Shimano bike business forecast revised down, retailers undercut online by price rises

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Shimano has posted an 18.6% dip in bike related sales in the first half of 2016, as well as a 28.5% fall in operating income.

Laying the blame at the doorstep of poor weather, the UK’s ongoing Brexit problems and high inventory in the industry, Shimano has now revised down its forecast for the rest of the year. Earlier predictions had suggested the full fiscal year would generate some 350 billion Yen. That figure has now been lowered to 325 billion Yen. Operating income forecasts follow suit, dipping 15% from 80 to 60 billion Yen.

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Though far from alone, the brand has faced particular difficulty in the UK with Brexit already influencing price increases. An Ultegra 6800 cassette, for example, has risen from £59.99 to £79.99, placing online discounters prices below that accessible with a trade account. Specialist bike retailers understandably remain displeased at the erosion of their sales potential.

Poor weather across Europe in March and April further compounded high levels of distributor inventory, further slowing sell through, according to Shimano.

In North America, retail sales of completed bicycles were somewhat weaker than in the same period of the previous year. Despite a subsequent slight improvement, distributor inventories of bicycles remain high.

In China, although persistently high distributor inventories are heading to an appropriate level, there have been no signs of recovery in retail sales of sports bicycles that have been lackluster since the previous year.

Despite these market conditions, segment net sales for the first half of fiscal year 2016 achieved the initial target. As a result, net sales from this segment decreased 18.6% from the same period of the previous year to 132,630 million yen, and operating income decreased 28.5% to 30,586 million Yen.

Shimano’s full half year report can be viewed here.

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