This article originally appeared on Bike.com and was republished with permission. When Covid-19 locked up retail stores in March, bike shops were as worried about landing on the other side as Brooks Brothers and Gold’s Gym. When the pandemic motivated millions of people of all ages, interests and abilities to get on a bike for the first time in ages, cycling stores rode away laughing, while many other retailers crashed.
Why Is Bike Retail Booming in the Time of Coronavirus?
Read article
Wall Street was watching. In October, Canyon, a high end, direct-to-consumer bike brand, announced that it was in talks with private equity and buyout firms. A sale could bring in $592 million and start a trend. “It was the story of the year,” says Stephen Frothingham, editor-in-chief of Bicycle Retailer & Industry News, an industry publication. “When the New York Times and Wall Street Journal are talking about the riding boom and shortage of inventory [in bike shops], it catches a lot of people’s attention. Investors start wondering, ‘How do I get a part of this?’” Canyon is a compelling story. In September, the 30-year-old German brand reported $474 million in global sales for 2020, a 30 percent bump from the year before. That included a jump in the U.S. market of more than 100 percent in June compared to the year before. Even though it’s only been selling bikes to Americans since 2016, bike industry insiders reckon its one of the four biggest bike sellers in the country. And because it only sells online, it’s not just another brand importing bikes from China, says Frothingham. “The companies that play in the space where bikes and technology overlap are getting a lot of interest,” he says. That’s especially true of the more tech side of the cycling industry. In September, one of Canyon’s suitors, KKR & Co, led a $450-million fundraising for Zwift, an online fitness platform for cyclists and runners. The Series C funding valued the company at $1 billion. Even before the pandemic the category was hot. Peleton, an interactive cycling and fitness training platform, raised $1.16 billion in 2019. That makes fitness apps popular with cyclists, like Strava and Wahoo, prime targets for major investments, figures Frothingham. E-bike makers look juicy too. Electric bikes have outpaced all other cycling segments for years, including a 190 percent bump in sales between March and June this year, according to research by NPD Group, a retail monitoring firm. “E-bikes are only at, like, iPhone 2.0,” figures Frothingham. “There’s still a lot of room for improvement.” One place the interest probably won’t go, though, is the bike industry heavy weights: Specialized, Giant and Trek. “A lot of companies are riding high, but a challenge they all have to growing is getting enough bikes,” Frothingham says. Almost every bike, whether it’s from Walmart or a $10,000 carbon fiber race machine is made in China or Taiwan. “No one is talking about building a new factory to increase capacity.” Smaller brands, flying high on the intense demand, have a better chance of finding a buyer. The interest from investors will continue as long as concerns about the safety of public transport and flying away for holidays continues. With no end in sight to these pandemic-fueled worries, expect the bike boom to keep rolling right through 2021.
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This article originally appeared on Bike.com and was republished with permission.
When Covid-19 locked up retail stores in March, bike shops were as worried about landing on the other side as Brooks Brothers and Gold’s Gym. When the pandemic motivated millions of people of all ages, interests and abilities to get on a bike for the first time in ages, cycling stores rode away laughing, while many other retailers crashed.
Why Is Bike Retail Booming in the Time of Coronavirus?
Read article
Wall Street was watching.
Why Is Bike Retail Booming in the Time of Coronavirus?
Read article
Why Is Bike Retail Booming in the Time of Coronavirus?
In October, Canyon, a high end, direct-to-consumer bike brand, announced that it was in talks with private equity and buyout firms. A sale could bring in $592 million and start a trend.
“It was the story of the year,” says Stephen Frothingham, editor-in-chief of Bicycle Retailer & Industry News, an industry publication. “When the New York Times and Wall Street Journal are talking about the riding boom and shortage of inventory [in bike shops], it catches a lot of people’s attention. Investors start wondering, ‘How do I get a part of this?’”
Canyon is a compelling story. In September, the 30-year-old German brand reported $474 million in global sales for 2020, a 30 percent bump from the year before. That included a jump in the U.S. market of more than 100 percent in June compared to the year before. Even though it’s only been selling bikes to Americans since 2016, bike industry insiders reckon its one of the four biggest bike sellers in the country. And because it only sells online, it’s not just another brand importing bikes from China, says Frothingham.
“The companies that play in the space where bikes and technology overlap are getting a lot of interest,” he says.
That’s especially true of the more tech side of the cycling industry. In September, one of Canyon’s suitors, KKR & Co, led a $450-million fundraising for Zwift, an online fitness platform for cyclists and runners. The Series C funding valued the company at $1 billion. Even before the pandemic the category was hot. Peleton, an interactive cycling and fitness training platform, raised $1.16 billion in 2019. That makes fitness apps popular with cyclists, like Strava and Wahoo, prime targets for major investments, figures Frothingham.
E-bike makers look juicy too. Electric bikes have outpaced all other cycling segments for years, including a 190 percent bump in sales between March and June this year, according to research by NPD Group, a retail monitoring firm.
“E-bikes are only at, like, iPhone 2.0,” figures Frothingham. “There’s still a lot of room for improvement.”
One place the interest probably won’t go, though, is the bike industry heavy weights: Specialized, Giant and Trek.
“A lot of companies are riding high, but a challenge they all have to growing is getting enough bikes,” Frothingham says. Almost every bike, whether it’s from Walmart or a $10,000 carbon fiber race machine is made in China or Taiwan. “No one is talking about building a new factory to increase capacity.”
Smaller brands, flying high on the intense demand, have a better chance of finding a buyer. The interest from investors will continue as long as concerns about the safety of public transport and flying away for holidays continues. With no end in sight to these pandemic-fueled worries, expect the bike boom to keep rolling right through 2021.
Keeping Pandemic Precautions in Mind During Group Outdoor Adventures
Read article
For access to exclusive gear videos, celebrity interviews, and more, subscribe on YouTube!
Keeping Pandemic Precautions in Mind During Group Outdoor Adventures
Read article
Keeping Pandemic Precautions in Mind During Group Outdoor Adventures
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