$12.4 Million Loss, Three NZ Stores Closed & New Gold Coast Store – Mixed Fortunes for Pedal Group
Coomera, Queensland
Pedal Group will enjoy a moment of celebration in a generally tough year, when it opens a new store on the Gold Coast in the coming weeks.
Amid recent news about sizeable losses and a drop in valuation for the organisation, and speculation the organisation is about to close multiple Australian stores, Pedal Group chair Matt Turner and CEO Andrew Garnsworthy this week declared there are no plans shut any stores. In fact, 99 Bikes is preparing to open a new store in the northern Gold Coast suburb of Coomera.
“That’s been a target catchment for us for over five years, while we looked to find the right store location in that northern Gold Coast area,” Andrew revealed.
“We bought that building and developed the site about 18 months ago and it’s been a work in progress. It will open before Christmas.
“It’s previously been a gap where we haven’t had any representation, a 50km territory between Springwood, about 20km south of Brisbane city, and Ashmore, 5km north of Southport.”
Coomera will become the third Gold Coast store for 99 Bikes, amid a coast zone of South Eastern Queensland and northern NSW that is constantly a leading performer for the company.
“They continually perform above the national average for us,” he said.
“Our original Sunshine Coast store at Kawana, at Burleigh on the Gold Coast, and Tweed Heads, just over the border in NSW, are regularly among our top five or six stores nationally.”
99 Bikes opened a second Sunshine Coast store, at Maroochydore, around 18 months ago.
Despite being only a 15-minute drive from the Kawana outlet, Maroochydore has been a strong performer since it opened.
Three NZ Closures
99 Bikes has closed three of its stores in New Zealand – in Rotarua, Wellington and the Auckland suburb of East Tamaki – which it attributed to the performance of those particular stores.
Andrew said the Rotarua and Wellington closures were in line with a strategy to focus on NZ’s two biggest populations, in keeping with the retailer’s Australian business model.
“Our stores work well when they’re part of a group of stores than can come together, to create some scale with marketing and the ability to have a pool of talent to move between stores as required,” he explained.
He said the relatively isolated locations of Rotarua and Wellington, around three and four hours from Auckland respectively, were a deviation from the company’s Australian operating model.
99 Bikes still has seven remaining stores in NZ, distributed through Auckland and Christchurch.
The Brisbane-based company first moved into NZ in mid-2020, when it bought five Bike Barn stores from Bikes International.
Andrew indicated there has been some shuffling of its 99 Bikes operations in Auckland and Christchurch, including closing East Tamaki and redeploying staff to some other stores to turn around their fortunes.
Search for New Parramatta Location
He said the organisation is continuing to look for a new site in Parramatta, after it closed its existing store in the western Sydney suburb three months ago.
“We’re keeping a close eye on opportunities to reestablish another store in that area,” he stated.
“Those relocations to a different landlord is business as usual for us. With a lot of our stores, we’ve been able to find better locations with better lease deals.”
$12.4 Million Loss
As 2023 continued a challenging period for the bicycle industry at large, figures released recently showed Pedal Group posted a $12.4 million loss for the 2023 financial year.
Andrew said: “The main driver of the loss for 2023 was the performance of the wholesale business, as a result of higher stock levels, higher costs associated with stock and lower margins.”
He said that financial result had a knock-on effect to the valuation of the company, which fell from an estimated $252 million in November 2022 to $127 million last month, based on a planned issue of equity to staff.
However, Pedal Group’s valuation remains above its December 2020 levels.
Andrew said those valuations were a short-term concern and both he and Matt declares sales figures have been strong for the first four months of the new financial year.
Matt stated wholesalers with high stock levels had been hit hardest by the industry downturn.
“Which has been us – hopefully (we’ve) turned the corner now,” he added.