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It’s perhaps reassuring when you find that even those at the very top of the bicycle industry tree are cycle enthusiasts. Bike industry goliath Derby Cycle – which sold 480,000 bicycles and achieved €235.5million revenue in 2010/2011 – took up a huge exhibiting space at Eurobike showcasing Focus, Univega, Rixe and Cervelo. Soon after being introduced to its CEO Matthias Seidler, BikeBiz was being enthusiastically taken through a series of pictures the chief executive had taken during a cycle trip to London during the Olympics.
“The infrastructure, I was amazed by that. I had to show other people what the UK has done. ‘Cycling Super Highways?’ – that’s incredible. The UK is getting there far quicker than anyone else.”
Perhaps he was flattering BikeBiz’s home country, but Seidler insisted that the UK’s cycle market has matured hugely over the past decade or so.
“Ten years ago the UK had the lowest average price for a bike in Western Europe and now it’s the European market with the highest growth in top quality bikes. Things can change pretty rapidly. And if only a quarter of the changes in London’s infrastructure are happening in other parts of the country…it’s tremendous.”
It’s not just the growth of the UK market that has been hitting the headlines over the past 12 months – it’s also been a big year for Derby Cycle: it merged with Pon Holdings, which in turn acquired Cervelo, and all in the last year. But despite significant changes behind the scenes, the firm’s approach to the UK cycle market remains the same as it established around a year ago when it adopted a direct distribution model for Focus on these shores.
Seidler states: “Our strategy for Derby Cycle in the UK hasn’t in any way been changed, adapted or touched for the reason that the change was at a corporate level.
“Our strategy is very simple,” the CEO explains. “Because of the difficulties we had in finding a distributor at the beginning of the last decade, we found Wiggle. We were very happy with them because at that time Wiggle was concentrated on UK – then they opened up and took their business global, so we made the decision to end our deal and started anew with our own organisation going direct.”
Since that watershed move, Derby’s Focus has seen what Seidler calls “incredibly success” on these shores. Focus scored ‘Bike of the Year’ titles with Cycling Plus, praise from Cycling Weekly, plus other assorted ‘Best in Test’ wins.
“That’s incredible success for us in terms of marketing and reception of the product. And we did that by re-focusing on the independent bike dealer in the UK, as we are on a worldwide basis. In that first year, we’re absolutely happy with our progress.”
The process of taking product direct to UK cycle retailers hasn’t proved a significant challenge for the company, which is based not so many miles away in Germany.
Seidler elaborates: “Logistically, Britain isn’t that far. We’re managing it from one warehouse and yes we can improve such as hopefully to cut our delivery times down by one business day. Our procedures are set up centrally using the same kind of logistic principles that were relatively easy for us to achieve. Most important for us are the people who work on the ground and we’ll be expanding teams in the future.”
While Derby Cycle has a wealth of brands it can call upon, Focus is where it is er, focusing its efforts.
“With the surge in race cycling and mountain bike cycling you’ve experienced in the UK we’re clearly focusing on the Focus brand. We’re concentrated on detecting the rise in urban cycling you’ve seen as well, and we’ve had a good experience of success on building on that area with e-bikes. We keep that option open to expand our e-bike business significantly in years to come. Whether urban cycling will be our main focus…I don’t know.”
But hold on, Derby Cycle’s boss says the mountain bike sector is experiencing a rise in the UK? Isn’t road much stronger?
“That’s not a differentiation that we make,” the Derby boss states. “Focus is a performance bike brand and we cover MTB extensively and the same for road. We are for both. For sure that over the last years the road cycling market is expanding, but that doesn’t mean we just leave MTBs aside.”
Despite all this optimism, the UK market isn’t all roses in 2012, as many bike retailers will be swift to comment on. What are Seidler’s views on a slowing market and the fact that Derby Cycles’ strong e-bike offering would possibly struggle in the UK?
“This year especially in Britain there have been many reasons for consumers to buy a television. There was the Olympics and the European championships in football too and that had a negative effect on the cycle market in April and May. People won’t spend the kind of money they do on TVs twice in a year, so cycling has suffered. Next year we won’t have those sporting events diverting money away.”
Seidler says that he sees further battles over MTB wheel sizes in the future and also a strong trend of transportation bicycles in the city for private use. It’s in that latter area that e-bikes can further boost mobility and help cyclists shift goods and children. The CEO elaborates on the lure of electric bikes: “Overall, e-bikes give quality of life to those that can’t cycle as they used to. It also expands your reach, so it’s positive for cycling usage. Thirdly, it encourages people to cycle more, which improves fitness. Steady state performance improves blood pressure, which is achievable via e-bikes. But it takes a while for it to take on,” Seidler concedes. “It’s completely opposite to the mindset of many cyclists – turning to cycling is often a deliberate choice to not use something that is motorised.”
Focus’ UK country manager Chris Needs is a key contact for UK retailers. He says expansion of the dealer network is next. “For us as a brand we’ve expanded to about 83 models and we want to have more retailers to bring the brand to market. That’s our focus for 2012, to expand our successful dealer network and infrastructure as well – we want to elevate the Focus brand to compete with some of the brands that have dominated for the last 20 years. We’ve made a very big step in our first year and want to build on that.”
Seidler sums up: “We’re looking to further grow our numbers of dealers and to improve the quality of dealers. To do that we’ll have to increase the sales force we have in the UK, so we’re looking to recruit. As the brand expands the team will too.”
“Our business is focused on the IBD. That’s one of our key strategies for the Derby Cycle group worldwide. The IBD and nothing else.”
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