The Pro's Closet at it again

[Mark McM]

It's always sad when people lose their jobs (particularly before the holidays), but anybody who has been paying attention could see this coming. The only unknowns were timing and depth of layoffs.

The bicycle industry has seen huge bump in sales volumes the last two years, primarily due to the pandemic. Another industry seeing a huge bump were home exercise equipment (see the recent stories about companies like Peloton and Saris). As the economy moved out of the pandemic phase, the surge in bicycle industry sales have naturally ebbed in response. Many bicycle (and exercise equipment) companies increased their head counts and payrolls in respond to the initial bump in demand, and now that sales are drying up, they naturally have to reduce their head counts and payrolls. Most of the positions being eliminated would not have been created to begin with if weren't for the pandemic induced surge. This is more like a correction in bicycle industry head count, rather than a true contraction.

[Mike V]

They need to keep the employees on to do some accurate descriptions and sizing of the bikes.

[prototoast]

Originally Posted by tomato coupe

Holiday season ≠ resale bike season.

TPC has historically had really big black friday / cyber monday sales. Not just bikes, but components too. The statement from the CEO certainly doesn't make it sound like this was just normal seasonal fluctuations for them.

"As reported in mainstream and industry press, the economy and cycling industry have faced macroeconomic headwinds, and as a result, TPC made the difficult decision to rightsize our workforce," said CEO John Levisay in a statement to BRAIN. "We continue to stay optimistic for the future and have seen year-over-year growth. These cuts, while extremely difficult, enable TPC to remain nimble and competitive while building a strong foundation for continued success."

[peanutgallery]

VC $$$ das kaput. They certainly burned thru some cash in a short amount of time. That was probably a lot of fun

https://www.bicycleretailer.com/indu...g#.Y02gVHbMK01

Hadn't they been giving out store credit in lieu of cash in the last little bit?

This is going to be a common theme in the biz, the struggle bus is going to need some extra seating. And yes, I said struggle. Make room for some bike companies and distributors. Lots of inventory has accrued and the demand has cooled off

Hopefully, all affected employees land on their feet

In other news, EPIC and IKON pass sales are up by like 10%....again. So the drop in bike demand isn't really about incoming doom and gloom of a recession IMHO

[pgrizzwald]

I noticed last night that they are back to selling bikes on ebay again. It has been a long time since they went down that route, maybe even a year or two. Not saying it's an indicator of things to come, but could be proof that they have an inventory problem and either aren't selling well through their site or are trying to liquidate their inventory by all means necessary.

[Old School]

Originally Posted by tomato coupe

Holiday season ≠ resale bike season.

New bikes are really expensive now, and to be able to mouseclick a clean used bike to go under the tree for Johnny, may be Holiday Season 2022.

But only if you're ready for it.

[tomato coupe]

Originally Posted by Old School

New bikes are really expensive now, and to be able to mouseclick a clean used bike to go under the tree for Johnny, may be Holiday Season 2022.

I don’t think their customer base is buying bikes to put under the tree for little Johnny.

[Old School]

Originally Posted by tomato coupe

I don’t think their customer base is buying bikes to put under the tree for little Johnny.

Exactly my point.

If "their customer base" is slowing down purchases, then pay the employees to gift wrap bikes and put them on the website for Little Johnny instead of laying them off.

[merlinmurph]

At the beginning of the summer, I heard from at least two sources (podcasts) that the industry was going to have a correction in the fall. The covid boom is over, shipments of bikes and parts is getting better, and inventory is coming back. They were 3xpecting a bit of a glut.

First, does anybody in the industry see this?

If so, maybe PC sees the handwriting on the wall and is making adjustments for not-so-rosy forecasts and seasonal fluctuations. It always sucks laying people off, but if the current market is fair and the future outlook isn't any better, the business has to adjust.

Just a guess.

[tomato coupe]

Originally Posted by Old School

Exactly my point.

If "their customer base" is slowing down purchases, then pay the employees to gift wrap bikes and put them on the website for Little Johnny instead of laying them off.

Gift wrapping the bikes will increase sales? I don't think that's going to happen.

[mstateglfr]

Originally Posted by Old School

Exactly my point.

If "their customer base" is slowing down purchases, then pay the employees to gift wrap bikes and put them on the website for Little Johnny instead of laying them off.

You lost me.

[Ken Robb]

Originally Posted by oldpotatoe

Never good to lay anybody off but they see the p&l and make corrections before they are ‘struggling’. I can’t really summarize anything but in my bag of business description words…with regard to TPC, ‘struggling’ isn’t one I would use.

How about "adapting to a changing market"?

[Ken Robb]

Originally Posted by unterhausen

When I worked as a mechanic, I always got laid off in the winter. That's why I'm not a mechanic.

What did you do in your "off-seasons"?

[Clean39T]

Originally Posted by peanutgallery

In other news, EPIC and IKON pass sales are up by like 10%....again. So the drop in bike demand isn't really about incoming doom and gloom of a recession IMHO

Recession's hit different at different levels. I'm guessing the average TPC client is middle-income, looking for a deal below MSRP - and a lot of their growth was driven by a lack of inventory at traditional outlets and free money during the pandemic showing up in people's pockets (whether that's PPP grifters or just not spending it on vacations or commuting, all the same). Now that most are ignoring the pandemic and are back to doing what they do, and HELOC's and cash-out refi's aren't keeping folks swimming in leveraged cash, it's a different ballgame. Add in lay-offs elsewhere for the millennial demographic that buys a lot of bikes and stonks/crypto nose-diving, there's got to be just less cash changing hands for consumer baubles. The crappy thing for TPC is that there's about to be tidal wave of folks looking to offload their pandemic purchases on the cheap to make rent or buy xmas gifts - and without another influx of cash it's going to be cheap to pick those bikes up for pennies on the dollar to make a nice resale margin to the folks that are still employed. That's my armchair take. Which is inevitably wrong. And who cares anyway? It's their business, not ours - and unless their management is here posting under an alias, we have zero idea what is actually going on with the company, their strategy, etc. That press release could be a corporate MadLib for any company in these times.

[Clean39T]

Originally Posted by Ken Robb

How about "adapting to a changing market"?

Bingo. The pearl clutching here (HRM clutching?) is pretty funny..

I continue to be a happy customer of theirs and wish them well. I always get exceptional customer service when needed and have zero complaints.