Tandem Group bike takings halve in trading update

This morning The Tandem Group released a trading update ahead of FY22 results, which although inline with market expectations, posted sharp declines for the group’s overall revenues (down 35% LfL) and, specifically in cycling, a 52% decline in takings.

A sharp drawback on revenues was to be expected following a bumper 2021 taking on the back of strong demand during Covid’s worst moments. The broadly held concern in the bike industry is what comes next as demand has slowed to a crawl and inventory piles high with brands large and small. This has already led to substantial discounting and a weariness that in the near term profitability will be hard to come by.

For Tandem “sales continuing to be challenging in both independent and national retailer markets,” according to this morning’s RNS.

eMobility strong into Christmas, but down 46%

Power-assisted products have been a silver lining to a rough year for the bike industry and there were signs that demand exists; Tandem writing that “We remain confident that this division represents the largest potential.”

Like-for-like sales of electric bikes in November and December were significantly ahead of the prior year at 92% up. The rest of the year’s performance did however lag and leave the revenues in the division down 46% overall for FY22 versus the prior year. Electric scooter trading again ran 25% ahead of FY21 in the months leading into Christmas.

“Government legislation specifically for e-scooters continues to experience delay which is holding back the opportunity within e-scooters, but there has been a continued focus around encouraging consumers to adopt electrified means of transport including e-mopeds and e-bikes which, as highlighted above, we are seeing encouraging growth in,” wrote Tandem.

Warehouse set for completion

The completion of the firm’s new warehouse is said to be just weeks away and in line with this the firm’s leased Northampton property has now been fully vacated, while work has begun to exit the Felixstowe storage and this is expected to be complete by the end of February, improving operational efficiencies.

Outlook

The Tandem Group expects 2023 to again have a different pattern to prior years, which it’s fair to say have been anomalous. With FY22 now registered the group is targeting a like for like growth of between 8% to 12% for FY23. This, it is hoped, will be achieved via an expanded network of accounts; over 80 independent accounts were opened in the second half of 2022, plus a few national retailers were onboarded.

In case you missed it: Last month the business onboarded the Quella Cycles label.