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1. mos - Member

   With CRC's turnover. More of a megacorp than a bike shop now though.

   Take from management today's list of britains top 100 Entrepeneurs.

   "22. CHRISTOPHER WATSON, CHAIN REACTION CYCLES

   Since opening its doors 25 years ago, Chain Reaction Cycles has grown from a small family-owned village bike shop in Ballynure, Northern Ireland to the number one online bike store in the world, operating from a 100,000 sq ft, purpose-built factory. The original Ballynure Cycles, the humble brainchild of George and Janice Watson, came into being thanks to a £1,500 bank loan. But the hard-riding pair had their eyes on greater things and in 1989 moved to larger premises. Ten years later, as Chain Reaction Cycles, it went online and the rest is history. Still family-owned, it is now run by the Watsons' son, Chris. In 2009, it made £8m profit on £77.4m sales and should be worth £75m."

   Good on 'em i say.

   Posted 1 year ago #
2. z1ppy - Member

   perfect thread for a hijack, anyone want to summerise the crc security issue thread for me?
   Currently @ 447 post, 12 pages...

   Posted 1 year ago #
3. Garry_Lager - Member

   Check your CC statement for 2 £15 payments to O2...

   Posted 1 year ago #
4. cycleworlduk - Member

   I think they stopped being a bikeshop quite a while ago...

   Posted 1 year ago #
5. clubber - Member

   it made £8m profit on £77.4m sales

   Not actually so great, is it? Maybe it depends on the industry but a 10% profit doesn't sound like much to me unless maybe they're currently investing very heavily.

   Posted 1 year ago #
6. 5thElefant - Member

   Great story. Good for them.

   Unfortunately it's part of the British psyche to hate success. I'm sure £77.4M is a consolation to them though

   Posted 1 year ago #
7. Three_Fish - Member

   If you actually owned a bike shop, I suspect that your attitude to the Watsons might not be so supportive.

   Posted 1 year ago #
8. mos - Member

   No i don't, i run a small madular building company, but i don't have a problem with companies that are ten or even a hundren times my size either.
   The reason i posted, was that i found it quite interesting that a bike shop could be so big.

   Posted 1 year ago #
9. ianpinder - Member

   My company only makes about 3% tescos makes about 4% so I think just over 10% is adequate considering they buy in bulk and sell cheap....

   Posted 1 year ago #
10. MrOvershoot - Member

    clubber - Member

    it made £8m profit on £77.4m sales

    Not actually so great, is it? Maybe it depends on the industry but a 10% profit doesn't sound like much to me unless maybe they're currently investing very heavily.

    Sounds fantastic TBH.
    Last year our site made roughly £50k profit on sales of about £22m and yet we are said to be one of the most efficient plants in our sector!

    Supplying supermarkets is a mugs game

    Posted 1 year ago #
11. cookeaa - Member

    Not actually so great, is it? Maybe it depends on the industry but a 10% profit doesn't sound like much to me unless maybe they're currently investing very heavily.

    10% isn’t too shabby considering the market they’re in, and the fact that their major tactic is high volume low margin…

    Personally if I made £8m in one year (You’ll also notice that was 2009, so mid “Credit crunch” too) and was sat on a business valued at £75m (in what is supposed to be a growing cycle market at the minute) I’d not be too upset, in theory the only way is up for CRC…

    Still I’m sure your business acumen puts us all to shame, how many millions did you turnover last year By the way?

    Posted 1 year ago #
12. clubber - Member

    Like I said, maybe that is good for bike retail then... Just in my industry (aerospace), anything less than 15% would be considered pretty poor though that's possibly from more like an investment pov where you're pushing the levels where you can invest more safely and make similar returns.

    Posted 1 year ago #
13. mboy - Member

    Like I said, maybe that is good for bike retail then... Just in my industry (aerospace), anything less than 15% would be considered pretty poor though that's possibly from more like an investment pov where you're pushing the levels where you can invest more safely and make similar returns.

    Aerospace industry has to have massive margins, cos it's all relatively low volume, highly complex stuff. And the threat of anything going wrong ending up in any kind of lawsuit! Having worked for an Aerospace company myself in the past, and wondered how they managed to charge a fortune for what looked to me very little, I was quite shocked. But then again, you don't want a plane falling out of the sky, so if everyone is charging the earth, then you can too!

    For retail, 10% is a MASSIVE margin... £8m profit in a year, that's bloody amazing quite frankly! Many big companies with £1billion turnover in things like the manufacturing or logistics fields, struggle to make a profit of 1-2%... Put it this way, if I owned CRC, I'd be bloody laughing!

    Posted 1 year ago #
14. paulrockliffe - Member

    10% after stock+wages+equipment+building costs+tax sounds pretty good to me!

    Posted 1 year ago #
15. frank4short - Member

    Is it £8m EBITDA on ther £75m or £8m net profit? Could be a considerable difference.

    Posted 1 year ago #
16. clubber - Member

    Was assuming EBIT...

    Posted 1 year ago #
17. steve_b77 - Member

    Far better than the rail industry I can tell thee.

    All credit to them.

    Posted 1 year ago #
18. bent_udder - Member

    The EBITDA question is a good one - 9-10% is pretty healthy. They are also diversifying - remember they own Hotlines, have bought distressed brands such as Nukeproof and X-Lite. I wonder if the bones of RaceFace are next on the list for them?

