Up there with acquiring a puppy, buying a bike for lockdown was one of the Pandemic retail booms. Not any longer. Tandem, the Birmingham-based Aim minnow behind grand old names of British cycling such as Dawes and Falcon, has warned that shops are sitting on unsold bikes and that it is struggling to source cycles from abroad.
Yesterday’s warning of a year-on-year 43 per cent shortfall in sales in recent weeks sent shares in the company to an 18-month low, down 95p, or 19 per cent, at 405p, further reversing much of the gains the stock had made as a pandemic winner. A year ago the shares were trading at 625p. After yesterday’s back-pedalling by investors, the company is worth £21 million.
The group, which also distributes toys and leisure and garden goods, said that its order book had collapsed after cancellations and a reduction in the level of orders coming in, from £27 million a year ago to £16 million. It also reported that it had been hit by the growing appeal of e-scooters and electric bikes.
Tandem’s latest trading update two months ago spoke only of a slow start to the year. Sales of electric scooters and bikes, meanwhile, were up 56 per cent to £9.9 million in 2021.
In an update to go with its 2021 full-year results — in which Tandem reported group pre-tax profits up 17 per cent at £4.7 million on revenues 10 per cent higher at £40 million — the company warned that it was being hurt by “significant global uncertainty and prevailing economic conditions” and “inflationary pressures, particularly from food, fuel and energy and increasing interest rates, having an impact on consumer discretionary spending”.
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It added: “Early signs from independent bike dealers are that many have surplus stocks and consumer demand in our bicycle division has been slow.”
Tandem acquired its bicycle brands before the turn of the century. It was floated on London’s secondary stock market in 2000. Dawes began in Birmingham in 1906, not long after the explosion in popularity of bicycling in Britain. It also made bikes for the armed services. Falcon was founded in Coventry in the 1880s, became a big brand in the 1930s and in the 1970s had a licensing agreement with Eddy Merckx, the five-time Tour de France winner.
