Raleigh balances nostalgia with pragmatism in going electric

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At Nottingham’s ‘Experience Raleigh’ shop, the main showroom of the British bicycle brand of the same name, fan Julian Horsfield spoke enthusiastically about the company’s past.

Horsfield, who owns 63 vintage Raleighs, described the excitement of tracking down rare versions of the Chopper children’s bike from the 70s and 80s. “They’re in all of the original production,” she said.

Despite this august cycling heritage – Raleigh was founded in 1887 and during its mid-century peak it was producing 1 million bikes every year in Nottingham – the company staked its future on a niche and premium segment of the market.

Owned by the Netherlands Group Accell, Raleigh still makes a few vintage-style machines and kids’ bikes. But there are signs that a decision to focus on e-bikes — whose electric motors assist pedaling — and cargo bikes, with large front hoppers for children OR goodsis starting to bear fruit.

Accell, which bought Raleigh in 2012, shifted strategy towards e-bikes and cargo bikes about five years ago.

The company expects to sell more electric-assist bikes than purely mechanical machines for the first time this year. While it doesn’t disclose its total sales, industry data suggests that 40 percent of the approximately 45,000 machines Raleigh sold in 2022 had electronic assistance.

The challenge now is to convince consumers who associate the brand with very different models to spend more than £1,000 on new offerings. The difficulty is increased by an acute decline in bicycle sales After many people bought them during the blockade.

“We believe this is the next evolution of Raleigh as a brand,” said Lee Kidger, managing director of Raleigh UK. “We believe electric bikes and electric cargo bikes are the future.”

Carlton Reid, a sustainability journalist specializing in cycling issues, said the move to more practical machines made sense for Raleigh. But he warned that UK bike sales volumes have fallen sharply after a boom during the Covid lockdowns. “It’s a turbulent market,” Reid said. “The crash was bigger and probably steeper than people thought. The bicycle trade has not recovered.

Models in the Nottingham showroom included an Array e-bike selling for £1,199 and a Stride cargo bike retailing for £4,395. However, Raleigh’s new niches are so far weathering the market downturn.

UK e-bike sales were 4% lower in 2022 than a year earlier, according to the annual market report by the trade body the Bicycle Association. But that compares with a 22 percent drop — to 1.88 million units — in sales of purely mechanical bikes. After two years of rapid growth, even 155,000 e-bike sales in 2022 were still 74% higher than 2019 levels.

Raleigh holds about 11% of the UK electric bike market, according to Kidger.

The company relies on its strong name recognition with UK consumers to compete against a range of competitors, including Taiwan’s Giant and big US brands like Trek and Specialized.

Accell was listed on Euronext when it bought Raleigh, but it was taken private in 2022 by a consortium led by KKR, the US private equity firm. The deal valued the company’s equity at €1.56 billion.

Meanwhile, the Bicycle Association estimates that between 8,000 and 10,000 cargo bikes were sold in the UK last year, while some retailers report annual unit sales growth of up to 40%.

According to Kidger, Raleigh captured around 5% of UK cargo bike sales in 2022, while Santae, another Accell group brand, captured 10%.

While Accell won’t disclose separate results for the Raleigh brand, data presented to Companies House shows the company made £2.82 million in pre-tax profit on sales of £74.5 million in 2020, the year most recent for which figures have been presented.

The Raleigh brand has been a boon in selling e-bikes and cargo bikes, Kidger said, because the brand had particularly powerful associations for those over 50 who are more likely to buy e-bikes.

“The Raleigh brand can continue to lead us forward, especially when you look at the age demographic of people buying electric bikes,” he said.

The focus on two niche areas might have seemed like a setback for Raleigh. A Dutch cyclist, Joop Zoetemelk, won the 1980 Tour de France on one of his bikes and generations of British cyclists have grown up hardly realizing any other brands were available. Its racing and touring bikes had a solid reputation for quality in the United States.

However Kidger said that a review of Accell several years ago determined that there was no prospect of the company competing to sell “mass-market bikes.”

“We scrutinized it in 2017-18. . . and that has further developed into a much narrower strategy in terms of premium electric bikes,” she said.

Like the e-bikes, the company’s cargo bikes also feature electric assist. Although Raleigh maintains a design facility in Nottingham, the bikes are now all manufactured at Accell factories in mainland Europe, many at a specialist e-bike facility near Budapest, Hungary.

Yet Raleigh doesn’t feel capable of neglecting loyal and nostalgic fans altogether.

Horsfield, from York, and twenty other enthusiasts were in the Nottingham shop for a preview of a new retro product whose details remain confidential.

Kidger acknowledged that the margin on those models was “not huge.” “We do them as a brand activation, rather than a way to make money,” he said.

That nod to the past, however, was gratifying for another Nottingham aficionado, Michael O’Reilly, chairman of the annual Raleigh Chopper Show, which celebrates a popular type of children’s bike.

O’Reilly said he recognized Raleigh’s retro range was not “the be-all and end-all”.

“Obviously, I appreciate that e-bikes and cargo bikes in terms of active travel are necessary and essential,” he said. But, she added, she was happy the brand respected its past. “I think it’s great that Raleigh has finally recognized the heritage element,” O’Reilly said.