, if those data points turned out to be blips, the company could be left with warehouses full of unsold bikes in the middle of the worst recession in decades.
And then something unexpected happened: On April 12, the numbers took a dramatic turn. According to that day’s report, sales were ticking up — across the board, and almost everywhere. Each new report, with data from Trek’s 5,000 retailers in Europe, Asia, and the United States, brought more positive “data points,” as Burke calls them. Over the next two weeks, demand for “entry-level” bikes (the ones that go for less than $1,000) doubled. As those low-priced models began to sell out, every category of Trek bikes — from humble kids’ rides to sleek road racers to cutting-edge e-bikes — followed suit. By the end of April, Burke started thinking to himself, “We’re going to need a lot more bikes.”
But shifting gears was not an easy call to make. If those data points turned out to be blips, the company could be left with warehouses full of unsold bikes in the middle of the worst recession in decades. But Burke ultimately felt he had no choice.
“It was like there was this really big button, and it said ‘Global Bike Boom,’” Burke says. “And someone pushed it.”
“It looks like a bomb went off in the store,” says Craig Kundig, owner of Cyclery USA, a chain of three bike shops in California’s Riverside and San Bernardino counties. Most days, customers wait more than 30 minutes in the brutal summer heat to enter the shop. Inside, the few bikes Kundig has in stock are lined up in boxes on the floor. “We can’t put them together fast enough to sell,” he says. “We’ll pry open the box and say, ‘This is the color. You want it?’”
Kundig, 64, has been in the bike business his entire life — his family has owned stores for five decades — and has seen no end of booms and busts. But he’s never experienced anything like this. In the 12 weeks since March 19, when Governor Gavin Newsom issued the state’s first statewide shelter-in-place order, Cyclery USA sold more than 1,500 bikes. The number during the same period in 2019? Just 540.
U.S. bicycle sales (including indoor bikes, helmets, and other accessories) hit $1 billion in April, up 75% from the previous year — and the first time ever that sales had hit such a height.
Everyone, it seems, wants to ride. “People are bringing in 30-year-old bikes and trying to get us to repair them,” Kundig says. “We’re talking $100 bikes that need $300 of work. In the past, I would have told them to get a new bike. But we don’t have anything to show them.” Instead, the old beaters sit in racks on the shop floor that once displayed new models, waiting for attention from Cyclery USA mechanics, many of them newly hired local racers sidelined by the pandemic. “It’s unprecedented,” Kundog says. “Impossible.”The Uncertain Future of Post-Pandemic StarbucksHow did the coffee behemoth get left behind in the pandemic?marker.medium.com
The U.S. economy may be contracting at a record rate, but you’d hardly notice it at the nation’s bike stores. At the outset of pandemic, most cities deemed bicycle retailers essential businesses because of transportation concerns, and it’s clear that consumers heeded the call. According to NPD Group, a market-research firm, U.S. bicycle sales (including indoor bikes, helmets, and other accessories) hit $1 billion in April, up 75% from the previous year — and the first time ever that sales had reached such a height. Sales of bikes under $200 grew more than 200% and front-suspension mountain bikes were up 150%. Kids’ bikes spiked 107%.
There is a perfect storm of reasons why. No one wants to get on a bus or subway these days. With gyms and sports off limits, anyone looking to get a dose of cardio needs a socially distant way to get their fix. Parents, meanwhile, are eager to push their kids off their screens and out of the house. And then there’s the fact that riding a bike is just fun and nostalgic — the pandemic forcing us to rediscover ways to stay sane. “Bicycling,” Kundig says, “is the perfect sport for Covid.”
Which means that back at Trek in Wisconsin, John Burke has had one job, and one job only: To ensure that customers like Kundig, a Trek retailer for more than three decades, have merchandise to sell.
In many ways, Trek was better situated than many bike companies to respond. For one thing, Trek always makes sure it has 60 days’ worth of “safety stock” on hand. Still, chasing this demand surge would be no easy task. Relatively few new bikes were on order due to the expected sales plunge. What’s more, the factories of Trek’s suppliers throughout Asia had spent most of February idled due to Covid concerns and were still ramping up themselves. And so Burke watched as Trek’s warehouses emptied out.
“If you go to our warehouse, it’s a massive space with nothing in it. We could be selling a lot more bikes than we’re selling today.”
