Did the BMX kill Raleighs Nottingham factory ?

A bike shop owner informed me that one of the reasons why Raleigh closed down its factory in
Nottingham is because of a severe decline in the sale of mountain bikes with 24 inch wheels which
was Raleighs primary money maker during the early and mid 1990s. The reason for the decline in the
24 inch wheel mountain bike sector is that kids these days want BMXs instead. In the 1990s profit
margins on kids bikes were very low due to foreign imports and Raleigh had difficulty in the adult
mountain bike sector because they were seen as not good enough compared to the high end makes and
too expensive for those who want an occasional or commuting bike. With the recent proliferation of
the BMX, the 24 inch mountain bike sector has been badly undercut to the point where the only models
which sell are those with suspension. Raleigh refuses to go into the BMX manufacturing sector
because their bosses and engineers have little understanding of BMX and its technologies.

Can anyone shed more light on whether this is really true or not. The bike shop used to be
heavily centred on raleigh childrens bikes but now mainly deals in BMX as that is where the
profit seems to be.

 

The Technical Manager wrote:
> A bike shop owner informed me that one of the reasons why Raleigh closed down its factory in
> Nottingham is because of a severe decline in the sale of mountain bikes with 24 inch wheels which
> was Raleighs primary money maker during the early and mid 1990s. The reason for the decline in the
> 24 inch wheel mountain bike sector is that kids these days want BMXs instead. In the 1990s profit
> margins on kids bikes were very low due to foreign imports and Raleigh had difficulty in the adult
> mountain bike sector because they were seen as not good enough compared to the high end makes and
> too expensive for those who want an occasional or commuting bike. With the recent proliferation of
> the BMX, the 24 inch mountain bike sector has been badly undercut to the point where the only
> models which sell are those with suspension. Raleigh refuses to go into the BMX manufacturing
> sector because their bosses and engineers have little understanding of BMX and its technologies.
>
> Can anyone shed more light on whether this is really true or not. The bike shop used to be
> heavily centred on raleigh childrens bikes but now mainly deals in BMX as that is where the
> profit seems to be.

BUllshit ... Most mountain bike wheels are 26" ...

--

Completed 1611 Seti work units in 12319 hours http://setiathome.ssl.berkeley.edu/

 

Complete rubbish.

The factory was closed because of high labour costs, and production moved abroad. Profit margins are
low on most bikes - profits are made from the accessories.

Regards,

---------------------------
Peter Connolly Derby UK

 

Good troll ...

 

"Peter Connolly" <[email protected]> wrote in message
news:<[email protected]>...
> Complete rubbish.
>
> The factory was closed because of high labour costs, and production moved abroad. Profit margins
> are low on most bikes - profits are made from the accessories.
>

Maybe the original poster was thinking of the mid-80s takeover by the Derby International group?
This came about due to a downturn in Raleigh's fortunes, caused in part by the BMX craze running out
of steam after they'd invested heavily in the "Burner" range. Things picked up not too long after,
mind, especially once they'd started to dabble in the ATB market; the recent closure was a different
kettle of fish, for the very reasons you state.

David E. Belcher

Dept. of Chemistry, University of York

 

BUllshit ... Most mountain bike wheels are 26" ...

Not on kids bikes they aren't. Read the original post.

THough, as others have pointed out, that post is wrong for other reasons.

Arthur

--
Arthur Clune http://www.clune.org Power is delightful. Absolute power is absolutely delightful -
Lord Lester

 

> The Technical Manager wrote:
> > A bike shop owner informed me that one of the reasons why Raleigh closed down its factory in
> > Nottingham is because of a severe decline in the sale of mountain bikes with 24 inch wheels
> > which was Raleighs primary money maker during the early and mid 1990s. The reason for the
> > decline in the 24 inch wheel mountain bike sector is that kids these days want BMXs instead. In
> > the 1990s profit margins on kids bikes were very low due to foreign imports and Raleigh had
> > difficulty in the adult mountain bike sector because they were seen as not good enough compared
> > to the high end makes and too expensive for those who want an occasional or commuting bike. With
> > the recent proliferation of the BMX, the 24 inch mountain bike sector has been badly undercut to
> > the point where the only models which sell are those with suspension. Raleigh refuses to go into
> > the BMX manufacturing sector because their bosses and engineers have little understanding of BMX
> > and its technologies.
> >
> > Can anyone shed more light on whether this is really true or not. The bike shop used to be
> > heavily centred on raleigh childrens bikes but now mainly deals in BMX as that is where the
> > profit seems to be.
>
> BUllshit ... Most mountain bike wheels are 26" ...

