Bike dealer shrugs off economy, shifts into W.D.M. expansion

Posted Nov 10, 2009
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Bike World's new 10,800-square-foot store will be in the Village of Ponderosa, a mixed-use development east of the Jordan Creek mall.

West Des Moines, IA By David Elbert photo: Des Moines Register Bike World owner Forrest Ridgway is taking a risk, again. Against a struggling economy, and as bicycle sales nationally are down 10 to 12 percent, Ridgway just committed to building a bigger store in West Des Moines. Bike World's new 10,800-square-foot store will be in the Village of Ponderosa, a mixed-use development east of the Jordan Creek mall. It will replace an existing store on Ashworth Road about 1 1/2 miles north of the new site. Groundbreaking is next week. He expects to move in next summer. Bicycle sales can be a tough business. The National Bicycle Dealers Association reports the average markup on new bikes is 37 percent, while the break-even point is 38.6 percent. That means most dealers don't sell enough bikes to cover their operations costs. The sale of accessories and clothing, which have a higher markup, is what keeps them in business. But Bike World is not most dealers. Ridgway has pedaled against headwinds before. A businessman doesn't become Iowa's largest bike dealer, selling more than 100,000 bikes in a 28-year career, without knowing what he's doing and occasionally taking a risk. The first risk Ridgway took was in 1979, when at the age of 21 and still in college, he opened Bike World. At the time, he'd already been repairing and selling bikes for six years, first at Bill's Cyclery on the south side and later for Doug DuBay, who sold toy trains and bicycles in Windsor Heights. After a year with DuBay, Ridgway made a half-joking offer to buy out DuBay's bike repair business. To his surprise, his boss accepted. "I didn't have any new bikes to sell," Ridgway said. So, he persuaded Nims Sporting Goods in Ames to let him sell through them. Ridgway's father, a home builder, co-signed for a $6,000 loan, and a new business was born. The first year, Ridgway continued to operate out of DuBay's basement. Then, he moved to a nearby storefront on University Avenue where he was for three years, until he bought a building at 2929 Merle Hay Road. The bike boom of the 1970s was well past by the time Ridgway started his business. The record year for U.S. sale of adult bicycles was 1973, when 15.2 million bikes were sold, according to the National Bicycle Dealers Association. The best year since then was 2005, when 14 million bikes were sold. By the end of the 1970s, sales had dropped to about 10 million. Sales bottomed at 6.8 million bikes in 1983, which is the year Ridgway bought the Merle Hay location, which served as a hub for his business for more than 25 years. It was also the year Bike World got a Trek dealership. During a biking trip to Wisconsin in 1982, Ridgway and his wife had visited the Trek factory in Waterloo, Wis., where he talked his way in the door and into a dealership. Today, Bike World is Trek's largest Iowa dealer. In fact, Ridgway is such a strong Trek dealer that when Scheels All Sport opened at Jordan Creek Town Center, Trek would not let the 10-state sporting goods chain sell its bicycles there, even though Scheels is the No. 2 Trek retailer nationally. Ridgway equates Bike World's early success with RAGBRAI, the Register's Annual Great Bicycle Ride Across Iowa. Des Moines Register reporters John Karras and Donald Kaul started the cross-state ride in 1973 with about 300 riders. On the second ride, "I went along as a 15-year-old kid, working at Bill's Cyclery," Ridgway said. By 1983, the ride had attracted 6,000 riders. While still a teen, Ridgway got to know Karras and Kaul. By the time he opened the store on Merle Hay Road, he knew all the key players, including Dr. Bob Breedlove. Ridgway sold ultramarathon rider Breedlove his first bike in 1982, and he later crewed for Breedlove before the orthopedic surgeon died in an accident during the 2005 Race Across America. Karras said Ridgway was a quick learner and an aggressive businessman. "Forrest genuinely projects the idea that he really cares about the people who come into his store," Karras said. "He's really positive. And if you have a problem, he'll do his darnedest to fix it." Des Moines lawyer Dwight James is one of Bike World's best customers, having purchased two bikes for himself and eight to 10 for his children and grandchildren. "I'd been riding a hybrid on RAGBRAI, and it was heavy and slow," James said. In 2000, he went to Bike World and "told them I wanted to be able to ride 3 or 4 mph faster (on RAGBRAI) because I was getting in at 6 or 7 at night. They put me on a carbon fiber bike and, sure enough, next year I was able to finish at 3 or 4 in the afternoon. A few years later, James visited the store because he was having trouble with a speedometer. He started talking about new technology and wound up purchasing a second carbon fiber bike, which cut even more riding time off RAGBRAI for the rider, now age 75. Ridgway said the key to his success is "having good employees and a good product line." Bike World opened a store in Ames in the late 1980s and one on the edge of West Des Moines in 1994. Last summer, Bike World's Des Moines store moved from its longtime location on Merle Hay Road in a 3,170-square-foot space into a former furniture store at 6600 Douglas Ave. with 12,500 square feet. The success of that move encouraged Ridgway to look for more space in West Des Moines. "We've outgrown the West Des Moines space," he said. "Our business is up a lot," despite the fact that statewide sales by bicycle specialty stores was basically flat at $17.3 million for the 12 months ended June 30, according to Iowa sales tax figures. The new Village of Ponderosa store has two advantages, he said. It is 80 percent bigger than the store on Ashworth Road, and it's in a neighborhood that was designed by developer Jon Garnaas for people with active lifestyles. Bike World's main business driver today is the eruption of bike trails that's occurred in recent years, he said, and the Village of Ponderosa is a bike-trail hub. "My first year in business, we sold $33,000 worth of product," he said. "We have bigger days than that now," Ridgway said.