The boss of Brompton Bicycle has predicted that 2025 will be another year of turmoil for the bike industry after profits at the British folding bicycle maker dived by more than 99% amid a wave of discounting by rivals.
Profits fell from £10.7m to £4,602 in the year to the end of March 2024 – less than the cost of Brompton’s top-of-the-range T Line Explore bike – as riders sought cheaper options during a cost of living squeeze.
Sales at the company based in Greenford, Middlesex – whose cheapest model costs almost £1,000 – fell 5.3% to £122.6m as it sold 8.2% fewer bikes, according to accounts filed at Companies House this week.
Will Butler-Adams, the managing director of Brompton, said the dive in profits was primarily down to selling fewer bikes than planned amid “a really sad state of affairs” in the global bicycle market. The sector is awash with overstocks after overestimating demand since the coronavirus pandemic.
“The industry is still in turmoil and will not get better this year. It will not be as bad as 2024 but there is still excess stock,” Bulter-Adams said.
Bike businesses across the world, but particularly in the US and Europe, have been hit by poor sales and discounting after a boom during Covid lockdowns prompted overoptimistic production, leading to excess stock in warehouses and stores.
A number of bicycle brands and retailers have collapsed into administration in the past two years, including the online retailers Wiggle and i-ride.co.uk, and the British bike makers Mercian, Orange Mountain Bikes and P Bairstow.
Butler-Adams said Brompton had been hit by widespread discounting by troubled businesses trying to clear stock, particularly in Europe and the US. The industry has also faced competition from electric rental bike schemes, such as Lime, and the rise of cheaper Chinese rivals and the British startup Gocycle.
He added that the “retail environment has been decimated” for UK bike sales with the closure of independent chains including Cycle Republic and Cycle Surgery, while even bigger players such as Evans have reduced in size.
Brompton has put plans to shift to a new headquarters in Ashford, Kent, on hold and cancelled the dividend to shareholders after paying out £1.2m a year before after profits dived. In early 2024, it also raised £16m from BGF, a fund set up by banks including Barclays, HSBC and Lloyds after the credit crunch that specialises in funding small- and medium-sized businesses, in return for an 8.5% stake in Brompton.
Brompton used the funds, with about £3m raised from existing shareholders including Butler-Adams and the founder, Andrew Ritchie, to pay off debts.
Despite the industry’s troubles, Butler-Adams said Brompton was protected by offering “more utilitarian” bicycles that people turned to for commuting. He remains optimistic about the industry’s long-term prospects as governments around the world recognise the importance of cycling for health and environmental reasons. Cities such as London, Manchester, Paris, Shenzhen, New York and Vancouver have been building infrastructure to encourage more cycling.
“London, Edinburgh, New York, Seville, Paris all have the momentum of getting people more active for air quality and trying to get people fitter. In the macro picture things are going in the right direction. The industry shot itself in the foot but that will roll out,” Butler-Adams said.
He said Brompton was positive about the launch of its more rugged G Line model, especially the electric version, saying there were “opportunities on the other side” for those bike businesses still able to invest during a tough period.
