Raleigh : an interesting article


Well-Known Member
Jan 5, 2004
This might be of interest - an article about Raleigh and it's commerical operations.

Raleigh, still one of the best known names in cycling, is in many ways emblematic of the rise and fall of British manufacturing.

The company, founded more than a century ago, was making 1m bikes a year at its peak in the 1950s and was recognised around the world. It was the biggest employer in Nottingham. It had its own ballroom and bowling green for staff; its factories were the setting for the humdrum life of the angry Arthur Seaton in Alan Sillitoe's novel Saturday Night and Sunday Morning.

But a slow and painful decline set in. Raleigh went through changes of ownership, was slow to adapt to the market and struggled to keep back the tide of a globalising economy. In 2001, its parent company went bankrupt. Raleigh was bought by a former chief executive, Alan Finden-Crofts, who became chairman.

The factories had already been whittled away over the years and one of the first things the new management did was close the remainder. The bikes are now made in Bangladesh, Thailand, Sri Lanka, eastern Europe and Vietnam. The remaining 180 staff have moved to a modest mid-century office building off a residential street in Eastwood, a small town 30 minutes' drive from Nottingham. From there they have been fighting to get the business back into profit.

Mark Gouldthorp bounds out of a side door and races across the driveway, his hand outstretched, wearing a blue shirt with a Raleigh logo that makes him look like a shop floor worker; it takes me a moment to register that he is managing director of the UK business. He talks rapidly in a Yorkshire accent and dashes around like a commuter late for work.

Pom poms

We head for a large showroom where the bikes are lined up, to take a look at the range; it also sells under the Diamondback and Triumph brands. They can cost up to £5,000 for downhill mountain bikes. Which is the best seller, I ask. He marches across the room to a small bright pink confection with glittery pom poms and a dolly carrier behind the seat: the "Molly", which retails at between £80 and £100, depending on size. "That's the best selling bike we do, every which way you look at it."

Gouldthorp joined the business as finance director in 2002, a year after it was bought. Shortly afterwards the managing director installed by Finden-Crofts quit. Gouldthorp stepped in.

He describes Raleigh as "one of those case study opportunities", an "organisation that has gone through the mill and come out the other side". In the year Gouldthorp joined, Raleigh lost close to £6m. This year, revenues were £31m and from that it eked out a profit of £1.2m. "The public's awareness of the brand is still very high," he says, "although too much of it is: 'Oh, they are still going are they?' " Raleigh's market share is down to about 20%; at its heyday it was 60%.

When Gouldthorp arrived the decision had already been taken to close production. "It was horrible, horrible," he says. "To be in there at the death was not something I want to go through again. The staff bore it very stoically really. They were resigned to what was going on because the previous set of redundancies, which had pretty much halved the workforce, had been the last in a very long line in the 20 years before.

"I have spent my whole career working for classic British industries that couldn't organise a ****-up in a brewery - 15 years at ICI, eight years at ICL. The management spent 90% of their time rearranging the deckchairs on the Titanic. The number of reorganisations that we went though in those two companies over that time was ridiculous and we never sold an extra computer or an extra pound of chemicals as a result - it just gave management something to do.

"It is soul destroying. So to come to Raleigh at the point where it has got the chance of a new life is a tremendous opportunity."

Moving production overseas was inevitable, he says. "At the end of the day labour in the far east is a tenth of what it is here, there is no way you can get round that. But I think it is the mismanagement of British brands that is not defensible."

Gouldthorp says in the past couple of decades Raleigh has been "squeezed in a vice". At one end, a new breed of manufacturers were building low cost bikes in Asia. At the other, the mountain bike craze had injected new life into the market but opened up Raleigh to new competitors from the United States and Europe that had more cachet.

At the same time, the retail climate has become increasingly difficult. "The national retailers are a bunch of vipers, the Argos, Halfords, JJBs; I'm not picking on them particularly, I think it is the nature of national retailers - there is a strategic push to command as much of the supply chain as possible and really just top and tail with brands where absolutely necessary.

"We have a smattering of presence within the national retailers but it is subservient to their own private label. Then independent retailing in the UK is a shambles. It is real Steptoe and Son stuff. Most of them will turn the lights off on a sunny day to save a bit of lecky. If you want to imagine the typical independent bike dealer, he is 50-60, highly cynical, miserable, moaning, scruffy. That's my customer. It is great."

