BikeBiz Bicycle and cycling retail news
Here’s the letter from Burke:
"1. We track the year-to-year monthly sales of a group of 50 Trek retailers. In August, this group was up 23% compared to last year. Our preliminary numbers for September, show these retailers up over 10%.
2. Trek’s sales in Calendar Year 2008 are up significantly over last year. September sales in the U.S. market were up over 10%.
3. During the 1987 Stock Market crash and the recession of the early 90s, the bike business was relatively immune to market turmoil.
4. In this type of economy, there are winners and losers. SUV’s are losers; small cars are winners. We think bicycles are comparable to small cars.
5. A strong case can be made that this economic downturn may indeed turn out to be a good period for bicycles.
a. There are great medium and long-term trends for the bicycle.
b. The government is spending substantially more money on bicycling infrastructure.
c. Higher gas prices have created a cycling commuter boom.
d. Health issues and environmental issues are only going to continue to push people toward cycling.
Let’s be clear. I’m not saying that everything will necessarily be great. What I am saying is that from what I see, at this point in time, it appears that bicycle retail is strong.
You may be wondering about the financial strength of Trek.
1. Trek has never been in better financial health.
a. 2008 will be another record year for both sales and profits.
2. Trek’s net worth is substantial and continues to grow each year.
3. Trek has sizeable credit lines through a very healthy banking group including J.P. Morgan and Bank of America. Our relationship with J.P. Morgan dates back over 25 years.
Trek is as financially solid as it’s ever been. The single most important thing you can do to make sure your business is successful over the next 12 months and beyond is to improve every facet of your business."
There are currently three bike trade forum discussions about the state of the market, one on Cosy Beehive, another on Chris Writes (a Specialized employee), and one started by Tim ‘Masiguy’ Jackson on Bicyclemarketingwatch.
