During the Covid pandemic, consumers embraced ways to exercise that replaced being in a gym. That’s because gyms, even with social distancing protocols in place, were places where the virus could spread easily.
My personal trainer’s gym limited the number of people allowed in the facility at any one time, sanitized surfaces often, and even had a sort of robot that misted the facility with sanitizer. It was a good effort, but even with those restrictions in place, my personal trainer and I often opted to meet outside.
Many Americans made similar choices. They opted for exercise options that kept them outside, which produced a boom period for bicycles.
“Early in the pandemic, a surge of interest in cycling pushed sales up 64% to $5.4 billion in 2020, according to the retail tracking service Circana. It wasn’t unheard of for some shops to sell 100 bikes or more in a couple of days,” according to ABC News.
That boom period did not last.
“The industry had a hard time keeping up with the demand for a couple of years, but then demand slowed as the lockdowns ended, and then a lot of inventory started showing up,” Stephen Frothingham, editor-in-chief of Bicycle Retailer & Industry News told Denver’s ABC 7. “…The industry has struggled with having too much inventory, at the supplier level, at the factory level, at the distributor level, at the retail level.”
It’s a drop that played a part in pushing Lynskey Performance Products into filing for Chapter 11 bankruptcy.
Leading bicycle maker, retailer files Chapter 11
While Lynskey may not be a mainstream name outside of the biking community, the Chattanooga-based titanium bike and component manufacturer has a deep history in the market.
The company was established in 2005, and its owners have a long history in the cycling space.
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“David Lynskey, the company founder, was also the founder of Litespeed Cycles in 1984 and led that business to its sale in 1999. Both brands are Chattanooga-based and specialize in premium titanium bikes and componentry; of the two, Lynskey offers a lower-cost, direct-to-consumer alternative,” according to Escape Collective.
Documents filed on PacerMonitor verify that the company filed for Chapter 11 bankruptcy protection on April 30 in the U.S. Bankruptcy Court for the Eastern District of Tennessee. The filing is a voluntary Chapter 11 case, meaning the company is seeking to reorganize its business while continuing operations.
Lynskey Performance Products Chapter 11 bankruptcy at a glance
- Court: Tennessee Eastern Bankruptcy Court
- Case #: 1:26-bk-11156
- Court filings show the company has between 200 and 999 creditors.
- The company reported estimated assets between $0 and $50,000, compared to liabilities ranging from $1 million to $10 million.
- The case is classified as a small business debtor filing under Chapter 11.
- The company indicated it intends torestructure under court supervision rather than liquidate.
According to the petition signed by representative Mark Lynskey, the company has added a list of creditors who have the 20 largest unsecured claims. Out of these, Full Speed Ahead, Inc. has made the largest claim of approximately $161,594. Models include GR Edge, Odyssey, Meraki, Zephyr, Aeon, Atlas, and Elysium, WhatNow.com reported.
Court filings indicate that funds will be available for distribution to the unsecured creditors, according to PacerMonitor.
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Cycling industry facing a common problem
The Covid pandemic pulled forward demand in a number of industries. That means that the bicycle sales boom during those dark days changed the sales cycle for the industry.
“Among adult riders, participation is down 5% versus 2022, but grown-ups since 2020 are still riding bikes more than in any time period since 2000, which is as far back as my records go. Overall, this should be seen as good news for the industry,” according to Bicycle Retailer.
People are riding bikes, but they’re still riding the ones they purchased in 2020 or 2021.
“Overall ridership, which peaked in 2022, is still higher than in any year since 2005. It’s down about 4.5% from its 2022 crest, but in a historical context, it’s still good news,” the industry site added.
Ridership is not the industry’s issue.
“The problem is that we’ve had excess inventory choking bike brand warehouses since 2023, and although it’s been heavily discounted by suppliers — in at least some cases, below their own cost — consumers still aren’t buying in sufficient quantities to move the inventory needle out of the red zone,” reported Bicycle Retailer.
Bicycle sales are hurt by too much inventory
The slowdown continued into 2024.
“Everybody agrees that 2024, unfortunately, is another lost year for the industry,” Tjeerd Jegen, CEO of one of Europe’s largest cycling businesses, Accell Group, which owns brands including Raleigh, Koga, Batavus, and Ghost, told The Financial Times. “We’re still collectively sitting on too much stock.”
A glut of product has made it hard for companies like Lynskey to sell their bikes at full price.
“Cash is tied up in inventories and you see a lot of brands offering heavy discounts as they are trying to turn inventory into cash,” Joshua Hon, the founder of Taiwan-based folding bike maker Tern Bicycles, told journalists in Frankfurt.
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