26 inch is the size of adult mountain bike wheels.

Its the decline in sales of the mountain bikes with 24 inch wheels for 9 to 14 year olds that the
bike shop owner commented about which claims has badly undercut the profitability of Raleigh.

 

Arthur Clune wrote:

>
>> BUllshit ... Most mountain bike wheels are 26" ...
>
> Not on kids bikes they aren't. Read the original post.

Did I say they were ? Read what I posted ..

> THough, as others have pointed out, that post is wrong for other reasons.

I figured the original post was wrong, and a troll post anyway .. so replied in kind ..

--

Completed 1611 Seti work units in 12319 hours http://setiathome.ssl.berkeley.edu/

 

The Technical Manager wrote:

> A bike shop owner informed me that one of the reasons why Raleigh closed down its factory in
> Nottingham is because of a severe decline in the sale of mountain bikes with 24 inch wheels which
> was Raleighs primary money maker during the early and mid 1990s. The reason for the decline in the
> 24 inch wheel mountain bike sector is that kids these days want BMXs instead. In the 1990s profit
> margins on kids bikes were very low due to foreign imports and Raleigh had difficulty in the adult
> mountain bike sector because they were seen as not good enough compared to the high end makes and
> too expensive for those who want an occasional or commuting bike. With the recent proliferation of
> the BMX, the 24 inch mountain bike sector has been badly undercut to the point where the only
> models which sell are those with suspension. Raleigh refuses to go into the BMX manufacturing
> sector because their bosses and engineers have little understanding of BMX and its technologies.

It certainly is a nail in Raleigh's coffin although the primary reason for the factory closure is
cheap foreign imports and the attitude of Raleigh's bosses in that they want the company to make
money rather than bikes. The Nottingham factory has been suffering a long and slow decline and in
some respects it is surprising that it was still functioning until the end of last year.

> Can anyone shed more light on whether this is really true or not. The bike shop used to be
> heavily centred on raleigh childrens bikes but now mainly deals in BMX as that is where the
> profit seems to be.

I used to work in the bike retailing business. In the mid 1990s 24" wheel mountain bikes were big
sellers and Raleigh at the time were seen as a quality make in that particular sector. Whether they
were the most profitable product area or not is probably only known to the accountants at Raleigh
but they certainly had strengths in terms of volumes sold at least from the shop at which I worked.
At the time sales of Raleigh mountain bikes with 16" and 20" wheels and also the lower end adult
bikes were declining from cheaper imports but sales of Raleigh mountain bikes with 24" wheels were
affected less by the imports probably on account of their perceived quality and a good name so that
kids or their parents would pay that little bit extra for quality on a 24" wheel bike than they
would when buying something smaller.

In 1998 when the shop started selling more and more BMXs and less and less 24" wheel mountain bikes
of all makes. I enquired at Raleigh about whether they would start producing BMXs as it appeared to
be a high growth area and the shop had good dealings with Raleigh. Their reply was that they would
not start producing BMXs again on the grounds that their engineers didn't really understand BMX and
the fiasco that happened in the 1980s with the Burner and the resulting damage it caused to Raleigh.
They sternly stated that Raleigh would stick to what it is good at rather than take big risks. They
also mentioned that Derby didn't want Raleigh to produce BMXs as Derby owned Diamondback and that
Raleigh dealers were also Diamondback dealers as well.

When I left the position in the bike shop in 2001 sales of 24" wheel mountain bikes were way down on
what they were when I started and over half sold were the suspension models. The shop actually went
and discounted a large quantity of standard 24" wheel mountain bikes to clear them as sales were so
poor and make way for new products, mainly BMX as that was what was now making money for the shop.

To summarise things the resurge of the BMX in the past 5 or so years has badly undercut sales of
24" wheel mountain bikes with Raleigh being one of the losers from the changes in consumption
patterns of kids and teenagers and Raleigh's refusal to cater to newer tastes. If the BMX didn't
make a comeback then a possibility exists that the Nottingham factory would have kept going for a
few more years but cheap imports would probably have forced it out of business sooner or later
unless they seriously rationalised their product range and concentrated on a small number of higher
end products.

On the other hand I reckon that a British company could successfully manufacture medium to high end
BMXs retailing at around £300 at a factory in Britain.