Big Bike Chains Now the Big Wheels : Mom-and-Pop Stores Face a Tough Hill

You could call it Bicycle Depot.

Hundreds of mountain bikes yet to see their first dirt road are suspended above chrome-bedecked replicas of vintage Schwinns, children’s tricycles and ultralight graphite frames at Jax Bicycle Center, a Fullerton store the size of a warehouse.

Jax and dozens of other bicycle shops across the country have taken a lesson from specialty chains. To compete with sporting goods stores and major retailers, they’ve built themselves into airy superstore chains that can cut costs by selling in volume.

Odds are the mom-and-pop operation where your parents purchased your first bicycle is out of business, struggling--or a lot bigger. In earlier days, bicycles were kids’ stuff. But sales to adults exploded in the 1980s and got another boost when mountain bikes caught on in the ‘90s.

Tapping that market, a handful of chains have sprung up in Southern California, and one of the two national bicycle chains has expanded here.

The local bicycle shop has had to adapt as major retailers such as Wal-Mart, Toys R Us and Kmart, as well as general sporting goods stores, began taking a bigger piece of bicycle sales.

Last year, American consumers bought 12 million bicycles, according to the Bicycle Wholesaler Distributors of America. Only 3 million of those were purchased from independent dealers, including the chains.

The bicycle supershops have flourished by striking a balance between what the mom-and-pops traditionally offer--generally higher-quality products and better customer service--and the lower prices of the big retailers. And they do that while providing a wider selection of products.

Jack Salem opened his first Jax in Long Beach in 1971. Since then, he has opened stores in Fullerton, Huntington Beach and Irvine, bringing the company’s sales to $7.5 million last year.

The same year Jax debuted, Alan Goldsmith opened a small shop on Wilshire Boulevard. His chain, now called Supergo, operates in Santa Monica and Fountain Valley and had sales last year of more than $8 million. The 17,000-square-foot Fountain Valley shop is the largest bicycle store in Southern California.

Chains such as Jax and Supergo are able to market with a greater level of sophistication than the small shops, providing catalogs for their customers and discounting their merchandise, said Fred Clements, executive director of the National Bicycle Dealers Assn.

“We’re seeing more professional operations which are well-run and well-managed,” he said.

The chains also provide service and trained mechanics to their customers--the hallmarks of the small neighborhood bike shop.

“We do an awful lot of goodwill,” added Troy Salem, Jax general manager. “People come in and they’ve obviously abused their bike, and we’ll say OK, we’ll give you a new one.”

The 35 stores and mail-order business operated by Performance, a North Carolina-based chain with several superstores in Southern California, generated $80 million in sales last year.

The company began in 1982 selling components and apparel by mail order and took off as the sport caught on with adults. Performance opened its first retail stores in 1986, parlaying its name recognition into a chain featuring its catalog products. Such a large-scale bicycle retail operation had never existed before.

“We just saw an opportunity that no one else had taken advantage of,” said founder and Chief Executive Garry Snook. “Every other type of retailing was nationally chained except this one.”

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Most of their bicycle sales are in the mid-price range, anywhere from $400 to $800, said Sam Houston, Brea Performance store manager, although they do carry top-of-the-line bicycles that cost as much as $3,500.

The largest national chain is Bike Line, whose 76 stores reported $30 million in sales last year. The company, now based primarily on the East Coast, plans to more than double in size over the next three years, said Jim Palmer, director of franchising.

Caught between these chains and major retailers, many small bicycle shops are struggling. An estimated 150 bicycle shops closed their doors last year, and more than 1,000 were sold to new owners, Clements said.

Although some small shops have adapted to the competition by specializing in high-end bicycles or finding other niches, chains are carving away a growing share of their business.

“We have a fair amount of turnover,” Clements said. “It’s a sorry picture out there because it’s not very profitable. If you’re in this business, you’re in it because you love cycling.”

One who decided to bail after 25 years in the business was Mike Guerrero, former owner of Covina Valley Schwinn.

Without the buying power of a Performance or a Sport Chalet, the top lines were difficult to obtain, Guerrero said, and he ended up taking the less popular brands.

“There aren’t as many of those neighborhood stores anymore,” Guerrero lamented. “The small mom-and-pop can’t compete.”