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Ribble reportedly being prepared for sale by private equity owners

Lancashire company saw turnover nearly double in its latest financial year

Ribble, which celebrates is 125th anniversary next year, is reportedly being prepared for sale by its owners.

Sky News reports that private equity firm True Capital has hired investment banking firm Stifel to look for buyers for Cyclesport North Limited, which owns the brand.

True Capital took control of Ribble in 2015 and since then has installed a new management team and launched a new brand identity and website and expanded the company’s range to include clothing.

> Ribble Cycles bought by True Capital investment firm

The company has also raised its international profile through new websites for Germany and Australia, and has opened its first-ever standalone stores – at Bluewater in Kent, the Mailbox in Birmingham, the Victoria Centre in Nottingham and Clitheroe, Lancashire.

In its latest accounts, covering the year to 1 November 2020, Cyclesport North Limited saw turnover rise by 92.5 per cent to reach £18.3 million.

Gross profit was £5.9 million, although the company, which now employs more than 100 staff as a result of its expansion, made an operating loss of £0.08 million.

Growth was said to be due to raising awareness of the Ribble range primarily through digital marketing channels.

Just last month, the Preston-based company launched its flagship Ultra road bike, designed with the aim of being “the fastest aero road bike in the real world.”

> Ribble launch radical new Ultra aero road bike (+ video)

Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.

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21 comments

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SimoninSpalding | 2 years ago
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I have mixed feelings about Ribble. Before the takeover it was a great site to get random low value parts to keep older components running. After the takeover they reinvented themselves with presumably much more profitable business which probably saved the company but I don't use them anymore.

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ktache | 2 years ago
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Isn't £0.08million loss a very strange way of saying a loss of £80,000 , or 80 grand?

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mdavidford replied to ktache | 2 years ago
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Not really - it's taken from their statement of accounts, where it's usual to keep the presentation of numbers consistent, to help keep them readable and comparable. Since the majority of the numbers are in the order of £millions, it makes sense to use that throughout. It's only reading it out of its original context that makes it look odd.

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Steve K | 2 years ago
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I'm intrigued by this line "expanded the company’s range to include clothing" as there isn't any clothing offer on their website at the moment and, indeed, hardly anything other than bikes.  I have a £50 voucher burning a hole in my pocket (a goodwill gesture because of delays to my bike) and I literally can't find anything to spend it on.

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aegisdesign replied to Steve K | 2 years ago
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They did that a few years ago (2017) and then stopped after a year. It looked sort of average but if you didn't own a Ribble it was maybe out of place?

https://road.cc/content/tech-news/225975-ribble-launch-new-clothing-range

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Steve K replied to aegisdesign | 2 years ago
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Ta. They certainly used to do a much bigger range of stuff generally. When I bought my bike I realised I already had an account having bought panniers back in 2016. Now it just seems to be specific spares for their bikes, some cheap lights and locks and a few random things from Restrap.

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Rendel Harris | 2 years ago
11 likes

...but whoever buys it will have to wait until June 2022 for it actually to become their property...

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Freddy56 | 2 years ago
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Double turnover but made a loss. I just don't understand big business. Are the owners getting rid of it because in the bussiest year ever for the cycle trade with  lockdown and they didn't make a profit?

"Ribble range primarily through digital marketing channels"

yet I didnt see any adverts and I'm the target market. 

Did anyone see a ribble advert?

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Tinbob49 replied to Freddy56 | 2 years ago
2 likes

I saw plenty of adverts, but I'm not their target market because I bought a fairlight this year so not buying anymore bicycles for a long time.

Big business isn't just about profits, and there will be an awful lot of cost rises to fund their expansion, with the idea presumably to make the business bigger and then gain bigger profits when the one off costs (I.e. opening a store) don't recur. 
 

invesment firms often take a 3-5 year horizon and effectively buy in and then get it ready for sale later so doubling the size will make it more valuable, despite lack of profitability.

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Secret_squirrel replied to Freddy56 | 2 years ago
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Freddy56 wrote:

Double turnover but made a loss.

