
Following slumps in 2009 and 2010, sales are "quite promising" at Guthrie Bicycle, which dates back to 1888.
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By Brice Wallace
The Enterprise
The past few years have seen interesting business cycles for cycle businesses.
A sampling of local bicycle retailers shows that some have experienced recent slowdowns because of the lingering effects of the recession, but most are picking up speed heading into 2012.
Mike Pratt, owner of Canyon Bicycles, with stores in Draper and South Jordan, injected some humor when asked how business is going. "Honestly, we’re pretty flat, which is the new ‘up,’ I hear,” he joked. “That’s what people say when I complain that we’re flat or maybe up a little.”
In business since 1993, the company expanded from the Draper store by adding the South Jordan location. “Last year, we had our first down year in our history [at the Draper store] but we were up overall as a corporation,” he said.
Actually, the number of units sold is down but the average price of a bicycle has risen, Pratt said. “People are willing to spend more. They want nicer bikes.”
He described bicycle retailing as “recession-resistant.”
“When you don’t have the money for a new swimming pool or a $1,000 summer vacation, you get a couple of road bikes,” he said.
During the past few years, he said, he has seen a shift toward road bikes, which start at $600 to $900, from mountain bikes, which start at $300 to $500.
“In a bad economy, people also might simply being wanting to recreate and enjoy themselves and improve their health. If you’ve lost your job, or if you have a job and you’re not getting what you want out of it, a lot of people want to do something for themselves, so they ride and get healthy. Biking is therapy,” he said.
As for the future, Pratt is unsure how his business will fare because of increased competition. But if the economy improves, he expects to sell more bikes that cost $4,000 to $10,000. “People would have more disposable income," he said. “More people would be willing to bump up. There was a time when people were buying houses and paying blindly. When things got a little scary out there, that demographic, with all that income, lost so much in the market and then didn’t buy the high-end bike. They were scared to spend the money.”
But people willing to spend on a bike have discovered it’s fun and economical. “First of all, it’s money that they want to spend,” Pratt said. “But you also have to take into account that you don’t need a trailer to tow it to a lake, and you don’t need to buy a lift pass.”
Dale Majors, owner of Bikewagon, is optimistic after his business experienced an economy-induced slowdown in 2011. The store is moving from North Redwood Road to 680 W. 200 N., North Salt Lake, with the new, 25,000 square foot location opening in March.
“Things are going well. We’ve had decent growth over the last year, and we’ll be opening up a new storefront,” Majors said.
Revenue growth is about 25 percent ahead of last year, but Majors cautioned that the figure represents the smallest revenue growth for the company, which has been operating since 2004 and typically has seen year-over-year growth topping 40 percent.
“It’s hard to move and we changed our back-end systems, so a lot of focus on sales was shifted to infrastructure issues, and that slows you down a bit,” he said. “But last year, we felt the economy more than any other year. People seemed to mention the economy more last year. It’s great having growth in a down economy, but we never really felt it much. Last year was the first time we felt it [the economy] being kind of an invisible hand where things slowed more than they had before, especially for the holiday season.”
But springtime usually gives a boost. “Things have already been picking up for us,” he said, “so I’m pretty optimistic.”
Richard Goddard, owner of Guthrie Bicycle, 803 E. 2100 S., Salt Lake, said his 10-employee business saw a rebound in 2011 from leaner times the previous two years.
Goddard said 2008 “was, without question, our best year. The economy was doing well and gas prices were really high. Combine those two and it’s good for bicycles. People were deciding to stay closer to home and said, ‘let’s buy some bikes.'”
But activity slipped in 2009 and even more in 2010 as the economy eroded.
“But in 2011, we had a little resurgence, and the last few months have been quite promising,” he said. “We’re back to where we were in 2009. We’re pleased. Last year, the spring and early summer had a lot of rain and snow, and we thought we would start off really poorly because the weather wasn’t cooperating. Yet, sales were quite good, and when the weathered improved, it exploded.”
One can debate whether the economy was any better in 2011 than in previous years, but Goddard said customer optimism might have been at work. “I don’t think people’s fear of the economy was quite as bad in 2011 as it was in 2009 and 2010,” he said.
And he added that while the bicycle industry might not be recession-proof, it is perhaps “refreshingly resistant.” Some people, he said, turn to cycling during a recession because they don’t want to drive their cars as much. Recession or not, he believes the resurgence of 2011 will be a springboard for even better sales at his company, in business since 1888.
“I’m very optimistic for 2012,” Goddard said. “When you look at the valley as a whole, I think it looks rosy.”
Masherz, at 1187 S. Redwood Road, has seen steady growth the past few years, regardless of the nation’s economic downturn. Owner Doug Lindeman noted, however, that the six-year-old company moved a little more than two years ago to its current, larger location.
“We were able to grow our storefront,” Lindeman said. “In West Bountiful, we didn’t have a huge storefront. We were able to expand our repair shop, too, and that was a big part of it, but mostly it was just having the space to properly sell the stuff we have.”
Business started taking off three or four years ago. Had the store been in business longer than six years, perhaps it would have had more data to better determine the impact of the recession. “It’s hard to say if it’s affected us at all. It’s probably affected everybody. Maybe we would have grown even more [without the recession],” Lindeman said.
As it is, Masherz saw 56 percent growth during 2011 from the prior year. “It’s been going really well,” he said.
Lindeman said 2012 growth will be perhaps 30 percent. “We expect to keep growing. Obviously, I don’t think we’ll have 56 percent growth this time next year,” he said. “But we’ve recently expanded and taken over some space next to the store, so we’ve tripled our storefront space in the last month.”