Yet in the past two years Casket, a Leeds-based group which also makes clothing for BhS, has emerged as the second-largest bicycle maker in Britain, with 20 per cent of the market compared with Raleigh's 35 per cent.
Casket, which does not produce bicycles under its own name but under brand names it has bought, such as Claud Butler, Falcon and British Eagle, is not content with second place. 'Our aim is to become number one in the British bike market,' Joe Smith, Casket's chief executive, said.
The response from Raleigh, which since 1987 has been part of Derby International, is cool. 'We are aware of their intentions but would prefer not to comment,' a spokesman said.
Casket has shaken up the market to such an extent that there are even rumours within this close-knit and competitive industry that Raleigh might be for sale. This is strongly denied at Raleigh's Nottingham headquarters. 'Nothing could be further from our minds,' a spokesman said. 'We are very happy with the way things are going.'
Casket's aims are bold, given that the bicycle market is static. In the late 1980s the market pedalled happily on the back of the mountain bike boom, as well as increased emphasis on fitness and care for the environment. Sales rocketed from 1.5 million in 1985 to a peak of 2.5 million in 1989. They have declined to about 2 million a year for the past two years, valuing the market at around pounds 400m.
Casket must build its share by taking sales from others, such as Raleigh, Moore Large, an importer with 12 per cent of the market, and Peugeot, part-owned by the French car company, which has 7 per cent.
That Casket is in any position to attack Raleigh at all is testimony to the company's shrewd management. As recently as 1989, it looked like an old bicycle with a slow puncture. It was losing millions and struggling along with a ragbag of textiles and one bicycle business.
In January 1990, new management, led by Mr Smith, set about restructuring with gusto. Seven loss-making businesses were sold and three closed - mostly in textiles and toys.
Mr Smith had already noted the growth of Townsend Cycles, Casket's subsidiary in Lancashire headed by Steven Walsh. Mr Walsh had bought Townsend for just pounds 15,000 from the receiver in 1984 and turned it into a mass- producer with 11 per cent of market share, before selling to Casket. Following tips from Mr Walsh, who now heads Casket's bicycle division, Mr Smith started buying bicycle companies.
In February 1990, Mr Smith paid the receivers pounds 185,000 for British Eagle, the Welsh company founded a century earlier which used to make motorcycles under the Coventry Eagle marque.
In December 1991 Casket bought Falcon Cycles for pounds 1m from Elswick, the printing and packaging company. Falcon brought with it the Claud Butler and Holdsworth brand names.
Casket also made unsuccesful bids for Dawes, where it was outbid by the Dutch group Apag, and for Muddy Fox, where Mr Smith would not match the reputed pounds 1m offered by Sitac, the property and engineering group.
The Falcon and British Eagle deals gave Casket a portfolio of three manufacturers with half a dozen brands pitched at various parts of the market. Townsend, which sells about 200,000 cycles in Britain every year, is pitched at the lower end, with bicycles retailing at pounds 100 or less. British Eagle is at the middle and upper level and Claud Butler at the very top, with some bicycles retailing for as much as pounds 1,200.
This niche approach is in marked contrast to Raleigh's strategy. It too has bought brands, such as Triumph, BSA and Carlton, but has merged them into the Raleigh brand, only marketing under the specialist names occasionally.
Mr Smith said: 'I see Raleigh as the Ford of the bicycle business. They are big but there is room to take share beneath, above and right from them.'
So far the strategy has worked. In May Casket reported profits of pounds 2m on sales of pounds 70m in 1991. The cycle division reported sales of pounds 30m. The share price has risen from 19p to 33p so far this year. But if Casket is to catch Raleigh there are two areas it must work on: increased production and increased availability in retail outlets.
Production has been improved at Falcon since Casket took over. Thirty redundancies have reduced costs and production has been increased after better welding equipment and more efficient working practices were introduced. The company hopes to be able to double production to 100,000 cycles a year.
Falcon, which used to make only adult bicycles, thus ignoring 36 per cent of the market, now imports children's bicycles and hopes to sell about 35,000 this year.
Townsend Cycles, which produces 60,000 bicycles a year at its plant in Leigh, Lancashire, and imports 280,000 from the Far East, is looking at a new site for a factory with a capacity of 500,000 bicycles a year. It would enable Townsend to bring more manufacturing to Britain and reduce its reliance on imports.
So far Casket's growth has been achieved with a large hole in its distribution channel - it does not sell a single bicycle through Halfords, the UK's largest bicycle retailer, with a market share of 20 per cent, or 400,000 bicycles a year. The situation is a legacy of an old problem at Falcon, which used to supply Halfords until a fire in 1987 disrupted production and Halfords started buying elsewhere. 'We've been having some encouraging talks with Halfords and could now cope with the numbers they would demand,' Mr Walsh said.
In the independent sector, which still accounts for nearly half of the market, Casket hopes to gain access to more dealers which also stock Raleigh.
Raleigh, meanwhile, has not been idle. Although it failed to buy Peugeot's bicycle business, it bought a German manufacturer, Kalkhoff, and is building a new production facility in eastern Germany. Production at the Nottingham plant has been rationalised and Raleigh now makes fewer bicycles more profitably.
Views on whether Casket can outstrip Raleigh are mixed. David Collins of the Bicycle Association of Great Britain said: 'They have been growing rapidly but the question everyone is asking is how long they can keep it up.' But Steven Walsh and Joe Smith remain confident. 'No one is going to challenge Raleigh in terms of brand,' Mr Walsh said. 'But as a group we will sell more bikes than them in the next two or three years.'
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