Only on net profit.  Gross profit was ~6m which isnt bad on 18m turn over.  (30% gross profit margin).  The literal million dollar question is what took 6m of gross profit down to less than zero, was it just business as usual items or any UXB's or massive debt servicing and the like.

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kil0ran replied to Secret_squirrel | 2 years ago
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Staff costs up a £1m as were distribution costs. Carrying almost £6m in stock. Don't see about capital investment and not much R&D. Should smash the doors in this FY.

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brooksby replied to Freddy56 | 2 years ago
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Don't these private equity vampires load up companies with all sorts of debt, which then gets repaid out to other companies owned by them so that on paper its making a loss.  Asset stripping, by any other name?

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Secret_squirrel replied to brooksby | 2 years ago
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Thats one model yes.  Bearing in mind debt servicing itself isnt a bad thing - its the purpose for which the debt was acquired.  90% for purchase price and 10% inward investment wouldnt be great.  50/50 however might be reasonable if the company involved had no other investment sources.

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Tom_77 replied to Freddy56 | 2 years ago
1 like

Freddy56 wrote:

Double turnover but made a loss. I just don't understand big business. Are the owners getting rid of it because in the bussiest year ever for the cycle trade with  lockdown and they didn't make a profit?

"Ribble range primarily through digital marketing channels"

yet I didnt see any adverts and I'm the target market. 

Did anyone see a ribble advert?

I don't know if this was the case with Ribble, but it's pretty common for private equity firms to use debt to buy a company and then put that debt on the company's balance sheet (see here)*. So a company could be highly profitable and still make a loss by paying off debt.

I've seen plenty of Ribble adverts on Facebook, planning to order a Gravel bike as soon as I can get my Bike 2 Work paperwork sorted out.

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Morgoth985 replied to Tom_77 | 2 years ago
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That’s true, but debt servicing shouldn’t cause an operating loss as it would normally be below the OP line. The article says it’s down to the expansion which isn’t surprising, you incur a whole load of costs getting your new facilities up and running and it takes time for them to build up a customer base to make big sales.

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AlsoSomniloquism replied to Morgoth985 | 2 years ago
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Not sure if the costs would have been covered by Ribble or the shoping centre owners but the Birmingham Shop had to be moved to a whole different level due to the ground floor section being converted into short term office / meeting spaces. 

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AlsoSomniloquism replied to Tom_77 | 2 years ago
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From Ribble? Hopefully the Bike 2 Work repayments don't start until you actually recieve the kit otherwise you might have already paid it off before you actually ride it. 

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Steve K replied to AlsoSomniloquism | 2 years ago
1 like

AlsoSomniloquism wrote:

From Ribble? Hopefully the Bike 2 Work repayments don't start until you actually recieve the kit otherwise you might have already paid it off before you actually ride it. 

According to their website, the payback from your salary doesn't start until they deliver the bike.  (It's also the same for repayments from their interest free credit - I think it's only if you pay cash that you pay upfront.)

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AlsoSomniloquism replied to Steve K | 2 years ago
3 likes

The other worry is he might have had two different employers before he got the bike as well.

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Rik Mayals unde... replied to Tom_77 | 2 years ago
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Just bear in mind that if the bike develops a fault after you have taken delivery, even if you have only owned it for an hour, Ribble will not sort it out. They will merely tell you to take it to your local bike shop to be fixed. Once you take delivery of a Ribble bike, it seems they wash their hands of you.

 

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Steve K replied to Rik Mayals underpants | 2 years ago
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biker phil wrote:

Just bear in mind that if the bike develops a fault after you have taken delivery, even if you have only owned it for an hour, Ribble will not sort it out. They will merely tell you to take it to your local bike shop to be fixed. Once you take delivery of a Ribble bike, it seems they wash their hands of you.

 

Not actually my experience - there was a problem with one of the threads on the stem on my bike, and they sent me a replacement.  The bike also came with the wrong mudguards - they sent replacements and (and this is where the local bike shop might have come in) offered to recompense me the cost of my LBS fitting them (I did it myself so it didn't come to that).

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