Brompton Bicycles have seen their 2024 profits nosedive by over 99 per cent to just over £4k as the biking industry becomes embroiled in a post-pandemic spiral.
Profits at the Middlesex-based firm fell from £10.7 million in to just £4,602 in the year to the end of March 2024, a paltry sum which would not even allow you to purchase their top line models.
The profit plunge has been induced by the industry’s Covid boom, according to experts. During the pandemic, bike makers struggled to meet demand as people sought alternative outdoor methods of keeping fit.
This exponential growth in demand resulted in manufacturers such as Brompton incorrectly estimating stock requirements and left the bike market awash with heavily discounted options for consumers in the pandemics’s aftermath.
For Brompton, whose cheapest model begins at roughly £1,000, sales fell 5.3 per cent whilst the company sold 8.2 per cent fewer bikes in the year to the end of 2024.
The worrying sales figures are not just confined to Brompton though, with bike manufacturers across the US and Europe struggling to recoup their investments on their inventory overestimations.
Some manufacturers have collapsed altogether and entered into administration as a result of this prolonged period of poor sales. These include the likes of online retailer Wiggle and UK firms Merican, Orange Mountain Bikes and P Bairstow.
Despite the ostensible turmoil engulfing the biking industry, Brompton’s Managing Director, Will Butler-Adams, remains hopeful that brands can overcome what he has called ‘a really sad state of affairs’.
Brompton Bicycles have announced that their 2024 profits have nosedived by over 99 per cent to just over £4k as the biking industry becomes gripped in a post-pandemic spiral
Manufacturers such as Brompton has suffered from overestimating on stock requirements
Admitting that sales are unlikely to rise sharply in just one year, Butler-Adams told the Guardian that he predicts 2025 will see a recovery of sorts in the bicycle market.
Growing usage of electric bike rental schemes such as Lime and Forest, alongside the introduction of cheaper Chinese alternatives on the market, will likely elongate this recovery process though.
As a result of the dwindling profits, Brompton has now placed their planned relocation to a new headquarters in Kent on hold and cancelled the payment of dividends to shareholders.
In an effort to pay off debts, the company also sold off an 8.5 per cent stake in the business in early 2024 to a fund set up by multiple high street banks such as Barclays, HSBC and Lloyds.
The hope at Brompton is that the firm’s more commuter-friendly biking options will help claw them out of their financial hole as consumers look for ‘more utilitarian’ options.
If the company can stay the course and ride out the current lull in sales, Butler-Adams believes that the bicycle market still holds huge potential in the long-term as the world’s major cities continue to implement more biking-conscious policies.
‘London, Edinburgh, New York, Seville, Paris all have the momentum of getting people more active for air quality and trying to get people fitter. In the macro picture things are going in the right direction. The industry shot itself in the foot but that will roll out’, Butler-Adams stated.
The Brompton Managing Director also added that the launch of the manufacturer’s new G-Line model would help steer sales in the right direction in the short to medium-term.