Complicating matters is the fact that accelerating production of bikes is a lot trickier than it is for, say, flour or baking yeast, two other products that experienced unexpected booms in the wake of the lockdown. A flour maker, for example, can simply mill more grain and rush packages to store shelves within days. Trek, by contrast, operates an insanely complex supply chain, with a single bicycle composed of parts — wheels, handlebars, shifters, brakes, grips, pedals, cables, housings, drive-trains, and more — from as many as 50 different suppliers. Those components are sent to one of four Trek assembly plants in China, Taiwan, Germany and Wisconsin, where the company’s high-end models are produced. Then, the bicycles are boxed up and shipped to company warehouses around the world, and finally on to retailers. The entire process can take as long as 120 days.
“If you go to our warehouse, it’s a massive space with nothing in it,” Burke says. “We could be selling a lot more bikes than we’re selling today. There are a lot of customers, a lot of Trek retailers — like, 97% of them — who don’t have as many bikes as they want.”
Burke grew up around bikes. His father, Richard, launched Trek in 1976, building mid-priced touring- and racing-bike frames in an old red barn in Waterloo. The company branded itself as a homegrown alternative to the fancy new models being imported from places like France and Italy. As a teen, Burke loaded boxes and logged inventory; after graduating from Boston University, he joined Trek as a sales rep. But by the mid-1980s, Richard stepped away from day-to-day duties and the company’s rapid growth had begun to stall, the result of declining quality and disgruntled retailers. The founder put his son in charge of sales and marketing. Revenue was about $16 million; a decade later, by doubling down on innovation, expanding overseas, and strengthening retailer relationships, Burke had grown it to $300 million. Richard stepped down and anointed his son CEO in 1998.
“We’d hear from a sales rep, ‘Hey, Jim in L.A. sold 48 bikes yesterday, and he’s never sold more than 20. Has anyone else heard anything like that?’”
In the years that followed, Trek earned a reputation for quality and innovation. The company sponsored the U.S. cycling team and Lance Armstrong rode Treks to seven Tour de France victories, giving the company untold exposure. (The relationship ended in 2012 amid Armstrong’s doping charges.) Trek’s best sellers are now entry-level mountain and fitness bikes, but the brand remains closely associated with elite racing — its elite Madone line of racing bikes, celebrated for their speed and responsiveness and which can cost more than $13,000, remain coveted by hardcore racers everywhere. The company accounts for an estimated 30% of the $6 billion U.S. bike market.Austin Was Destined to Replace Silicon Valley. Then the Pandemic HitCan the hottest boomtown off the coasts survive a recession—and a Covid surge?marker.medium.com
Burke himself likes to go hard. He pedals about 5,000 miles a year, has completed two Ironman competitions, and for the past 14 years has raced in L’Etape du Tour, a grueling amateur ride held each year before the mountain stage of the Tour de France.
He brings a similar intensity and discipline to his job at Trek. Obsessed with improvement, he has spent his decades designing and refining the way the company does nearly everything, constantly investing in technology to deliver real-time information about nearly all aspects of the bike-making process — from inventory and distribution to customer service and retail sales. He’s a numbers guy, obsessed with measuring everything.
The months of April, May, and June would put those systems to the ultimate test. Burke’s first move was to determine whether the initial surge in sales was more than just an anomaly. In addition to selling bikes, the company also sells a proprietary point-of-sale system to thousands of its independent dealers. This access to real-time data proved to be a huge advantage. “We’d hear from a sales rep, ‘Hey, Jim in L.A. sold 48 bikes yesterday, and he’s never sold more than 20. Has anyone else heard anything like that?’” Burke says. By digging into point-of-sale data, Trek’s forecasting group was able to quantify its reps’ reports and confidently answer in the affirmative. As a result, Burke says, “Before competitors knew what was going on at market, we knew.” More specifically, Trek knew that relatively inexpensive hybrid and mountain bikes, like the $550 Marlin 5, were flying out of stores nationwide.
From there, he and his team drilled deep into Trek’s vast supply chain, gauging the capabilities of suppliers, in most cases doubling its orders for handlebars, frames, wheels, and other components. Yutaka Taniyama, vice president of sales of bicycle components at Shimano, the Osaka, Japan-based giant that is the industry’s leading supplier of shifters, drivetrains, and other components, heard from Trek in April. It had been a punishing few months for Taniyama, with order after order being canceled from manufacturers around the world. “I would call it a storm,” he says. “A panic.” And then the Trek rep came calling.
