MAK

I was just on the REI web site and see that they have three Brompton models for 30 day pre-order.

M6R in British Racing Green
M6L in Black
H6R in Red

It appears that they cannot be customized (stem, suspension, color, etc.) and they have different features.

Two come with Brooks saddles and two have Schwalbe Marathon tires with one dressed with Schwalbe Marathon Racing tires. I didn't bother with more detailed reading/comparison right now.

I plan to go to REI soon to discuss the availability of factory options and if REI will be stocking Brompton parts and accessories.

With the member discount and additional 5% if using the REI Master Card, the deals look really good. I've been ogling the M6R in BRG for a while and it looks like I've run out of excuses.

CliffordK

Uhhh... Ohh.... Isn't REI a Northwest based cooperative?

Hopefully they balance out the British bikes with Northwest built Bike Fridays, if Bike Friday could ever figure out a good way to wholesale the bikes, or sell them on consignment.

HGR3inOK

My understanding is (1) that the REI Bromptons are limited to the three models listed, (2) that some Brompton parts and accessories will be available from REI, and (3) the three models are exactly the same as the ones from other Brompton dealers. I believe this is a good move for Brompton, REI and Brompton customers.

-HANK RYAN-
Norman, Oklahoma USA

tcs

Surely a good move for Brompton in their announced growth goals. I wonder how Brompton's heretofore small USA collection of local dealers feels about this addition of 155 outlets backed by a national internet sales company, selling at 10%~15% discount?

reppans

Awesome! I hope they stock consumables (tires, tubes, brake pads, etc) in store.

linberl

There's a shop near me that sells cargo bikes and bromptons, he opened about a year ago. Great shop, great guy. The REI (of which I am an original member) is less than half a mile away. This is definitely going to hurt his business. Wouldn't be surprised to see him either dump Brompton or cut his stock to exclude the REI models and similar. I know he wasn't expecting this :-(.

bargainguy

Brompton is a fairly limited distribution and exclusive product. Seems like Brompton is trying to increase sales and visibility at the expense of infuriating their established dealer network, because there's no way an independent bike dealer can compete with REI as far as pricing, given REI member discounts. Since a Brommie is a fairly expensive purchase, it will probably encourage some folks who were thinking of buying a different model at an independent to buy a cheaper model at REI, further complicating the situation.

We know Brompton invested a boatload of cash on the electric Brommie development. Maybe they are more cash-poor at the moment than any of us realize, and this is their way of boosting their cash flow in the short term, perhaps at the expense of sales and expertise from independents in the long term.

MJBikes99

Definitely an Omni-channel marketing strategy, read the news! seems all brands are talking about it.

avole

I can’t see the problem, it’s the capitalist system , after all, nothing to do with Brompton or the chain selling them.Remember that the supermarkets killed greengrocers, butchers, fishmongers etc throughout most of the world, while department stores killed other specialist shops. Now Amazon and the internet are killing the.megastores, so Brompton have made a sensible decision, and one for which they had little choice.

BikeLite

Maybe the Brompton bikes at REI will be exempt from discounts like other brands are.

Winfried

Besides, there's more pressure from shareholders now.

avole

So Brompton overspent on developing their electric bike? Pure speculation, of course. Me, I think they want to sell more bikes in a booming market.


I'd also point out that the US is a particularly big market, so I can understand why Brompton want to increase their share, it's good business sense.

tcs

Yep.

Omni-channel was the big thing @ the Dahon Global Conference last week.

"The main theme of the conference this year was omnichannel marketing, which we believe to be absolutely essential to adapt to and take advantage of. Meeting this way is really a perfect opportunity for us to introduce this goal to our network, and to learn from those who are doing a great job in their markets following omnichannel methodology." Dr. Hon

BTW, that's the Folding Bike Forum's own Thor (with the red pants) sitting right next to Dr. Hon in the banner picture.

tcs

I've always felt that Brompton was curiously under 'outletted' in the USA market.

Well, certainly in Parts Unknown the Brompton is for the most part unknown. Visiting London, it seemed almost every bike shop had Brompton floor stock.

tcs

The closest REI to Hank (HGR3inOK) is 190 miles away in Plano, Texas. Up until now the 7.1 million population of the Metroplex has had Hank or a shop in Austin, about the same distance away, for Brompton sales/support.

Certainly not speaking for anyone else, but I'm guessing Thor would sign him up as a dealer.

curl in blue.jpg

berlinonaut

There's absolutely no foundation for that assumption. Brompton's accounts are publicly available - you can just look for yourself. They spent about 1 million Pounds on the Brompton Electric over the last years and while having a turnover of 32,6 million Pounds in the financial period April 2016 to March 2017 which is 15% more than the year before. They earned 2,5 million pounds before tax in that period and have a serious amount of cash at the bank. So absolutely no issue at all and pretty easy to find out instead of creating rumors.

Not really. Brompton is still kind of a "family business" with no hedgefonds or such involved and owned by people who are interested in the company longterm. They are paying a pretty good dividend each year, even last year when they earned only little money due to the factory move. This year they plan to pay about 6 Pounds per share for the financial period 2016/2017 (which is a serious rise but still within the range what they used to pay in the past years).

