Pedal Group says it has shaken off the post-Covid blues and is heading for profitable year

A boom in electric bikes and scooters, as well as finally reducing its huge overstocking issues, has Australia's largest bike retailer back in the rider’s seat.

After riding in the Covid-19 boom’s cycling slipstream, Pedal Group chief executive Andrew Garnsworthy says they company is recovering from the post-pandemic blues thanks to the electric bike craze.

Pedal Group owns bicycle retailer 99 Bikes and Mr Garnsworthy said the Covid-19 lockdown sparked a bicycle boom as people sought an escape from lockdown doldrums.

But that changed when life returned to normal, leaving the group overstocked with too many bikes in its warehouses.

Backed by Flight Centre, the Brisbane-based company posted a loss in the 2023 financial year of $12.4m, which was well down on the $23.7m profit a year earlier.

However, Mr Garnsworthy expects the company to post a profit in the 2024 financial year.

“Our post-Covid slump was largely driven by overstocking challenges. We were ordering bikes too far in advance and when lockdown ended things went back to normal,” he said.

“We had a post-Covid hangover with stock that was quite bad 12 months ago but now it’s just a mild one and there’s still some patches of overstocking, however it’s nowhere near as bad.

“We are profitable and we are clawing back our margins.”

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Pedal Group’s Andrew Garnsworthy goes through safety steps with daughter Chelsea.

A Brisbane Boys College old boy and University of Queensland graduate, Mr Garnsworthy is an accountant by trade and has been in the Flight Centre/Pedal Group world for 20 years.

Before becoming Pedal Group chief executive he was 99 Bikes general manager after a 10-year stint at Advance Traders, and for a time a Flight Centre executive.

A father of three and a keen triathlete, Mr Garnsworthy’s pivot from the finance side of business to management was a matter of being in the right place at the right time.

“I was chief financial officer at Flight Centre from 2005 to 2008 and that was the same time Flight Centre and the Turner family kicked off 99 Bikes that became the Pedal Group,” he said.

“So I was going down a finance career path but I was very happy to take the opportunity to start with a small business which has now become the biggest bike retailer and bike wholesaler in Australia.”

Mr Garnsworthy said store sales were up and electric bikes were the main driver as their sales soared by 174 per cent on a year-to-date basis compared to pre-Covid.

“Electric bikes are our biggest growth category. There has been a massive growth in the e-bike category throughout the bike industry,” he said.

“We’re also seeing demand for e-scooters, which is a small but growing category.”

Year-to-date sales through 99 Bikes stores in Australia are up 6 per cent and year-to-date sales per store are up 54 per cent compared with pre-Covid levels.

Pedal Group currently has about 750 staff and there are 62 stores in Australia and New Zealand, seven in the US and four in the UK.

“Historically we opened five to six new stores a year over the last 15 years. During Covid and post Covid we consolidated, and there has not been any store growth for a couple of years,” Mr Garnsworthy said.

“The strong part of our business is Australia but in New Zealand and the UK we are in a turnaround consolidation phase.

“We closed three stores in New Zealand this year and we have two store closing in the UK where the market has been hit hard and there is a lot of competition.

“But in the 2024 financial year which are opening two stores in – Perth and Pimpama – and in the 2025 financial year will go back to five or six opening a year.”

Pedal Group is unlisted and is about 47 per cent owned by travel agency Flight Centre, of which Flight Centre chief executive Graham Turner owns 22 per cent. His son, Matt, owns almost 15 per cent, while the other shareholders include employees.

As part of its ride-to-work initiative, 99 Bikes staff rode more than 336,000km in the 2023 financial year.

By nature an environmentally focused business, Pedal Group employees were at the core of its environmental, social and governance (ESG) push, leading its ride-to-work initiative during which 99 Bikes staff rode more than 336,000km in the 2023 financial year.

The company recently achieved a B Corp certification for its 99 Bikes retail stores and Advance Traders wholesalers in Australia and New Zealand – showcasing ESG performance on an international level.

“We’re very proud of our Pedal Group and 99 Bikes employees, communities, and our business for achieving B Corp recognition. B Corporations globally are industry leaders that use business as a force for good,” Mr Garnsworthy said.

“The B Corp framework will help Pedal Group improve over the long term and to be accountable to higher ESG performance standards.

“Our commitment to environmental and social responsibility has been part of our company setup, ever since we started in 2007.

“Matt Turner, the founder of 99 Bikes and the Pedal Group, had a vision of reducing city congestion, getting more people riding bikes, more cars off the road, and helping to reduce carbon emissions.

“While the B Corp certification is a great global recognition for the company across areas of

governance, workers, customers, community, and the environment – we know we have a long

road ahead to ensuring an ongoing commitment to improving our impacts.”