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Australian specialty retailer 99 Bikes has announced its B Corp certification as the business continues to backpedal from its $12.4 million loss in FY23 after a $23.7 million profit the year prior. <\/p>\n
The retailer benefitted from an unprecedented sales boom during Covid, which saw revenue climb 51 per cent year on year to reach nearly $200 million in FY20, but the business has faced overstocking challenges post-pandemic that have dragged its revenue and profit. The company expects to post a profit in the 2024 financial year.<\/p>\n
The retailer also expects to benefit from the trend of electric bikes, and it has two national expos this year to showcase the company\u2019s fleet to consumers.<\/p>\n
Electric shock to profits<\/h3>\n
The popularity of electric bikes and scooters has been a key driver of revenue for the business recently, with electric bikes accounting for 99 Bike\u2019s biggest growth category.<\/p>\n
\u201cWe have our two electric bike expos each year, one for mountain bikes and the other for commuter bikes. This fleet of electric bikes that travel around the country gives everyone the chance to experience riding them on location for free,\u201d Andrew Garnsworthy, CEO of 99 Bikes’ parent company Pedal Group, said.<\/p>\n
The Electric Mountain Bike Expo started in February and runs through to April nationally and the Electric Commuter E-Bikes and E-Scooters Expo is scheduled for later on in the year.<\/p>\n
In comparison to pre-Covid sales across 99 Bikes Australia, store sales have increased by 6 per cent year-to-date and are up by 54 per cent in comparison to pre-Covid levels.<\/p>\n
Founding 99 Bikes and taking flight<\/h3>\n
Matt Turner, the current director of 99 Bikes, opened the first store in Milton, Brisbane, in May 2007.<\/p>\n
A year later, Turner founded the Pedal Group, as a joint venture between the Turner family and Flight Centre in 2008. <\/p>\n
Turner\u2019s father, Graham Turner, had similarly opened the first Flight Centre store in Sydney in March 1982. He opened one in Melbourne a month later, and another in Brisbane just two months after that, and by the end of the year, he had nine shops employing 50 people.<\/p>\n
Pedal Group owns two separate businesses in the bicycle industry, 99 Bikes, a direct-to-consumer (DTC) retail operation, and Advance Traders, a bicycle wholesale business that the group acquired in July 2008.<\/p>\n
\u201cAt the time, I was CFO of Flight Centre Travel Group\u2019s Queensland operations and saw a \u2018start-up\u2019 operational business opportunity that combined a personal passion for riding, with a new career pathway. I started as general manager of Advance Traders in October 2008,\u201d Garnsworthy added.<\/p>\n
Tailored customer-centric omnichannel approach<\/h3>\n
With a paid membership program, Club 99, that boasts over 1.6 million members, Garnsworthy said that delivering \u201ca great customer experience is critical for us. We want to be known as the world\u2019s most approachable bike shop\u201d.<\/p>\n
Club 99 is $5 for a lifetime membership and gives customers a hoard of benefits that range from annual gift vouchers, member discounts and access to 99 Bikes classes.<\/p>\n
Customer loyalty is crucial in retail and 99 Bikes\u2019 approach to driving repeat purchases involves constantly listening to customer feedback via reviews and surveys, which it then delivers to stores every week to inform the level of service that employees should provide. <\/p>\n
Complimentary test rides, extensive product testing and bespoke bikes are all part of the business\u2019 elevated customer experience. \u201cWe measure all our customers\u2019 height and inseam to ensure we\u2019re putting them on the right size bike,\u201d said Garnsworthy.<\/p>\n
\u201cOur bikes are built by trained mechanics and safety checked three times before [they] leave the store,\u201d he added.<\/p>\n
The retailer also has a policy of contacting customers who provide negative feedback and turning their bad experience into a positive one.<\/p>\n
\u201cOur website is extremely important to us and is usually the first interaction a customer has with our brand. We think of it as an extension of our store network,\u201d Garnsworthy added.<\/p>\n
Bricks-and-mortar retail big business<\/h3>\n
99 Bikes currently operates 62 stores in Australia and New Zealand, seven in the US and four in the UK. Australia is the strongest market for the business. Of the retailer\u2019s Australian total sales, 90 per cent occur through bricks-and-mortar stores, and the remaining 10 per cent comes from online, Garnsworthy told Inside Retail<\/em>. <\/p>\n \u201cOur store network is the most important and where we can deliver the best customer experience. We take great pride in getting to know our customers and making sure that we\u2019re recommending the perfect bike for them,\u201d Garnsworthy said.<\/p>\n Prior to Covid, on average, the business opened five new stores annually, however, investment in retail was halted during the lockdowns, and whilst business in Australia is on the upward trend, in New Zealand and the UK, the company is in a consolidation phase.<\/p>\n This year, the group has closed three stores in New Zealand and in the highly competitive UK market, two closures are planned.<\/p>\n In Australia in contrast, two new openings are planned in Pimpama, Queensland, and Perth by 2025. Garnsworthy believes that 99 Bikes will return to opening five to six stores annually in the future.<\/p>\n When opening a new store Garnsworthy said the retailer is looking for areas with catchments of 120,000 people and certain key demographic statistics. Having a \u201c15 min[ute] drive time between stores, great main road exposure and signage, car parking and a floor space of 350sqm\u201d are also important, Garnsworthy said.<\/p>\n As of this month, all Pedal Group operations are now B Corp certified, an achievement that Garnsworthy believes will hold the group accountable to higher environmental, social, and governance (ESG) performance standards.<\/p>\n The process included an extensive two-year review across 99 Bikes and Advance Traders in Australia and New Zealand. As a result, the company’s constitution was changed to include all stakeholders in the decision-making processes, and a supplier code of conduct was created.<\/p>\n Some of the other changes the business has made to achieve B Corp status include recycling soft plastics, tyres and tubes. Other initiatives, the business has had in place for many years, \u201clike solar panels in our 99 Bikes stores and our employee Earning to Give initiatives where employees can donate the equivalent of one per cent of their wage to a charity of their choice,\u201d Garnsworthy said.<\/p>\n To achieve B Corp certification, businesses must score above 80 on their impact assessment. The company achieved an 82.6, well above the median score of 50.9. <\/p>\n \u201cB Corporations globally are industry leaders that use business as a force for good,\u201d he added.<\/p>\n The post How 99 Bikes plans to return to profit with an electric-powered push appeared first on Inside Retail Australia.<\/p>\nBusy B Corp bees<\/h3>\n