ANALYSIS
WHERE DO WE GO NEXT?
BikeBiz takes a closer look at a recent report from Houlihan Lokey and Kearney which considers a number of factors that could defi ne the future of the bike industry
From Boom to Bust — and Back Again?” is a new report by global investment bank Houlihan Lokey and management consultancy Kearney, deeming
the bike industry “ripe” for investment as the market heads towards recovery in the coming years. The research, which has drawn on the experience and expertise of 30 industry executives and 10 industry-relevant financial investors, covers insights generated before, during, and after the “bike boom” caused by Covid. Based on these findings, the two firms are forecasting a gradual recovery with significant upside in the medium to long term, with 2026 and 2027 marking pivotal years for increased M&A (mergers and acquisitions) activity and investment opportunities. The bicycle industry may have faced a turbulent few years, with unprecedented highs and – in some cases – staggering lows, but now, with the market beginning its recovery, attention turns to how it will evolve in the coming years. This report has outlined several factors which could potentially define the bike industry’s future.
26 | August 2024 PHOTO CREDIT: ALMAS SALAKHOV ON UNSPLASH
Market recovery and e-bikes “At the moment, the main issue is bringing down the large stock levels currently in the market. It will take until the end of the year until we are more or less on normal levels again,” says one of the executives in the report.
This is the anticipation of many brands and dealers who are hoping to see 2025 offer calmer waters. Although still high, discount levels are expected to gradually balance out, lifting margins over time. The report states that “68% of bike executives surveyed
have positive profitability expectations in the medium term, citing healthy inventory levels and industry consolidation as key drivers for a return to healthy profitability levels”. It also notes that “recovery will need to be judged by value rather than volume”. While total units sold are expected to remain flat in both Europe and North America, revenues will make a comeback as sales – particularly of e-bikes – grow. The rise of e-bikes is one of the major recent developments noted by the report, with adoption
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