WisBusiness: ‘Lance effect’ leaves buyers favoring costlier road bikes

By Brian Clark

MADISON – Bicycle retailers are hoping Lance Armstrong’s seventh Tour de France win this weekend will ripple back to the United States and into their cash registers.

“Armstrong’s success has been great for the industry, especially for his sponsor – Wisconsin’s Trek bicycle company – and other road bike manufacturers,” said Andy Breun, general manager of the Machinery Row bike store on Williamson Street.

“Ever since OLN (Outdoor Life Network) started covering the tour a few years back, we’ve seen a marked change in interest,” he said.

“And not just from the avid cyclist, the rise in interest comes from the every day sports watcher, too,” he said.

Breun said cyclists can spend as little as $600 on a road bike or $10,000 for a gold-plated collector’s version of the bicycle Armstrong rode to his sixth tour victory last year.

“People are upgrading their bikes, putting on better components and buying completely new bicycles that are more comfortable, perform better and require less maintenance,” he said.

Though Waterloo-based Trek, which has focused much of its marketing on Armstrong, has benefited greatly from his Tour wins, Breun said other companies have done well, too.

“Cyclists know that (Jan) Ullrich, (Ivan) Basso, (Michael) Vinokourov and other top riders are on Giants,” he said. “The whole road bike industry is doing well.” Mountain bike sales, however, have been flat.

Jerry Kegel, who manages the Wheel and Sprocket bike store in Brookfield, said he has never heard anyone say they are taking up cycling because of Armstrong.

“But it’s a remarkable coincidence that there has been a huge growth in interest in the sport – especially for road bikes – during the past seven years or so,” he said.

“I’d say we have quadrupled the number of road bikes we sell annually since 1999,” he said, noting that the average price is about $1,500.

He said his company, which has four stores in the Milwaukee area and two in the Fox Valley, sells more mountain and hybrid bikes – but makes more money from more expensive road bicycles.

Kegel said Trek is his store’s top-selling brand, with Giant in second place.

“During the tour, people have come in and talked about how Lance is doing,” he said. “We have had it on all the time.

“I have never seen this much media coverage,” said Kegel, a former racer. “Lance is a great athlete and a compelling story. And it’s even more special this time because he is retiring.”

Kegel said he hopes people will stay interested in the sport after Armstrong is gone.

“He’s certainly been great for cycling in this country,” he said. “A guy like that doesn’t come along very often.”

Dave Schlabowske, program manager for the Wisconsin Bicycle Federation, said a recent study showed that bicycling – from Trek’s $500
million in annual sales to small bike shops – has a $1 billion economic impact in the Badger State.

“I certainly hope it keeps growing,” said Schlabowske, whose group promotes all aspects of bicycling, including commuting.

“The Tour de France has been wonderful for cycling in the United States and here in Wisconsin, too,” he said. “There has been tremendous media coverage, from television to daily newspapers giving it prominent play.

“I’d like to think that it has changed some motorists attitudes about cyclists, too,” he said. “Instead of viewing bicyclers as something that makes them slow down, they perhaps now associate them with Armstrong, who is an heroic figure.”

When Greg LeMond was winning Tour de France races in the 1980s, Kegel said he inspired kids to get into the sport.

“I think it will keep rolling, even after Lance,” he said. “From youngsters to people who are 15 or more pounds overweight. If they see that someone like Lance can come back from cancer and win six and then seven Tours, they get inspired.”

Ben Delaney, editor at large for Bicycle Retailer Magazine, said the industry would prefer that Armstrong stay in the saddle for years to come.

“So they want to get while the getting is good,” he said. “It’s hard to say what effect Armstrong’s seventh win will have, but his popularity and success certainly doesn’t hurt.”

Delaney said road bike sales have been on an upswing in recent years.

In 1999, suppliers shipped $51 million worth of road bikes. By 2002, sales were up to $142 million and then jumped to $178 million last year. In 2004, manufacturers shipped 218,668 road bikes – up 16.6 percent from 2003, according to Bicycle Retailer.

“Trek has probably benefited the most because Lance rides for that company, but a rising tide raises all boats,” he said.

“And while you can’t really quantify a direct correlation, most retailers will tell you they believe the Armstrong-effect has added to their bottom line,” he said.

“It’s kind of neat that this is a sport where you can use the exact same product that Lance is riding – a $5,000 Madone 5.9 model.”

Delaney said other factors have influenced the rise in road bike sales.

“It has to do with boomers aging, in part,” he said. “In the 80s, they were into mountain bikes. But crashing hurts.

“Also, they don’t have all day to go out and ride. The spouse might only let them have 90 minutes of play time. But you can get in a good workout in that period.”

Delaney said retailers are happy to indulge cyclists increasing interest in road bikes.

“People spend an average of $350 on a mountain bike, while a typical road bike runs $1,200,” he said. “It can get spendy real fast. If you are selling bikes, you gotta like that.”