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Are better times ahead for motorcycling?

Discussion in 'General Motorcycling Discussion' started by E2W, Jul 10, 2012.

  1. If people like Archer Capital are going around buying bike shops does this mean that they see motorcycles as a future expanding profitable business? They bought the TeamMoto chain and Morgan & Wacker recently and rumour has it there about to take over another big chain of stores. Is it good for motorcycling or not?

  2. IF service is good
    IF customer support is good
    IF it makes it competitve price wise
    then all good, but for some reason, I just cant believe it's not heading down the Safeway/Woolies road where the legit good small business is going to fark'd over.
    Support for places like yours will need to increase
  3. It depends on what Archer expect to gain from it?
    If its a cash flow investment and there just buying shops for cash flow it will depend on who is managing the stores?
    IF there are keen to bring real competition into the market and grow the industry then that would be a good thing.
  4. Venture capitalist are not usually long term investors. What they will do is buy the businesses, look for synergies and ways to reduce costs and then sell out at a profit, either by stockmarket listing or trade sale. They will already have their exit strategy worked out and this will usually be a 3 to 4 year time frame.

    Will it be good for motorcycling ? Hard to say but one thing is for sure, they wont be doing it unless they think it is going to be good for themselves first.
  5. I hope its not history repeating itself. In the UK about 15/20 years ago an investment group bought every shop it could lay its hands on. They took over Motorcycle City and Carnell Motorcycles who at the time owned a heap of stores between them alone. They rebaged the whole chain as Riossi Motorcycles with around 50+ stores in the chain. Then one day it all went wrong the group went broke and apart from 4 or 5 stores that were saved by management buyouts it closed down. So many people lost their jobs but also so many smaller stores had gone broke due to Riossi being able to lean on them with their buying power.
  6. It's a strange move, but not inexplicable. Aus bike market grew 2.5% this year despite many smaller enterprises failing. Obviously they buy out under-performing businesses and try to turn them around, but they must sell them for profit afterwards to make it worthwhile. Not nearly enough clear profit in bikes to make into a long term cash cow.

    Even if they need some deductible losses in the short term, they'll need to turn 'em around eventually to break even.
  7. This is what worries me.
  8. i saw this happen when i was in the Plastics game.

    I left the sinking ship....and it did sink
  9. This is not a unique situation.
    Although many times these large buyouts/ takeovers are undertaken by investment groups with no knowledge of the motorcycle industry.
    Even companies with strong automotive backgrounds can struggle negotiating the motorcycle landscape. It's as much a seasonal business as it is subject to fashion and whim with no large-scale fleet or corporate market to align itself with.
  10. It's just happened in my particular industry. A group of venture capitalists bought out a large and thriving business (wholesale/retail/distribution) when the owners decided to retire. They opened new stores willy-nilly, brought in "managers" with no experience in the trade, expanded the number of chiefs and got rid of most of the Indians, blew their credit with suppliers out the window and suddenly found themselves owing, literally, millions and with no stock to sell they had no way of progressing.

    Eventually they brought in a "headkicker" who has shut down half the shops, fired most of the chiefs, hired new Indians, negotiated new stock on 7-day credit terms and is actually managing to repay its debts. As a large percentage of our business, we can only hope they succeed. Whether they ever regain the confidence of their previous clients (a notoriously conservative market) remains to be seen, however ...
  11. Perhaps this mob want to altruistically bring pricing and service benefits to the motorcycling community by selflessly sacrificing their scarce capital reserves and lending their vast management credentials to the cause? Maybe this could be the first step towards price equalisation with overseas markets resulting in all of us being able to access product locally at low cost combined with the employment of passionate and dedicated employees providing the best of the best in state of the art facilities???????

    Maybe I'm too cynical because it could be all these good things for the industry, it could be. 8-[
  12. How can you be so drunk and not making sense at 3.08 on a Tuesday afternoon?
  13. Perfectly sober. E2W, I don't think VC interest is a good thing.
  14. I really cant see how these guys are going to make any money out of what is a small industry in a country with such a small riding population unless these guys know something that we all cant see? They might be gambling that congestion charging is going to come in like in Europe because that was the event that made Joe average turn to two wheels in droves as an everyday mode of transport.
  15. If we're not getting those things now, where can it go but up? ;)

    Venture capital worked out very well for Ducati, and their customers.
  16. E2W I'm guessing it'd be more of an longer term view to bundle and sell? I've no statistics to back my impression, but there appears to always be fewer players here in the Sydney market.....someone may see a pattern or opportunity in that nationally? Not sure.

    Titus, VC seems pretty hit and miss to me. Ducati is a different kettle of fish to a local dealer/reseller network?