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When it comes to Australian bicycle industry importers and wholesalers, Lusty Industries is a relatively new kid on the block.
But perceptions can be misleading. It’s already about 17 years since Johnny McLean and his partner Helen started a home based business from scratch. Now, after a decade in their most recent premises, Lusty is moving into a new headquarters with not only triple the volume, but way more style.
Lusty’s scale might also surprise you. They currently have 34 team members and their new premises covers 4,000 square metres. Although their roots are in dirt bikes, this now accounts for only 40% of their business, with the other 60% being bicycle related.
Within bicycles, they started in MTB but have now expanded to cover most other bike sectors. Lusty imports Santa Cruz bicycles, plus a wide range of P&A brands, with two of the biggest being Maxxis and Troy Lee Designs.
“The idea for starting a business came in 2003,” Johnny recalled. “It became a proper business around 2005 or 2006. Helen, my fiancé, was at uni and I was living on campus when I imported a little clothing brand. We were doing the website at night and she would send the product during the day.
“From there it moved into a friend’s garage, until we’d used all of the double garage, then it moved into a small warehouse. I took a big gamble on bicycles, which helped us.”
We visited Lusty’s new premises just one week before they were planning to move in. Some of their office team were already camped in some bare office space surrounded by several teams of tradespeople who were making a racket with power tools and hammering.
Johnny McLean has never been afraid to do things differently. For starters, they’re the only major national wholesaler based in Newcastle, NSW’s second largest city, about two hours north of Sydney.
Then there’s the premises itself. Not out in a bland, modern light industrial precinct, but right in the heart of the old Port of Newcastle, surrounded by cargo ship berths and the rapidly renewing historic residential suburb of Carrington.
But most different of all is the fitout and style that Johnny and Helen are injecting into a vast old heavy industrial engineering workshop. This fitout is closely reflecting their core values that include team, family, sustainability and hospitality, whilst at the same time enabling the latest technologies that will help them give the best possible customer service.
If they walk in from the warehouse entrance, the first thing visitors will notice is eight 40 foot shipping containers, divided into two sets of four by a wide central staircase.
There’s nothing unusual about shipping containers, especially in a port, but these ones have floor to ceiling glass windows at each end and their side walls cut out to make two open plan office areas. And they’re suspended by chains from huge gantry cranes that are a legacy from the building’s previous life.
“These were old, beat up containers that we retrofitted,” Johnny explained. “Because the building is leased, this office (referring to one set of four containers) was actually our office in the old place for the past 10 years. It was held together with six bolts. We disassembled it and brought it across. Then we mirror imaged it with four more.
“If it was built in the traditional way, we would have had to dismantle it and throw it away. This way we can just re-use and re-use. It’s like one big Lego Technics set.”
Recycling of as much material as possible extends to the extensive complex of rooms beneath the containers, which are lined with plywood.
“All of the plywood is second hand that we found out of a mill in Victoria,” said Johnny. “It’s not usually used in this manner, but we recycled it all. The same with the insulation. It’s seconds that we found through local contacts. There’s lots of glass and recycled materials. It’s also low power – we did a power study to make sure we’re using the least amount of power possible.”
At the time of our visit, less than half of the warehouse racking had been installed. “I wanted to use recycled, but we couldn’t get enough volume,” Johnny lamented.
Team, Dealer and Family Friendly
Johnny wanted their new premises to be a great environment for their team to work and well set up for host visiting dealers, sponsored athletes and all other guests, whether for product launches and parties, or just one on one visits to pick up stock or any other purpose. Those concepts are quite common, but he also wanted a great place for kids to play and hang out.
“Half of us have got kids, so we wanted somewhere they could hang out during school holidays, and everyone wants to let off steam on a Friday afternoon,” he explained.
With this in mind, they’re installing a half-court basketball court and a pump track, inside the warehouse, immediately in front of the office area with a mesh fence to keep it safe and separate from the warehouse trucks, forklifts and other activity.
Facing this area, behind a glass wall, will be a kids’ chillout area with television, and various games being installed. Just around the corner from this will be a fully equipped open plan kitchen and café area. This will flow into a north facing glass atrium with big pushout windows that open to the breeze and allow in natural light.
But it’s not all play. Downstairs will also include a board room, showroom, computer server room, bike workshop and a fully equipped photo studio.
Lusty have a professional photographer within their team and pumping out unique content online is a core part of their marketing strategy.
Upstairs the amenities will continue with glass wall opening onto a deck overlooking the port and city skyline.
“We started as a small business and we don’t ever want to lose that family vibe.”
“It’s important that our teams can always see each other. It’s not ‘us and them’. The warehouse team can always see the operations and sales teams,” Johnny explained. “I’ve spent a fortune, but I’m pretty stoked!”
Better Customer Service Through Technology
All of this fitout might sound a little excessive, but as every bike business owner knows these days, it’s very challenging to recruit and retain the best people, so having a nice working environment is also a good business investment.
Lusty Industries is also investing heavily in technology.
“I invest a crazy amount into areas like our BtoB website ordering system,” continued Johnny. “All of our customers are so busy. Covid has stretched everybody to the limit, so if you’re easy to work with and you’ve got easy systems to support it… you’ve constantly got to evolve. You’ve got to stay nimble.
“Then there’s an Advanced Warehouse Management System – that’s an automated warehouse system going in over the next six months to make us ready for the future,” Johnny revealed.
“Our new Operations Manager, Rob, has managed a logistics business of $300 million turnover, 250 staff with a fully automated warehouse system. And my background is electrical engineering and automation, so it’s not scary for me.”
Rob is part of a senior management team that Johnny has been systematically building.
“In the past six months I’ve realised I can’t do it all myself and we’ve created a leadership team,” he explained.
Another member of that team is Johnny’s former bank manager of many years’ standing, Shaun, who has left the Commonwealth Bank to become Lusty’s Chief Financial Officer.
“Shaun fell in love with mountain biking during covid,” Johnny said. “Once he and his wife got their heads around the price of new Santa Cruz bikes, they were hooked!”
Having one foot in the dirt motorcycle category and the other in bicycles, Johnny is in a unique position to notice how the two are starting to converge.
“Through the e-category – specifically e-mountain, the gap between moto and bicycle is getting closer,” he said.
“Major motorcycle brands like your KTM group – those major brands have e-mountain bikes as well as e-dirt bikes.
“We have to go down that space. We have to be either in front of it or left behind. It’s a discussion we have all the time.”
A Little Time for Reflection
Our tour concluded with a visit to Lusty’s previous warehouse of 10 years, which was in its final week of operations before a big weekend move to the new premises.
“We are full as full!” Johnny observed. “There’s never a good time to move!”
“When we moved in here 10 years ago there was no way in the world I thought we’d ever fill this, but we did.”
In fact, thanks to covid-induced supply shortages, Lusty were able to squeeze out another couple of years in the old warehouse, despite a huge growth in sales.
“There were a lot of benefits coming out of covid for everyone in the bicycle industry,” Johnny considered. “Now everyone just has to be careful with the overstock situation as the market normalises, which it has. But there’s more bums on bike seats so we should all win out the back of it.”
“We’ve got a great team. It’s all about the team,” he concluded.
Lusty’s new HQ should be largely set up by the end of winter 2022. At some time after that they’re planning to have an opening party. That would be one invitation that if you receive you should not pass up!