Taniyama could not believe what he was hearing, and reached out to Burke to clarify. “John explained what he had seen and showed me the data that showed that the forecast needed to increase,” Taniyama says. So Shimano, which operates on a first-come, first-served basis with its clients, took its excess capacity and directed it to Trek. “They made a decision early,” Taniyama says. “Now, everyone else is following.”
While waiting for new bikes to arrive, Trek did what it could to keep its retailers afloat. “We deal with a lot of small businesses, and we saw the pandemic as threatening their existence,” Burke says. “What could we do to help them survive the storm?” The company developed a comprehensive guidebook of operational instructions for retailers called “How to Survive the Season,” offering signage, floor plans, traffic directions, safety precautions, and other tips for doing business at a time of social distancing. “We called it ‘the restaurant play,’” Burke says, in which customers are greeted and escorted one at a time into the store and, essentially, waited on. There were instructions on everything from how to arrange merchandise, where customers should stand, and how to wipe down bikes before and after test rides. “We used a lot of their stuff,” says Cyclery USA’s Kundig. “We had to adapt fast.”
Three months since the boom began, it’s showing no signs of slowing. “Our demand is triple our supply,” says Jim Strang, president of Spokes Etc., a five-store chain in northern Virginia, who has been in the bike business since the mid-1970s. “I’ve never experienced what we’re experiencing today.”
A Trek dealer for some 20 years who uses its point-of-sale system, Strang says the brand has been consistently reliable in fulfilling back orders. Each week, he can count on about 200 new bikes to land. “With other brands it’s been more chaotic — 400 bikes will arrive, and then nothing for weeks,” he says. “I don’t think they’re set up as well.” Still, with a two-month waiting list for sub-$1,000 models, the only items on his floor are more expensive road and electric bikes. They are selling briskly, which has boosted his average sale price considerably. Strang’s stores are selling about 2,500 bikes a month — up 60% from usual — but the number, Strang says, could easily be 5,000. If only he could get his hands on them.
“This is not a blip. People want to be outdoors. They want to exercise and they want transportation that’s not a bus, a train, or a trolley. You have this massive issue of climate change — and consumers actually wanting to do something about it.”
And he expects that this will be the new normal. The way Strang sees it, the Covid crisis is a watershed event, similar in scope to 9/11, that has fundamentally changed the way Americans think about work, health, and recreation. Even when things do return to normal (and who knows when that will be, even if a vaccine emerges?) more Americans will still work from home, remain wary of air travel and public transportation, and be more conscious of conditions like diabetes and obesity that put them at risk of contagion. “I think we’ll be in a bike boom for a couple of years,” he says.
Burke, not surprisingly, agrees. Even though bike sales are strongest in spring and early summer, he expects strong demand through the fall and into the holidays — and beyond. “This is not a blip,” he says. “People want to be outdoors. They want to exercise and they want transportation that’s not a bus, a train, or a trolley. You have this massive issue of climate change — and consumers actually wanting to do something about it.” Even before the pandemic hit, cities around the world were instituting more bike-friendly transportation plans. “There is this huge problem of congestion,” Burke says, “and they’ve figured out that the bicycle is the perfect tool for dealing with it.” (Burke is also dealing with a nascent #BoycottTrek movement, after the company found itself at the center of protests around racial injustice and police brutality for selling bikes to police departments.)
Trek, which is privately held, does not disclose sales numbers, though the company reportedly sells about a million bikes a year. A company spokesperson says that it expects 2020 sales to be more than double those of 2019, and is expecting sales of kids bikes and e-bikes to surge this holiday season. As of this month, it will be about 120 days since Trek boosted its orders, and that new inventory will finally be arriving — though Burke does not expect the bikes to stay in his warehouses for long.
Like any CEO riding a bull market, Burke is having a blast. But he also finds himself oddly nostalgic for those days back in April, when no one had any idea what the future might hold. He thinks about a company-wide address he gave at the outset of the crisis. “This will be our finest hour,” Burke told his troops. “And it was,” he says. “We just crushed it.”
