Pro's Closet raised some cash

[T-Crush]

Online used bike retailer The Pro’s Closet has completed a $12 million funding round and is moving its headquarters from Boulder to Louisville.

The company said Wednesday that the funding, which was led by venture capital firms The Foundry Group and Edison Partners, brings the total investments in The Pro’s Closet to more than $27 million.

The Pro’s Closet will also move its headquarters from 2845 29th St., Suite C, in Boulder to the 137,000-square-foot space at 1900 Taylor Ave. in Louisville, which was formerly the North American headquarters for the outdoor brand Fenix, whose subsidiaries include Fjallraven. The Pro’s Closet will occupy 40,000 square feet and 24 shipping bays at 1900 Taylor, according to a press release.

The Pro’s Closet was founded in 2006 by Nick Martin, who is still the company’s CEO. According to the company’s website, Martin began by selling unwanted bike gear on eBay. Now, it sells through its own website and markets itself as the world’s largest retailer of used bikes. Its bikes are certified pre-owned, and its business model includes a guaranteed 18-month buyback for all bikes.

https://www.dailycamera.com/2020/09/11/bike-retailer-the-pros-closet-raises-12-million-moves-headquarters-to-louisville/

[old_fat_and_slow]

Wow, who wuddah thunk selling used bikes and parts on Ebay could grow to a $27 million dollar business? Not me.

[buddybikes]

Small shop I used to work in (perhaps 8 people working at a time) grossed 2.8 just selling specialized and treks.

[C40_guy]

Wow, who wuddah thunk selling used bikes and parts on Ebay could grow to a $27 million dollar business? Not me.

$27M is how much they've raised overall, not how much they sell annually.

One website (https://growjo.com/company/The_Pro%27s_Closet) estimated their annual sales at $9.3M. (TPC does not release revenue information).

[peanutgallery]

You always have to have "growth" in situations like this. Investors et al

High times now, be interesting to revisit down the road

[dbnm]

I wonder how much the rent was in Boulder.

Housing Costs in Boulder (https://www.zillow.com/boulder-co/home-values/#:~:text=The%20median%20home%20value%20in,Boulder% 20Metro%20average%20of%20%24350.)

[zmudshark]

Short drive from the airport, where the UPS hub is located.

Never mind, Louisville CO, not KY

[robt57]

Wonder how far they unzipped their fly...

[T-Crush]

$27M isn't the revenue, but it isn't the total valuation either. If the founders still own 25%, and that's just a guess, that would put the valuation somewhere in the $36M range.

These are good times in the used bike space, and smart move to secure funding during it. No one says you have to wait for "normal" to reappear to go to market.

[FlashUNC]

Agreed, was wondering how large the stake is and, by extension, how the outside investors are valuing the business.

Definitely the time to bring in cash though, given the on-going bike boom.

[Hawker]

I guess the fact that they were in Boulder, a city often thought of as a hub for serious cycling didn't really come into play. Yep, probably rent, taxes and maybe shipping costs from a more central location?

But what about good coffee?

[AngryScientist]

Definitely the time to bring in cash though, given the on-going bike boom.

yes, but the flip side is it's also probably a good time to exercise caution with expansion. i'm sure it's cheaper in st loius than boulder, but they are significantly expanding their square footage, and presumably staff. the level of bike buying frenzy is not going to keep up forever, especially if/when a major recession hits, so hopefully for them they can continue to support the expanded operation far into the unknown future.

[KJMUNC]

glad I got paid for my Pinarello last week before they start changing policies :banana:

Best of luck to them.....

[hellvetica]

Good for them. They found a cool business model, and it worked.

[lookout2015]

They’re not really leaving Boulder. Their new space is in Louisville CO — it’s the next suburn/sprawl east of Boulder

[FlashUNC]

yes, but the flip side is it's also probably a good time to exercise caution with expansion. i'm sure it's cheaper in st loius than boulder, but they are significantly expanding their square footage, and presumably staff. the level of bike buying frenzy is not going to keep up forever, especially if/when a major recession hits, so hopefully for them they can continue to support the expanded operation far into the unknown future.