The issue may be that sales have stalled at ~45.000 bikes for a couple of years now for a number of reasons like weaknesses in some Asian markets for economical reasons. In the USA Brompton only sold less than 2500 bikes in 2016/2017 according to Will Butler Adams. Far more than before they took the distribution into their own hands a few years ago but really not much compared to what they sell in much smaller countries. And less than the amount of F150 trucks that Ford sells in the US PER DAY (according to top gear). Loads of potential are unused due to a lack of dealers and presence in the minds of potential customers. Therefore the move towards REI seems to be a clever one as they create a huge market presence with only very little effort. And it may be even good for smaller dealers if there are only a very limited amount of standard variants available through REI.

REI sells three variants. If you count all possible combinations to build a Brompton you end up with more than 4.5 million possible different bikes, not counting in the special editions. So there's plenty of possibilities left.

With some luck this could even boost the dealers' business longterm. I think the deal is just part of their growth strategy - with the new factory they announced to target 100.000 bikes a year by the early 2020ies. So there's still a way to go.

bargainguy

I beg to differ. From Wired magazine in the UK:

The Brompton Electric comes at an interesting time for the west-London manufacturer. After enjoying a decade in which sales steadily rose, and the perception of its bikes being reappraised from oddball contraptions to design classics (as well as the company lauded as a paragon of artisanal craftsmanship), the 115-employee firm has seen annual profits fall by 40 per cent in 2016 to £1.3 million due to heavy investment, opening a New York office and renting a huge new London factory.

...also from A to B magazine, Aug 2017, p. 35:

...Brompton has sunk a huge sum into developing its unique power-assisted machine, and if it bombs, there will be blood on the boardroom carpet...

So yes, there is some reasoning involved here, not merely idle speculation.

avole

You should read your quotes more closely. Nothing in either says they have overextended, only that thay gave invested significant amounts in 3 areas, and that the consequence has been a drop in profits, which are still healthy.

So, no, little reasoning, only speculation

tcs

I see on the REI web site a black M6L at a USA price of $1296 with the member 10% and REI branded charge card 5% discount.

Long time US Brompton dealer NYCE Wheels has as of current an advertised stock 2018 black M6L price of $1349 (that's $150 off either their regular or previous price). But let's say there's a desire for custom paint. Entering the 'Brompton builder' on their web site, one can get a veritable rainbow of colors - and a displayed M6L price of $1980!

Perhaps a part of Brompton's 100,000/year strategy is moving away from those 4.5 million variations to a more streamlined operation mostly producing only a few standard models?

FWIW, there was a report on the 'net that the everyday bike shop price of a Dahon Curl i8 in Thailand was under $1300 USD. We've previously discussed the €995 Curl i3 shop price in Germany. There are different tariffs, shipping costs and distributor markups in every country, but methinks Dahon has some margin to play with on the Curl.

Winfried

With flat sales, we'll see how shareholders feel about this.

€1,400/$1,700 in Germany for the Nexus 7 version:

https://www.faltradxxs.de/dahon-curl...lieferbar.html

berlinonaut

Oh yes, Brompton is obviously in deep trouble. Wired obviously refers to last years accounts which unsurprisingly have not been brilliant regarding revenue. And they only refer to one spot in a big picture which leads to wrong assumptions. The Brompton Electric is not yet in customers' hands, therefore there is no feedback on sales yet. People seem to like it and it is expensive. And late. We'll hopefully see how it will perform in near future. Generally the margin in electric bikes from established companies is really big. The parts are not that expensive to produce, but there's a lot of R+D to be paid for.



These numbers I got from Brompton's accounts over the years. Black is turnover, green is profit before tax. They moved into the new factory at the beginning of 2016, causing an investment of AFAIK ~2 million Pounds and (to see from the accounts) a number of temporary cost such as rent for two locations. Brompton's financial year starts in April and ends in March - therefor the low profit for 2016 is obviously explained and it is a one-time-low. Profits have risen but not to the one-time-high they had in 2014. They outgrew their old factory and with the new one they are prepared for further growth with the downside that they have to grow to make use of the space and capacity they now have. BTW: According to their accounts Brompton with it's subsidiaries had 228 employees on average during the last financial period.

berlinonaut

I would not be so negative. The massive growth started when Will Butler Adams became director in 2008. He did an amazing job. They outgrew their capacity, limiting further growth. What they did over the last two years was taking a deep breath, preparing for the next step:

- new factory with double the capacity than before
- newly structured distribution by subsidiaries in China, Honkong (for SE-Asia), the US and Benelux to gain more control and foster growth as well as to deal with currency risks
- building up new markets slowly and sustainably and preparing to grow in existing ones with huge potential in the same way
- finishing the development of the Brompton Electric
- insourcing a lot of processes like the painting with the result of flexibility and saving on cost (more to come in that area).
- getting independent from the companies in Russia and China that made the titanium parts by founding a company in the uk that makes them now (with the potential for further R+D in that area).

This is a hell of a lot for a company like Brompton. So they seem to be pretty well prepared for the future with the risk of the success of the Brompton Electric (which in the beginning they possibly will not be able to meet demand if you read between the lines) and potentially the effects of the Brexit. Both risks are btw. not mentioned in the director's report, a bunch of others are, namely cheap clones and the danger of a sunk in demand.

Regarding the shareholders: They should be pretty happy. The get a serious amount of dividends each year and profit will probably go up even w/o additional sales through saving on cost with the new factory.

Winfried

Where can we find who owns Brompton shares today?

berlinonaut

Here.

bargainguy

Fair enough, I stand corrected. Thanks, Berlinonaut.