Bike firm aims to set the Pace

THERE was a time, not so long ago, when the mountain bike was almost as much a fashion accessory as the designer-label training shoe. But crazes are ephemeral. Demand began to plateau two years ago.

For a company that rode to profitability by inadvertently climbing aboard the right product at the right time, there is a constant pressure to innovate and diversify.

Duncan MacDonald and Adrian Carter, co-directors of Pace Cycles, are well aware of that. Hence their heavy investment in research and development. Hence their launch of Racewear high-performance clothing for cyclists, voted product of the year in a special-interest magazine.

There is, though, still plenty of mileage left in mountain bikes, in particular at the top end of the market. "They were the saviour of a cycle industry which had become unexciting and unsexy," says Mr MacDonald. "Even today they account for 60 per cent of cycle sales worldwide." British race championship meetings still attract more than 1,000 entrants.

It was racing of another kind that brought Messrs MacDonald and Carter together. They were both keen off-road motor-cyclers. An aversion to jogging led them to seek another form of get-fit training. That led them to a cycle shop in Leeds, from which they emerged in 1983 with a mountain bike apiece.

They were not impressed. Particularly Mr MacDonald who was then running a small engineering company from a converted barn alongside his cottage in North Yorkshire. "It seemed incredibly agricultural to me," he recalls, "like a heavy touring bike with knobbly tyres."

A business proposition began to form in his mind and the two men formed a company in 1987. Two years after that they took the prototype of their ideal bike to the Cyclex exhibition at Olympia in west London where it won awards for the best new product and the best designed product.

On the face of it they made an ideal partnership: one engineering the product, the other projecting it. There was just one problem. They were working 80 miles apart. The business finally came together in one unit in 1990 when they bought the premises of a bankrupt agricultural engineering company. They now have 7,000 sq ft at Great Edstone on the edge of the North Yorkshire Country Park. Turnover is around pounds 1.2m and they employ 15 people.

But the partners recognise that the company is at a crossroads. Already they have taken the difficult decision to sell parts rather than complete bikes. "Top racing cyclists have their bikes made to measure," says Mr MacDonald. "So why not apply that principle to mountain bikes? As it was, we were constantly stuck for parts. The supply could not meet the worldwide demand. Now we concentrate on frames, forks and hubs." Pace has set up a network of specialist dealers and distributors throughout Europe. The United States market beckons but it is a tough nut to crack.

"We sell around 5,000 suspension forks a year in the UK, more than anyone else," says Mr MacDonald. "But Rock Shox [from California] is selling 6,000 pairs worldwide every week. Our next step is to try to increase our market share by pushing our name in racing. To do that we would need sponsorship from a big company."