We're already in it.

[NoMoreParagon]

very good timing on their part.. I found pro's closet good but in my humble opinion nothing beats Paceline for buying/selling. There is comraderie here, there is members knowing each other either because riding or because virtual transactions. there is appreciation for whatever is sold and pricing looks almost all the time fair.
Pro's Closet definitely did benefit from the flow coming from Mosaic..many of their NAHBS frames ended up to Pro's which undoubtedly helped them building a reputation.
I think this capital round might be based on their desire to expand to become maybe the Yoox or Gilt of bike manufacturers. Offload end of season inventory through them and keep a lean inventory.

[Hawker]

I assume this spike in bike sales is all about limited recreational things to do with families due to Covid. Is it safe to assume that this spike will increase or even remain at the same level for the next 12 months? I'm not sure about that?

I trust bike shops and others in the industry will be prudent, especially if it involves debt.

[FlashUNC]

I assume this spike in bike sales is all about limited recreational things to do with families due to Covid. Is it safe to assume that this spike will increase or even remain at the same level for the next 12 months? I'm not sure about that?

I trust bike shops and others in the industry will be prudent, especially if it involves debt.

I'd hope at least a few of those folks have discovered something they enjoy and will continue to do even when things begin to open back up.

[tomato coupe]

Short drive from the airport, where the UPS hub is located.

Never mind, Louisville CO, not KY

It's actually right across the street from a huge FedEx terminal. It's also across the street from the Pearl Izumi headquarters, so there should be some good lunch rides everyday in that industrial park.

[peanutgallery]

What the Pros Closet sells is not what the typical LBS customer is looking for during this alleged "boom"

The "boom" is more of a scarcity of bread and butter basics. Nice bikes and parts are generally available. 7 speed MRX shifters for a bike someone bought on a budget 30 years ago are not. Juvenile bikes/parts, too

As soon as U4 Elite Travel Soccer comes back...

[tomato coupe]

Coincidentally, I got an email from PayPal about 5 minutes ago informing me I just got paid for a frame that was picked up 4 hours ago. It doesn't get any easier than that ...

[BobbyJones]

Pretty awesome for Nick Martin!

I didn’t realize they were that big and funded. Makes me wonder if they actually make money.

What’s their map? Curious if we’re looking at the start of an online, high end “play it again sports”. The bike market is only so big and crowded. Do people spend 5k on golf clubs and fishing rods?

[R3awak3n]

glad I got paid for my Pinarello last week before they start changing policies :banana:

Best of luck to them.....

They sent me a really good offer on a bike last week. Was very surprised how good it was. Just $350 less than I had it listed here on PL (and no one bought it at that price so I say offer was solid but I feel it is a hit or miss, some bikes will get terrible offers, others good offers)

[oldpotatoe]

yes, but the flip side is it's also probably a good time to exercise caution with expansion. i'm sure it's cheaper in st loius than boulder, but they are significantly expanding their square footage, and presumably staff. the level of bike buying frenzy is not going to keep up forever, especially if/when a major recession hits, so hopefully for them they can continue to support the expanded operation far into the unknown future.

This has been on their radar way before the Covid stuff. It's NOT a reaction to the weirdness going on now nor the 'rent' in that Boulder location. If you have even been at the Boulder location, they are PACKED in there. Quickly ran out of room. Besides, Louisville is right up the street, not like they ARE going to Louisville KY..Gonna be a PITA to move tho...:eek:
It's actually right across the street from a huge FedEx terminal. It's also across the street from the Pearl Izumi headquarters, so there should be some good lunch rides everyday in that industrial park.

