As reported by BikeBiz, UK bicycle company Planet X has announced that it will be shedding part of its workforce, blaming Brexit in the process. The news story was broken by BikeBiz, where author Carlton Reid alluded that things haven’t been plain sailing for the Yorkshire-based company in recent times. Reid states;
“The Rotherham-based company employed 118 staff, and is run by founder Dave Loughran. Its last accounts show an annual turnover of £18.3 million, and profit of £109,689. In 2015 the company made a loss of £86,594 on a turnover of £20 million.”
From the news article published by BikeBiz:
“Planet X of Yorkshire, has made almost half of its staff redundant, sources say. Brexit is being blamed. The Rotherham-based company employed 118 staff, and is run by founder Dave Loughran. Its last accounts show an annual turnover of £18.3 million, and profit of £109,689. In 2015 the company made a loss of £86,594 on a turnover of £20 million.
Planet X – which employed 142 staff in 2015 – owns the On One and Holdsworth marques, and also supplies eponymously-branded bikes. The company’s loss-making US operation was closed at the end of January.”
Update: We’ve been contacted directly by Planet X, who dispute the statistics published by BikeBiz about the company redundancies. They have sent us the statement below.
Statement from Planet X – Updated 22:00 2nd November
After 28 years we are still founder and enthusiast owned, as such, we have no external pressure to deliver huge profits for shareholders. Our passion and reputation for designing and manufacturing performance products at great value sets us apart.
This passion and reputation continues to grow, in fact, this past year has seen sales at record highs, coupled with the spikes generated by our notorious sales, we were acutely aware that our operational capability was not flexible enough to cope with such surges in demand.
Add to this our design team, comprised of Jamie Burrow, former US Postal Pro Rider, Mark Lovatt, 6 times Tour of the Peaks champion and, now joined by Spencer Smith, 3 time world Triathlon champion, have been working hard for the past 12 Months on a new line up of bikes, clothing and accessories, which we think they have absolutely “nailed’, we are expecting demand to continue to grow.
In order to address this, we have joined forces with world class e-commerce fulfilment specialists Abbey personnel services who boast clients such as Ted Baker, ASOS, Tescos, ASDA Fresh Produce and Poskitts Carrots and Pumpkins.
This means our fixed costs are reduced but we now have the capability to cope with the huge demand our notorious products and massive sales generate.
Abbey Personel Services is a Selby based employment agency who, according to their website, specialise in providing “..industrial and commercial staff for temporary and permanent engagements from short term, ad-hoc cover to high volume on site managed contracts.”
Bikebiz have told us that they stand by their story. Company records, seen by Singletrack, appear to corroborate the figures quoted by Bikebiz.
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Why Brexit, when trading figures prior are so poor?
With margins that slim, it seems the pound’s decline has just exacerbated the company’s issues. Brexit is not to blame, but it’s certainly not helped. I guess a staff cull will put it back into the black. Expect a much slimmer product range from them for the foreseeable. Can’t see how they can increase bike prices, when they’ve positioned themselves as the de facto discount brand, so they’ll have to stay a smaller outfit until they can turn things around, or someone snaps them up.
£86k loss in 2015 is a year before Brexit, seems a bit convenient to blame that for reducing workforce when trading has been very slim margins.
” our notorious products” they got that bit right!
‘Actually we’re doing fine, financially, we just thought we’d make 70-odd people redundant so we can do even better, and it’s not even a decision driven by a board of shareholders, just our “enthusiast” founder!’
ummm, love my 456, my Dirty Disco and slightly more than half the super cheap clothes I’ve ordered from them over the years, but I think it’s boycott time.
I may be reading this wrong, but surely they are laying off a bunch of staff that aren’t all that busy for most of the year, and then having a load of agency staff that they can bring in when needed – just like every other large web-based store.
Makes financial sense if not entirely moral… At the prices they sell I’m not surprised the margin is so low, but as stated earlier they are probably hiding previously loss making parts of the business.
Not defending them by any stretch, just not seeing quite why it’s such a big storey that could massively damage their reputation.
Austen has hit the nail on the head – bringing on board a labour fulfilment partner like Abbey will be to adopt the warehouse picking model employed by most high turnover, low margin seasonal variation business models (Sports Direct gets a lot of flak due to operating at the shadiest end of this model but they are not alone).
I remember back in the 80’s and 90’s as a student the likes of the NUS would have us sign up for boycotts of multinational corporations because of how they exploited workers/supported regimes that oppressed workers and yet now it is accepted in our own country that employees are a cheap dispensable commodity, with little or no rights/certainty of employment in the name of us getting everything for the lowest possible price.
But still, we got the latest must have f/s 650b+ mega enduro bike to replace last years must have bike dirt cheap so it’s all okay really isn’t it?
People like Planet X that by batches of products at a time will be massively hit by the devaluation of the £ to the $. Their costs will have gone through the roof but the sales prices are kind of fixed at say £999. Don’t under estimate how much the value of the £ has hit into profits.
If their demand varies up and down then having too many staff is a waste, but remember not all these temporary jobs are bad as some can actually be well paid. You pay a lot when you need staff compared to paying a much smaller amount but all year round. The key is getting decent staff so customer service can be maintained. If their skill is in the design, buying and selling of bike parts, why not out source the warehouse side?