"Brompton profits plunge more than 99% amid bike industry turmoil"

[wafter]

As reported by the Guardian.

Not really surprising given the state of the industry, although I'd have thought they might have been a bit more resilieant given their probable market outside the typical cyclist and uses maybe shielding them a bit from the Covid boom..

 

[Gunk]

Will Butler-Adam’s has big ideas and is hugely ambitious (IMO a bit over ambitious), the problem is people are just not buying as many bikes as they were, and lots of potential customers are now working from home, they also ploughed a lot of their reserves into developing the G Line, I genuinely hope 2025 is kinder to them, as they are a good company producing a really good quality product. However perhaps they just need to be more cautious about the speed of expansion and growth.

I commented on this earlier in another thread.

 

[ebikeerwidnes]

I suspect they are suffering from a situation where everyone who was going to get one already has one

so they are just selling to the "upgrade market" and people who have had one stolen

Hope they don;t go under - we need good high profile bike makers!

 

[sevenfourate]

I suspect they are suffering from a situation where everyone who was going to get one already has one

so they are just selling to the "upgrade market" and people who have had one stolen

Hope they don;t go under - we need good high profile bike makers!

Making 1% don’t leave much on the table to re-invest ! Let’s hope they either have reserves. Or investors. Cause they’ll last about as long as dogs chasing cars in their current operating state…..

 

[Drago]

Business model and pricing structure are fo' sheet.

 

[biggs682]

You only ride one bike at a time and not every cyclist want's a brompton

 

[Gwylan]

Do worry about these companies that didn't see COVID as a blip.

 

[Gunk]

Business model and pricing structure are fo' sheet.

If you spend too much money and don’t sell enough products your business doesn’t last very long, doesn’t matter how strong your brand is. They should have fixed the roof when the sun was shining.

 

[FrankCrank]

Lucky double-barrelled Billy isn't a footie manager, we all know what happens to them when the score sheet looks dismal.

I too would be sad to see them go under, but the threat from the far east can be hard to ignore, or compete with.

 

[Gwylan]

Well, it's the cash flow that kills or cures.
Need to be clever about sinking too much or any money in the inventory cycle.
Better a nice shortage rather than big, expensive inventory - that's just piles of £50 notes you cannot spend.

The duration of the cash cycle is critical to the business model. That is, how long it takes for the money you spent starting making a bicycle takes to turn into money in your pocket.
Also just how much money is being taken before the end of the process.

 

[steveindenmark]

Their new facility in Kent has been put on hold.

Will Butler Adams is spending a lot of time in Asia. It would not suprise me if production moved there. They would be cheaper to produce and a vibrant market.

 

[markemark]

I suspect they are too expensive in the cost of living crisis for what is more often than not a commuting bike. I imagine their core demographic of city commuters either have all bought one, no longer travel into the office as often or can't justify the cost. It's a different market to the bike enthusiast who will spend big money on a dream bike(s) and regularly replace.

 

[ebikeerwidnes]

Well, it's the cash flow that kills or cures.
Need to be clever about sinking too much or any money in the inventory cycle.
Better a nice shortage rather than big, expensive inventory - that's just piles of £50 notes you cannot spend.

The duration of the cash cycle is critical to the business model. That is, how long it takes for the money you spent starting making a bicycle takes to turn into money in your pocket.
Also just how much money is being taken before the end of the process.

That's the problem witha lot of businesses
the skill set to make the bikes is very different to the skill set needed to control the finances

 

[markemark]

"Bike businesses across the world, but particularly in the US and Europe, have been hit by poor sales and discounting after a boom during Covid lockdowns prompted overoptimistic production, leading to excess stock in warehouses and stores."

I feel for the workers but the board of directors should hang their heads in shame at their naivety if they did this.

 

[ebikeerwidnes]

"Bike businesses across the world, but particularly in the US and Europe, have been hit by poor sales and discounting after a boom during Covid lockdowns prompted overoptimistic production, leading to excess stock in warehouses and stores."

I feel for the workers but the board of directors should hang their heads in shame at their naivety if they did this.

Yes - it was rather predictable after the pandemic
Lots of people who got a bike to get out of the house and away from their partner get fitter suddenly went back to work and their bike was just lying there
and so eventually got sold
so the boom stopped and there were bikes available for sale second hand - I presume

and recently there has been pressure on a lot of places for people to come back to working from the office again - so it all gets worse