Pretty close to Wheels Manufacturing also(now owned by the family that owns Quality Bike Parts)..great location, easy ride from Boulder. Lots of 'local' riding around that area too. Good on Nick, he's one of the good ones in the daffy bike biz.

[charliedid]

What the Pros Closet sells is not what the typical LBS customer is looking for during this alleged "boom"

The "boom" is more of a scarcity of bread and butter basics. Nice bikes and parts are generally available. 7 speed MRX shifters for a bike someone bought on a budget 30 years ago are not. Juvenile bikes/parts, too

As soon as U4 Elite Travel Soccer comes back...

Exactly

Good for The Pro's Closet. I bet this would have been happening regardless of any sort of "boom"

[fa63]

There was a recent Cycling Tips podcast where they interviewed an investment analyst who studies the cycling industry. He was cautiously optimistic about the sustainability of the recent trends, although he said that the high-end market hasn't really experienced any increases like the entry-level market.

At our shop, we are stocking up on sub-$1000 bikes for the most part.

I assume this spike in bike sales is all about limited recreational things to do with families due to Covid. Is it safe to assume that this spike will increase or even remain at the same level for the next 12 months? I'm not sure about that?

I trust bike shops and others in the industry will be prudent, especially if it involves debt.

[peanutgallery]

How'd you get sub $k bikes?

Rumor has it that many companies are only fulfilling bike orders in tier 1 markets...or if there's a Trek store up the street:). It's a mess

https://www.bicycleretailer.com/opinion-analysis/2020/09/12/vosper-2021-shaping-be-most-interesting-year-decades

There was a recent Cycling Tips podcast where they interviewed an investment analyst who studies the cycling industry. He was cautiously optimistic about the sustainability of the recent trends, although he said that the high-end market hasn't really experienced any increases like the entry-level market.

At our shop, we are stocking up on sub-$1000 bikes for the most part.

[fa63]

How'd you get sub $k bikes?

Rumor has it that many companies are only fulfilling bike orders in tier 1 markets...or if there's a Trek store up the street:). It's a mess

https://www.bicycleretailer.com/opinion-analysis/2020/09/12/vosper-2021-shaping-be-most-interesting-year-decadesOur shop carries several "not-so-well-known" brands (Jamis, Marin, KHS, Felt) and we got in line pretty early for the '21 models. Mostly hybrids, dual-sport bikes and entry level hardtails. And a few basic road/gravel bikes.

[peanutgallery]

Never thought I'd say this, but I would do just about anything for a pallet of KHS bikes

We've had hundreds of bikes on order since May and received less than a dozen. Good on you guys

Our shop carries several "not-so-well-known" brands (Jamis, Marin, KHS, Felt) and we got in line pretty early for the '21 models. Mostly hybrids, dual-sport bikes and entry level hardtails. And a few basic road/gravel bikes.

[pbarry]

Fwiw, they've had a big warehouse in Longmont for the last 2 years or so. The Boulder space was mostly office space and their museum.

[KJMUNC]

I'd love to know some inside stats on their sales (avg inv. hold time for bikes, margin on purchased bikes, etc.)

They paid me more than I expected for my bike (and more than I had it listed), then they posted it on their site today for $2k+ than they paid me. :eek: Good for them if they can get it, but that seems crazy.

During my transaction I attempted to negotiate for a pair of wheels and was told that the best they could do is offer a $25 discount.....on a $3k set of Lightweights....which have been for sale for weeks and continue to sit.

Their credit offer was rich, but I couldn't use all of it.....I asked if I could split the credit offer into 75% credit (to basically barter for the wheels I wanted) and 25% cash, but was told "our accounting doesn't allow for that", which is code for "I'm a first-line person and can't approve stuff like that". Instead I took the cash payout and they still have a pair of wheels that aren't selling while being out a chunk of cash. Makes me wonder about what they do with slow moving inventory.

