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Shimano and SRAM report sales downturn for first quarter of 2016

Shimano bike sales down 20% and SRAM sales are down 10% for the first quarter of 2016

It’s been a slow start to 2016 for Shimano and SRAM. Shimano reports that net sales were down 16% across the business in the first quarter, while SRAM has experienced “soft sales” over the last 12 months with a 10% drop in sales in the first quarter. As a result, SRAM is laying off 40 employees across its European, US and Asian operations. 

Bicycle Retailer reports that while the entire Shimano business sales (which includes fishing) were down 16%, the bike sales were actually nearer 20% down in the first quarter, from 81,940 million yen last year to 65,282 million yen this year. 

Shimano is blaming high inventory levels and the economy in the US, slow sales in other markets and even cites European terrorism as a cause of this decline.

"Both Europe and North America had a mild winter and retail sales in the first quarter of fiscal year 2016 were buoyant. Distributor inventories of bicycles in Europe remained at an appropriate level. In North America, distributor inventories, which have been accumulating relatively high, are likely to adjust to appropriate levels within the first half of fiscal year 2016,” says Shimano.

"In China, where growth in retail sales of sports bicycles slowed in the previous year, distributor inventories remained high, but adjustment to an appropriate level is gradually underway. As regards other emerging markets, whereas retail sales in Southeast Asia remained robust, those in South America were lackluster because of the economic slowdown and weak currencies.

"In the Japanese market, although sales of sports bicycles maintained more or less the same level, distributor inventories were somewhat high. Retail sales of community bicycles remained weak, affected by the impact of price increases resulting from the depreciation of the yen since 2015."

SRAM Red eTap - shifter.jpg

At SRAM, sales were down 10% in the first quarter of 2016 and this has forced the company into drastic action, laying off 40 employees around the world, effective 26th April. SRAM employs 3,500 people with 450 in the US. 

"The quarters before were soft as well. It's been cumulative. Certainly the softness of the last 12 months has not helped. It's definitely lowered the water level and exposed the rocks,” said SRAM president Stan Day.

SRAM says the layoffs won’t impact its delivery of new products which include the new eTap groupset and its new Eagle 1x12 mountain bike groupset, which bagged a world cup win at the weekend thanks to Nino Schurter. 

Despite the drop in sales, SRAM remains buoyant about the future forecast. "We saw strong spec growth with OEMs during last year. The problem was total volume for OEMs was down. We expect to go out next year with good spec growth. eTap is doing well. Eagle is doing well. We're strong in suspension, and we like what we see with Zipp. There's lots to be optimistic about going forward. We're confident in that. We're just adjusting through this softness right now,” added Stan Day.

Source: Bicycle Retailer 

David worked on the road.cc tech team from 2012-2020. Previously he was editor of Bikemagic.com and before that staff writer at RCUK. He's a seasoned cyclist of all disciplines, from road to mountain biking, touring to cyclo-cross, he only wishes he had time to ride them all. He's mildly competitive, though he'll never admit it, and is a frequent road racer but is too lazy to do really well. He currently resides in the Cotswolds, and you can now find him over on his own YouTube channel David Arthur - Just Ride Bikes

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7 comments

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Rapha Nadal | 7 years ago
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I'm amazed that a "mild winter" had any affect at all on Shimano's sales!  What a bizarre reason to give.  Too warm to buy Dura Ace was it?

Avatar
joules1975 replied to Rapha Nadal | 7 years ago
1 like

Rapha Nadal wrote:

I'm amazed that a "mild winter" had any affect at all on Shimano's sales!  What a bizarre reason to give.  Too warm to buy Dura Ace was it?

I think you need to read it again. There is no blame placed on mild winter for poor sales. They state that sales in Europe and States were boyant due to the mild winter.

Avatar
Rapha Nadal replied to joules1975 | 7 years ago
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joules1975 wrote:

Rapha Nadal wrote:

I'm amazed that a "mild winter" had any affect at all on Shimano's sales!  What a bizarre reason to give.  Too warm to buy Dura Ace was it?

I think you need to read it again. There is no blame placed on mild winter for poor sales. They state that sales in Europe and States were boyant due to the mild winter.

I'm not saying it did though.  I'm merely pointing out that it's strange that a mild weather would affect sales - good or bad. 

 

Avatar
The Family Cyclist | 7 years ago
2 likes

Hope all the hipsters on there fixies/ss bikes read this. More gears means more people employed simple! (or maybe not really)

Avatar
fustuarium | 7 years ago
2 likes

"Certainly the softness of the last 12 months has not helped. It's definitely lowered the water level and exposed the rocks,” WHAT lol?? Talking about bouyant sales etc seems to have taken in a whole new lexicon for the Captain of the good ship SRAM.

Avatar
danthomascyclist replied to fustuarium | 7 years ago
4 likes

fustuarium wrote:

"Certainly the softness of the last 12 months has not helped. It's definitely lowered the water level and exposed the rocks,” WHAT lol?? Talking about bouyant sales etc seems to have taken in a whole new lexicon for the Captain of the good ship SRAM.

 

Isn't it just a crock of shit? Allow me to translate:

 

"Our sales were shit but we were cocky with our spending and now our redundant staff are paying the price"

Avatar
themartincox replied to fustuarium | 7 years ago
0 likes

fustuarium wrote:

"Certainly the softness of the last 12 months has not helped. It's definitely lowered the water level and exposed the rocks,”

 

this is standard business talk for a firm operating Just In Time (JIT) manufacturing, it's a good way to keep costs low as it means only making what is needed and when, if suppliers have ordered too much however then it can expose challenges in the supply chain

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