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Owner's Balancing Act

Dave Hansen's goal is to keep expanding his Jax Bicycle chain, but he still tries to maintain personal contact with clients.

July 26, 2006|David Colker | Times Staff Writer

Clad in Spandex shorts, vented helmets and gaudy jerseys, serious road cyclists have become a common sight on Southern California byways. They also represent the fastest-growing segment of the $6-billion U.S. bicycle industry.

This biking niche has been fueled partly by the celebrity of Lance Armstrong and may get another boost from last weekend's Tour de France victory by yet another American, Floyd Landis of Murrieta.

But you won't find these bikes -- with their characteristic drop-down handlebars and thin tires -- in mass-market retailers such as Target or Wal-Mart. Instead, they are the province of traditional, neighborhood bicycle shops.

Dave Hansen used to own just one store, which made him the norm in the specialty bike world. According to a recent study by the National Bicycle Dealers Assn., 86% of dealers have only one store.

In 1993 Hansen bought a shop in Yorba Linda partly with funds he and his wife derived from winning "The Newlywed Game" on television. Although he had no previous business ownership experience and had twice dropped out of college, he had been working in bike shops since he was 15.

Not long after buying the store, he began to question the wisdom of the single-shop ownership tradition.

"I felt small," Hansen said, "like I could get sucked up by a bigger outfit if I didn't do something."

Hansen, now 45, began buying other shops as they failed or otherwise became available, borrowing against the assets he had at the time to raise the cash.

Today he has six stores in Los Angeles and Orange counties, including a Claremont shop he took over in April. Each of his stores is called Jax Bicycle Center, after a chain that he bought along the way.

His stores had combined sales of about $10 million last year, Hansen said, far surpassing the dealers associations' national average of about $644,000 per retailer.

In addition, Hansen's shops are generally much bigger than the 4,255-square-foot norm. His largest, in Fullerton, is about 10,000 square feet.

He carries a wide range of bicycles from Trek Bicycle Corp., one of the most popular makes. But he also dabbles in more exotic brands.

Manufacturer shipments of drop-bar road bikes increased 184% from 2000 to 2005, according to the Bicycle Product Suppliers Assn. The National Bicycle Dealers Assn. said that just over 500,000 of them were sold last year at an average price of $970 apiece.

In the Jax flagship shop in Irvine was a super-lightweight bike from Italian manufacturer Colnago that carried a price tag of $8,200.

Hansen's goal is to acquire five more stores in the next five years, including at least one outside Southern California.

But the more he grows, the less personal contact he can have with customers in each store.

"That's the challenge in this business that depends on personal service," said Fred Clements, executive director of the dealers association. "When you have the owner-operator on site, it's easier to develop long-term relationships with customers."

Hansen, who is gregarious to a high volume -- so much so that his voice practically fills the 8,800 square feet of the Irvine flagship store -- agreed with that assessment.

"The best thing about what I have done is that I now have six stores," he said. "The worst thing about what I've done is that I now have six stores."

The difficulty is compounded by the fact that he is obsessed with details. As he walks briskly through the shop, Hansen spots almost hidden, tiny scraps of paper on the floor and rushes over to scoop them up. While talking, he uses a hand to perfectly space out jerseys hung on a rack.

The general manager of Helen's Cycles -- which also has six stores and is Hansen's biggest local competitor -- said finding competent employees to take care of shops was a challenge.

"You get guys coming to work here who are passionate about bikes and they are in candy land," said Jay Wolff at the Santa Monica store. "But the question is: Can they also relate to customers?"

Helen's has more than 100 employees, most of whom are full-time, Wolff said. Jax has 89 employees, 69 of them full-timers, Hansen said.

The problem that Hansen has with not being hands-on in all locations came to the fore when he saw a customer leave because the store didn't have a certain model bike in stock.

"Did you tell him we would get the bike for him?" Hansen asked a salesman. "Did you get his name and number?"

Hansen ran over to the glass front door. "He's still in the parking lot. Go get his information."

The salesman came back a couple minutes later with the man's business card.

"That guy loves cycling, I heard him," Hansen said. "I want him as a client forever."

Specialty bike shops, whether single stores or local chains, are probably out of danger from mass retailer competition, consultant Ed Benjamin said. The big-box stores and membership clubs sell children's and other bikes for an average price of $70, according to the National Bicycle Dealers Assn.

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