[Hawker]

They’re not really leaving Boulder. Their new space is in Louisville CO — it’s the next suburn/sprawl east of Boulder

Color me stupid. I was assuming Louisville, KY. I never even knew there was a Louisville, CO. Guess this move isn't as huge as I was thinking. And it makes more sense.

[texbike]

Man, there is just a TON of money out there looking for a place to invest. That seems like a heady valuation to me. Revenues do not equal profits. Where does TPC go from here? New bike/equipment sales? Different lines outside of cycling? The consistent supply of used gear seems like it could be a bit unpredictable which would impact their sales.

Regardless, good for them!

Texbike

[Clean39T]

They paid me more than I expected for my bike (and more than I had it listed), then they posted it on their site today for $2k+ than they paid me. :eek: Good for them if they can get it, but that seems crazy.


All I'll say is that's an impressive price it's listed for...especially with the slammed stem!* :banana:

https://www.theproscloset.com/products/pinarello-dogma-k8-s-road-bike-2016-59-5cm

https://cdn.shopify.com/s/files/1/2318/5263/products/BRD18417_PH1_01_800x800.jpg?v=1600137043


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..

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* inside joke in these parts..

[BobbyJones]

Was curious to see what their focus was. The $5K and up surprises me, but I guess the brand cachet helps alot. For those interested:

[Hellgate]

Color me stupid. I was assuming Louisville, KY. I never even knew there was a Louisville, CO. Guess this move isn't as huge as I was thinking. And it makes more sense.About 5 miles away. Out of the People's Republic everything is 50% less. The problem is you don't get the snarky, holier than tho attitude from New Hampshire transplants. Think Jeff Spicoli as a total dick.

[peanutgallery]

This is US History, I see the globe right there

About 5 miles away. Out of the People's Republic everything is 50% less. The problem is you don't get the snarky, holier than tho attitude from New Hampshire transplants. Think Jeff Spicoli as a total dick.

[oldpotatoe]

About 5 miles away. Out of the People's Republic everything is 50% less. The problem is you don't get the snarky, holier than tho attitude from New Hampshire transplants. Think Jeff Spicoli as a total dick.

Center to center about 12 miles and I thought all the snarky holier than thou people were from Texas.

Gee, I got a Big Mac in Louisville and zounds, it was the same price as in Boulder..amazing..:eek:

[Hellgate]

Center to center about 12 miles and I thought all the snarky holier than thou people were from Texas.



Gee, I got a Big Mac in Louisville and zounds, it was the same price as in Boulder..amazing..:eek:That's Dallas. [emoji6]

[pncguy]

I guess the fact that they were in Boulder, a city often thought of as a hub for serious cycling didn't really come into play. Yep, probably rent, taxes and maybe shipping costs from a more central location?

But what about good coffee?

Very good coffee in Louisville, although a slight drive from their new location.

[ColonelJLloyd]

They're spending some of this new cash on ads during NBCSN's TdF coverage.

[KJMUNC]

All I'll say is that's an impressive price it's listed for...especially with the slammed stem!* :banana:

https://www.theproscloset.com/products/pinarello-dogma-k8-s-road-bike-2016-59-5cm

https://cdn.shopify.com/s/files/1/2318/5263/products/BRD18417_PH1_01_800x800.jpg?v=1600137043


..

.

* inside joke in these parts..

Yeah, I was quite surprised at their offer, as I expected to take a bath on it considering I'd just installed brand new R8000, added those wheels, and built out the cockpit to my spec. That said, the price they're asking is an order of magnitude beyond what they paid me. If they can get it, good on them....oh and btw, their pictures omit the most significant condition issue: a deep paint ding on the left rear seatstay. I applied touch up to at least not have a black divot in a field of white paint, but if I paid $5k for that bike and found that upon arrival I'd be seriously pissed and asking for a refund.

[prototoast]

They're spending some of this new cash on ads during NBCSN's TdF coverage.

For the past few years, it has felt like 50% of the ads I see online are for TPC. I wouldn't be surprised if they spend more on online advertising than they do buying bikes.

