Raleigh suffers £30 million loss in 2023 despite sales increasing by 3.5%, with “material uncertainty” potentially casting “significant doubt” over business – but directors claim iconic British brand is in “strong position”

British bicycle manufacturer Raleigh Bikes recorded a loss of £30.1 million before taxes in 2023, with an independent audit claiming that a “material uncertainty may cast significant doubt on the company’s ability to continue as a going concern”.

The loss, shown in newly filed accounts at Companies House, comes despite the company managing to halt a sustained decline in sales, which saw an increase of 3.5 per cent from 2022. The company directors claimed that the strategic changes had left it in a “strong position when the market returns to a more normal and stable state”.

The company’s turnover also increased, rising from £55.7 million to £57.7 million during this period — but still some way from the 2020 figures when it recorded a turnover of £74.4 million.

However, this means that the iconic bike company founded in 1885 has failed to record a profit for a second year running, having previously posted a loss of £6.8 million in 2022.

> Brighter days ahead for bike industry? Raleigh owner reports inventory levels back to normal

An independent audit by KPMG into the company’s finances has also revealed that Raleigh is significantly dependent on its parent company Accell Group for cash flow and liquidity security.

The report stated: “The company's ability to continue as a going concern is dependent on non-withdrawal of existing funding and additional financial support being made available by its parent, Accell Group BV. The ability of Accell Group BV to provide this support is dependent on the successful and timely completion of the recapitalisation and the timing and extent of market recovery, and in case of liquidity shortfall, its ability to obtain and agree to any additional super senior debt financing required.”

It added that these events and conditions “constitute a material uncertainty that may cast significant doubt on the company's ability to continue as a going concern”.

Raleigh Chopper 70's

A statement signed off by the board said: “The directors anticipate that the market place will continue to be very competitive during the coming year. Raleigh retains a solid competitive position with considerable brand strength, an independent bicycle dealer network and a strong presence on the High Street.

“The uplift in the market driven by COVID has seen some contraction and volumes have returned to pre-COVID levels as a result this has left the market in an overstocked position and we have experienced price pressures in the market place. As a result a full business review was performed at the end of 2023 and the business was right sized and strategic changes to the business structure and product offering were made to protect the business. These changes have left the company in a strong position when the market returns to a more normal and stable state.”

> Raleigh relocates to historic Nottinghamshire site as iconic British brand promises “ambitious plans” for future growth, months after job cuts and move away from previous headquarters

Meanwhile, the Dutch company Accell Group, which owns bike brands such as Raleigh, Winora, Sparta, Lapierre and Ghost, suffered a loss of €390 million (£325 million), after posting a €27 million profit in 2022. Its net sales in 2023 were €1,294 million, down 10.1 per cent compared with €1,439 million in 2022.

The Accell Group 2023 Annual Report added that the “impact of lower volumes sold was partly offset by pricing and product-mix”, resulting in a “positive variance on average selling price versus the prior year”.

Last week, Accell Group’s CEO Tjeerd Jegen said that the company is “well on track” to recovery. “2024 was a challenging year for both the bike industry and Accell,” he said. “However, we’ve normalised stock levels, made significant progress with our recapitalisation and are proud to see one of the key Accell brands, Lapierre, return to the UCI World Tour. As we look ahead, we are well positioned to benefit from the favourable macro trends and continue building on this momentum in the new year.

“All brands now benefit from joint stock management, and the stock levels of finished bikes, which peaked at the end of 2023, have now been brought back to normalised pre-Covid levels. The majority of the stock now consists of models produced in the past year. The inventory of parts and accessories had been brought back to normalised levels earlier in the year. We see sales to customers in our key markets increasing again.”

In August last year, the formerly Nottinghamshire-headquartered Raleigh was reported to be in a tight spot, after a warning notice from Companies House over late financial accounts which, if unaddressed, could have seen the British bike manufacturer struck off the register. However, the uncertainty was soon eased after the compulsory strike-off action was discontinued. 

In November 2023, it announced a series of job cuts and major restructuring plans, which include completely shutting down its Parts and Accessories department and contracting out its warehousing and logistics to a third party, with the company saying that the move is reflecting a “challenging market”.

> Raleigh Chopper now available in 70s-inspired colourways

Then in February last year, Accell Group once again announced that it was going to “simplify operations and enhance efficiency” by merging facilities and cutting up to 150 jobs.

Accell, which itself is owned by a consortium headed by global investment firm KKR, also had its credit rating downgraded for the fourth time in a year in June 2024, with the news coming around the same time that the group’s cargo bike company Babboe was criticised for a “shambles” recall of defective frames that the company allegedly had known about.