    Posted 1 year ago #
19. mtbfix - Member

    You wish you owned a bike shop? I'd wager that plenty of bike shop owners wish they owned CRC too.

    Posted 1 year ago #
20. racefaceec90 - Member

    must admit that i would love to work in/own a bike shop (that would be my dream job).either that or something to do with guitars.

    Posted 1 year ago #
21. gearfreak - Member

    I love the way the CRC story always seems to omit the massive investment of venture capital partway through the venture. I'm sure Mr Watson no longer owns a very large %age of CRC, although a small %age of a big company is still nice to have.

    If the figures are EBITDA what is the interest charge? Would expect CRC like most VC owned companies to be mortgaged to the hilt, great at the moment with low IR's but could get messy in a couple of years time.

    Having said that although their presence can make the live of a LBS tricky they do a damn fine job.

    Posted 1 year ago #
22. cycleworlduk - Member

    ive heard from various sources within the trade that theyre turnover is more like £120 million currently...may increase theyre profit a bit

    any of you are welcome to some free lbs time and see what the affect of crc is on my trade......

    Posted 1 year ago #
23. mos - Member

    Gearfreak, The Watsons still own 80% according to companies house. Are you sure you're not on about wiggle?

    Posted 1 year ago #
24. gearfreak - Member

    Possibly, although I'm sure CRC had a big investment at some point. IIRC hotlines are part owned by the same people as part own CRC rather than actually being a subsiduary of CRC, however I may be confused.

    (Or was it wiggle and Fishers who are part woned by the same company??)

    Posted 1 year ago #
25. mos - Member

    One of the shareholders of crc is a shareholder of hotlines.

    Posted 1 year ago #
26. pistonbroke - Member

    Given their location, which is basically in the middle of a field in N Ireland, they would have qualified for massive Development Grant money to set up such an operation to employ a relatively high number of people in what is and was one of the most underdeveloped areas of the UK. Just wait until they completely automate the picking and packing operation and lay off all those workers in the name of cost saving. There's also the hidden jobs cost of all those LBS's who cannot expand or end up going out of business due to not making money on spares.

    Posted 1 year ago #
27. bangin on - Member

    It's really not worth me stocking forks or mechs or any kind of groupsets in my wee shop as it just sits on the shelf and folks tut under their breath that its x% cheaper online.

    Even peeps who's old wrecks i've nursed along (at mates rates) while they save for some new stuff go pedalling by on flash kit (obviously) bought online.

    It'd be enough to make a man all bitter and twisted, that's for sure.

    Given the chance I'll reward loyalty to locals and regulars, I give a discount to club riders; but it's just not worth watching the stuff go 'out of season' and see the prices tumble online. Fe**in spoils my day rightly!!!

    We make slightly more than 10% profit on our turnover but that's a turnover of b*gger all

    Posted 1 year ago #
28. Oxboy - Member

    Ok one for you bike shop guys what do you pay for an x9 rear mech currently selling on crc for £80.99? Or an slx at £44.99
    Just curious really . . . .

    Posted 1 year ago #
29. Sandwich - Member

    From someone who's not in retail, trade is roughly 50% of retail plus VAT. Madison require a £1500 minimum order value the last time I looked. It's no wonder the LBS trade don't keep a lot of stock a ridiculous minimum order that will sit around and lose money for the proprietor as everyone goes on-line.

    Posted 1 year ago #
30. JonR - Member

    And with that sort of turnover they don't care if a few thousand customers get their credit cards turned over because of a lapse somewhere in their security because with prices as cheap as theirs they know they'll always have customers.

    Posted 1 year ago #
31. Duc - Member

    "Automate the picking and packing" I'd really love to see how they would do that with the enourmous sku density that they run (and all of its different volumetrics etc.)and the huge levels of inventory they have to hold.
    That is not an easy process to automate so I think they will continue to employ quite a few people in that facility for some time yet.
    Automating warehouses requires stable and predictable products or an ability to exert significant pressure on your upstream supply chain. That isn't something that CRC have at the moment

    Posted 1 year ago #
32. Stuey01 - Member

    Near where my parents live Ford are operating a parts distribution centre with the largest single story warehouse in Europe (at least it used to be, it's f'ing big I know that), with hand picking and packing.
    Given the scale of that operation and the fact that the automotive industry is highly automated in other areas, the fact that they haven't automated it suggests to me that it is either not commercially or not operationally viable and that it is highly unlikely that CRC are going to be doing away with their local staff any time soon.

    Posted 1 year ago #
33. headfirst - Member

    This article might be of interest.

    http://www.bikeradar.com/feature/article/chain-reaction-cycles-behind-the-scenes-29496

    Posted 1 year ago #
34. Duc - Member

    And thats exactly my point - automation only works with nice regular shapes! Thats probably about as far as they can take it without some mega expensive ASRS work and the building frankly isn't designed to do that. Getting into that sort of thing you design the storage and build around it to make it work.

    Posted 1 year ago #
35. Oxboy - Member

    So looking at it what you can buy it for isnt bad, theres room to make a bit, the £1,500 minimum order is a bit much though 8O, arent there any other parts suppliers???

    This is whats happening in my game http://www.printweek.com/Business/article/1059978/print-buying-group-formed-help-printers-save-consumables/

    also I remeber the local electronic retailer was in Euronics I think that was a buying consortium aimed at helping the smaller retailers . . .

    Posted 1 year ago #

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