Prominent cycling distributors in the UK believe there is cause for optimism in the industry, despite profits falling to their lowest level in recent years.
Overstocking and supply chain issues, brought on during the Covid pandemic, have led to significant losses across cycling companies, but sales are now said to be picking up again.
In financial accounts filed last month, Northamptonshire-based Extra UK – distributor of brands such as Fizik, Pirelli and MET – saw profits fall 92% in the year to December 2023. The company posted profits after tax of £89,815 for the 12-month period, compared to £1,122,859 for an extended 14-month period to December 2022.
For Extra CEO Will Fripp, the profits were a "satisfactory result" given the "difficult market conditions".
"Things remain tough for everyone in the trade, but here at Extra things are actually going pretty well," he said in comments shared with Cycling Weekly. "We are where we expected to be in terms of sales performance – that's ahead of last year and ahead of our budget – so although no one is pretending all is great just yet, we are certainly grateful to be heading in the right direction."
Founded in 1995, Extra consistently posted profits in excess of £1 million in 15 years prior to 2023, spiking in October 2020 when the company made £2.68 million after tax during the Covid pandemic.
Today, Fripp says, his outlook on the industry "certainly isn't all doom and gloom". Much of the post-pandemic overstocking in the parts and accessories market has now been "worked through", he added. "The tradewinds remain good, and we believe strongly in the future of our sport, pastime and mode of transport.
"Underlying demand is there, and will continue to improve in the coming months and years."
Similar optimism can be found in distributor Chicken CycleKit’s most recent accounts, despite a 73.5% year-on-year drop in profits. In an adjoining note, commercial director Michael Catlin said he and the board were "pleased with the company's performance and profitability", despite a fall from £1,317,464 after tax in December 2022, to £349,690 in December 2023.
"The first half of 2023 saw a challenging sales environment, a consequence of the oversupply of previous years with recovery only starting in the final quarter of the year," Catlin wrote last month.
"Despite such market difficulties, the directors at year end were pleased with the company's performance and profitability. The company has successfully continued to look to expand the brand and product offering, as the market returns to more positive times.
Like Extra, sales are said to be up for Chicken CycleKit in 2024, and "far ahead of budget".
"The company expect that 2024 will show a continued strengthening of its market position with additional growth in turnover and profit expected in 2025," Catlin wrote.
Recovery from industry challenges has proven more difficult for other major UK distributors. Last week, Cycling Weekly reported that i-ride.co.uk has entered administration, with all staff made redundant. The company’s woes mirror those of other notable distributors, such as Moore Large, FLi and 2Pure, who all collapsed last year.