[colker]

Man, there is just a TON of money out there looking for a place to invest. That seems like a heady valuation to me. Revenues do not equal profits. Where does TPC go from here? New bike/equipment sales? Different lines outside of cycling? The consistent supply of used gear seems like it could be a bit unpredictable which would impact their sales.

Regardless, good for them!

Texbike

I bet on their own line of new made in china carbon bikes.

[colker]

All I'll say is that's an impressive price it's listed for...especially with the slammed stem!* :banana:

https://www.theproscloset.com/products/pinarello-dogma-k8-s-road-bike-2016-59-5cm

https://cdn.shopify.com/s/files/1/2318/5263/products/BRD18417_PH1_01_800x800.jpg?v=1600137043




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..

.

* inside joke in these parts..

Didn´t you guys just bought this bike?
:fight:

[KJMUNC]

Didn´t you guys just bought this bike?
:fight:

haha...I love the "you guys" part of this sentence. Yes, Clean bought it and subsequently sold to me. I had no plans to sell, yet on a whim (after seeing one of their ads....so their advertising worked once!) I submitted two pictures and TPC came back within 12hrs with an offer I couldn't refuse (and allowed me to buy the Factor O2 I'm building) and frankly wouldn't have felt comfortable selling it for here since it had already changed hands so recently.

Also agree on the "made in China" own line of bikes. Look at Merlin, Ribble, etc....they're all doing it and I'm assuming doing relatively well. What's to stop TPC from becoming the dominant US e-tailer and displacing (or rolling up) Nashbar, what's left of Performance, etc??

[Clean39T]

......if I paid $5k for that bike and found that upon arrival I'd be seriously pissed and asking for a refund.

Refunds are now for store credit only, unless purchased through eBay, where you have more protection as a buyer.

This is my main frustration with them - they are managing a high volume of sales and seem to miss quite a few condition and measurement details that I would consider critical to appropriately valuing and considering a used bike purchase.

But I am in general not their target demographic for complete bikes or framesets, unless somehow they significantly underprice something on accident, as has happened in the past.

[colker]

haha...I love the "you guys" part of this sentence. Yes, Clean bought it and subsequently sold to me. I had no plans to sell, yet on a whim (after seeing one of their ads....so their advertising worked once!) I submitted two pictures and TPC came back within 12hrs with an offer I couldn't refuse (and allowed me to buy the Factor O2 I'm building) and frankly wouldn't have felt comfortable selling it for here since it had already changed hands so recently.

Also agree on the "made in China" own line of bikes. Look at Merlin, Ribble, etc....they're all doing it and I'm assuming doing relatively well. What's to stop TPC from becoming the dominant US e-tailer and displacing (or rolling up) Nashbar, what's left of Performance, etc??


That Pina is a hot selling bike on line w/ guys jumping to get one. Pros closet must rate the dogma line on the top of their "buy it" list.

[KJMUNC]

That Pina is a hot selling bike on line w/ guys jumping to get one. Pros closet must rate the dogma line on the top of their "buy it" list.

Yep, that is the only rationale I can think of....plus it has a virtually new groupset and really nice set of wheels that most aren’t going to get with their standard LBS build.

That K8-S is a killer bike....was way better than I expected.

[oldpotatoe]

Watching the TdF..ad-free hasn't started so watching the 'pre game' with VanderVelde, Horner and some 'civilian' bean bag..2 Pro's Closet banners on either side of their podium plus ads...I guess so, that can't be cheap.

[beartrapper]

I assume this spike in bike sales is all about limited recreational things to do with families due to Covid. Is it safe to assume that this spike will increase or even remain at the same level for the next 12 months? I'm not sure about that?

I trust bike shops and others in the industry will be prudent, especially if it involves debt.

Initially there was an enormous supply issue because of the pandemic. Many basic things like tires, pumps and kickstands were on backorder for months.