Bike brand Canyon enjoyed a 23% rise in sales during the first nine months of 2023 but partial results by key stakeholder GBL revealed a surprise loss of €2 million, contributing nothing to GBL's results for the nine-month period.
This is down from a profit of €29m for the same period in 2022 according to GBL.
A Canyon representative insisted that the company's EBITDA (earnings before interest, taxes, depreciation and amortization), which measures the profitability of an operating business, is still in positive territory despite being down 25% according the GBL's half-year results for 2023 published on June 30.
The latest financial results for the German-based direct-to-consumer brand and controlling investor GBL highlight the current problems of the bike industry after the boom of the COVID-19 pandemic and the subsequent oversupply and fall in sales that have hit many brands.
Giant, the world's largest bike manufacturer, reported a 49% slump in profits amid "weak demand" from European and US markets to just £38.1million for the third quarter of 2023.
Other brands and distributors have suffered even more, with WiggleCRC entering into administration, cutting jobs and switching off international sales channels in the hope of finding a buyer.
According to a statement from Groupe Bruxelles Lambert (GBL), which acquired Canyon in 2020, sales in the first nine months of 2023 reached €621 million, up from €506 million in the same period of 2022.
Despite higher sales volume, supplier issues affected the availability of Canyon's high-margin road and gravel bikes in the third quarter but GBL claimed they have since been resolved.
Canyon also made significant long-term investments in 2023, including opening a new headquarters and innovation lab in Koblenz, Germany, launching new local services and expanding its workforce by 287 to 1644.
Canyon has also embarked on a series of new initiatives which they believe have significant upside potential. This includes further penetration in the US market, a growth in e-bikes and developing it's 'sports gear' offering.
Canyon CEO Nicholas De Ros Wallace tried to look on the bright side of the brand’s results in a statement sent to Cycling Weekly.
“We saw most companies in the bicycle industry responding to inventory challenges with large discount campaigns in 2023.
“When we also decided to do so, it not only led to increased sales, but also inspired new and existing customers to interact and engage with Canyon, and ultimately to enlarging the cycling community.”
Canyon is known for its road, gravel and ebikes and enjoyed significant success at professional level thanks to sponsorship of Mathieu van der Poel and his Alpecin-Deceuninck squad, while Kasia Niewiadoma won the women’s Gravel World title on a Canyon due to racing with the Canyon-SRAM team.
In January this year, Canyon reportedly reduced the prices across its range by up to £400 in Britain and made similar discounts in other countries, including the USA, as it fought with rival brands for sales.
"While high inventory levels and high discounts are at play in the bicycle industry, 2023 still saw the company continue its strong growth trajectory," Canyon said in a statement.
"Canyon's innovative approach, proven by our athletes and pro sports teams, as well as the benefits of our direct-to-consumer business model, are crucial success factors. Given the challenging global economy, our performance this year was significant and it indicates the continued high demand for Canyon's premium bicycles."
