COVID-19 sent a small Miami bike shop on a wild ride. Now a Christmas shortage looms
For Marcelo Penengo, running a small bike shop during a pandemic-induced boom in demand has been like flying down the gnarliest dirt trail ever devised, with ruts, sharp rocks and blind corners at every turn. Somehow he and his business have managed to defy gravity, stay upright and even get into the flow.
But the wild ride’s not over yet.
The next several months will present a strange and unexpected new twist in the road for Elite Cycling and its half-dozen employees, Penengo said: How to ride out the winter, typically the shop’s high season for sales, with hardly any new bikes to sell.
That’s because one of the pandemic’s improbable byproducts has been an off-the-charts spike in world demand for bikes, followed by the bike industry’s utter inability to keep up.
With no relief in sight, the resulting bike drought has Penengo worried he’ll have little to offer customers who come in looking for a kids’ bike or that dream carbon road bike for Mom or Dad for Christmas, a critical time for a business that runs on small margins.
“There is no inventory,” Penengo said. “That’s becoming a very serious issue, and I’m very concerned.“
For Penengo and his shop, it’s only the latest turn in the pandemic’s cycles of feast or famine.
First the COVID-19 pandemic shut down Elite, which occupies a warehouse space just north of The Falls, when Miami-Dade County ordered non-essential businesses to close. Thinking his business was done for, Penengo locked the doors and sent all his employees home on furlough.
But soaring demand for bikes from shut-ins desperate for exercise and recreation brought the crew back with a roar. Then, when the world’s supply of bicycles began to dry up, it was unrelenting demand for repairs from people looking to revive old clunkers that came to Elite’s rescue, making up for the drop in bike sales.
Today, eight months into a pandemic now thought to be entering its third, and potentially worst wave, the demand for bikes and parts has only somewhat eased, Penengo says. Yet the supply of both remains critically short.
It’s not going to get any better anytime soon. Makers of bicycles and parts are warning the shortage will last well into 2021, and possibly into 2022. The main brand Elite sells, Specialized, which produces a wide range of bikes, has already announced it’s totally sold out of its 2021 models, Penengo said.
Larger stores with big cash flow have been able to snag much of the supply that is available because they can pay up front or have ample credit, leaving smaller shops like his in the lurch, Penengo said. Jamis, a smaller company whose bikes Elite has long carried, has helped fill the gap to some degree on sub-$1,000 casual rides — the most in demand. But the bikes come in a trickle of small, unpredictable batches and sell quickly, he said.
“If someone bigger than you took the whole batch, well it’s tough luck.” Penengo said. “It’s gonna hurt our overall sales, no question.”
Right now, Penengo said he has about 10 newly arrived bikes, several of which will go to customers on a long waiting list. The rest are kids’ bikes he will set aside to try to build a Christmas inventory.
Even if the expected crunch doesn’t threaten the shop’s survival, it puts him in a difficult spot: He may need to cut expenses, but that’s principally his employees. And not only doesn’t he want to let them go, he can’t afford to. He said he needs his two mechanics and his sales people to keep the revenue flowing — and all of them to pitch in to work into the night assembling bikes when shipments do come in.
Even if Santa doesn’t make his usual appearance this year at Elite, Penengo said he’s determined not to let that spoil any of his employees’ — or his own — Christmas.
“It’s a balancing act with the cash flow. We have to be careful,” he said. “The bottom line is, we’re already running thin, and I don’t have room to cut anybody.”
In the meantime, Penengo continues to adhere to strict protocols for the shop. Few customers are allowed inside, and most of the shop’s customer service, including bike pick-up and drop-off, takes place under a temporary tent at the back door — masks required. At first some customers groused, he said, but now most accept the rules, and it hasn’t hurt sales or service, he added. He and his employees have all remained healthy and uninfected, Penengo noted.
And with a potentially deadly third wave now gathering, he said, he’s not about to start taking risks.
“People were like, ‘When you going to fully open?’ And I’m like, “Nothing has changed since this started.’ I discuss it all the time with my staff, and we all feel it’s the safest way we can handle this,” Penengo said.
“It’s seldom now you have someone who doesn’t get it.”
Elite Cycling, 13108 S Dixie Highway, Miami. 786-242-3733; elitecycling.net
This story was originally published November 16, 2020 at 7:00 AM.