The first few years of outsourcing were a steep learning experience. Raleigh took its eye off the ball in design and quality as it tried to compete with rivals on price, Gouldthorp says. Early in 2005 the company took a "critical look" at the product, which led to a revamp.

"It is a vicious circle. You're losing faith in the brand a bit, you are constantly trying to achieve a price point, then you break out of that and realise, if you don't believe in your brand who the *********** will? We should be making bikes of the right quality that we are proud of and then charge the right price for it and stop looking over our shoulders at what competitors are doing."

Despite getting costs down and improving the quality, sales were still not taking off. The answer, Gouldthorp believes, is to take control of the retail environment.


The company has set up a retail franchise, Cyclelife, and is offering to convert and spruce up independent bike shops as well as looking for franchisees in towns where there are no independents. There are currently 85 franchisees, and Raleigh has a target of 250. "I've got the product, I've got the brand, but if people can't buy it then I'm knackered. And that's our issue. That's the fundamental strategic issue we face."

The return of the Chopper, that 1970s classic, got the company huge publicity and in 2004 the bike accounted for 15% of sales. The following year, the fad was over and Raleigh was left with stock on its hands. The Chopper still pays for itself but is no longer a best seller.

"There is a passion that we shouldn't walk away from. But I don't want the brand to be solely reliant on this kind of thing. I want some 21st century icons."

With concerns about obesity, the environment and urban congestion charges, the trends appear to be in cycling's favour. But after decades of growth, bike sales have been in steady decline in the past few years. Mintel says the market shrank by 5% between 2000 and 2004 and is predicted to fall another 15% to £230m by 2010.

"The roads are not a pleasant environment to ride on," says Gouldthorp. "You need dedicated lanes. I live 20 minutes' drive away and it would be a 40 minute cycle ride. I wouldn't consider that. The roads I'd have to go on it would be like Death Race 2000.

"Trying to cut through the government quangos around this is scarily bad. There are so many organisations professing to be champions for cycling in the UK - how much of that money and funding gets through to infrastructure?" He lets out an exasperated sigh.

The son of a South Yorkshire coal miner, the job at Raleigh is something of a homecoming for Gouldthorp, who grew up not far from Raleigh head office. He says he spends a lot of time with his children. "What else do I do? This place; get drunk and go and see as many rock bands as I can."

He says it was time to leave ICI when he realised all of the divisions he had worked in had subsequently been sold off. He also had a brief stint with John Caudwell, then owner of Phones4U. He didn't enjoy it.

On one wall in his office, he has a map of Britain covered in pins. Each represent a dealership. Another wall is covered with drawings by his two daughters. On a third, a photograph: he is posing with a big grin and two tall blonde women in scarlet tracksuits. "They are two gorgeous eastern European girls who were on the Toyota stand at the British grand prix.

"And when I make my millions I want to spend my life touring the grand prix circus every fortnight; that would be my idea of heaven, ideally with Greta and Eva there as well," he says. "I'm making this up as I go along."
Interesting article Lim. Raleigh sponsor the race team of which I'm a member. The bike quality at Raleigh is definitely on the up. And the Raleigh guys that spoke at our recent annual bash seemed very down-to-earth and positive on where the company's heading.

limerickman said:
This might be of interest - an article about Raleigh and it's commerical operations.

Raleigh, still one of the best known names in cycling, is in many ways emblematic of the rise and fall of British manufacturing.

The company, founded more than a century ago, was making............
limerickman said:
Raleigh, still one of the best known names in cycling, is in many ways emblematic of the rise and fall of British manufacturing.

My first two bikes were Raleighs. The first was a miserable Super Course, bought in 1970, that dropped nuts, bolts, and other components as I rode, until I stripped the whole thing down to rims, spokes, hubs, and ball bearings, and put it all back together. I saw the bike as a harbinger of the downfall of Raleigh and a crash course in shade-tree bike mechanics.

The other was a totally weird but delightful International that was unfortunately crashed hard in the Cat 3 race of the Travelers Criterium in 1975.

If Raleigh wer ever to produce replicas of the team issue bikes used by the TI-Raleigh and CRC of A teams of the mid to late 70s, I'd be near the front of the line.
Good reading, thanks!

There's more than one similarity to the demise of Schwinn.