Raleigh balances nostalgia with pragmatism in shift to electric

Standing in the “Experience Raleigh” store in Nottingham — the main showroom for the UK’s eponymous cycle brand — fan Julian Horsfield spoke enthusiastically about the company’s past.

Horsfield, who owns 63 vintage Raleighs, described the excitement of tracking down rare versions of Chopper children’s bikes from the 1970s and 1980s. “I’m into all the original production,” he said.

Despite this august cycling heritage — Raleigh was founded in 1887 and during its mid-century peak manufactured 1mn bicycles in Nottingham every year — the company has staked its future on a niche and premium segment of the market.

Owned by the Netherlands’ Accell Group, Raleigh still produces some vintage-style machines and children’s bikes. But there are signs that a decision to focus on e-bikes — whose electric motors assist pedalling — and cargo bikes, with large front hoppers for children or goods, is beginning to bear fruit.

Accell, which bought Raleigh in 2012, shifted the strategy towards e-bikes and cargo bikes around five years ago.

The company expects to sell more bikes with electric assistance than purely mechanical machines for the first time this year. While it does not disclose its total sales, industry figures suggest 40 per cent of roughly 45,000 machines Raleigh sold in 2022 had e-assistance.

The challenge now is to persuade consumers who associate the brand with very different models to spend more than £1,000 on new offerings. The difficulty is heightened by a sharp drop-off in bike sales after many people bought them during lockdown.

“We feel like this is the next evolution in Raleigh as a brand,” said Lee Kidger, Raleigh’s managing director in the UK. “We do believe that electric bikes and electric cargo bikes are the future.”

Carlton Reid, a sustainability journalist specialising in cycling issues, said the shift to more practical machines made sense for Raleigh. But he warned that UK bike sales volumes had sunk sharply after a boom during Covid lockdowns. “It’s a turbulent market,” Reid said. “The crash was bigger and probably even steeper than people thought it would be. The bike trade hasn’t recovered.”

The models in the Nottingham showroom included an Array e-bike selling for £1,199 and a Stride cargo bike retailing for £4,395. Nevertheless, Raleigh’s new niches are so far resisting the market downturn.

UK sales of e-bikes were 4 per cent lower in 2022 than the previous year, according to to the annual market report by trade body the Bicycle Association. But that compares with a 22 per cent decline — to 1.88mn units — in sales of purely mechanical bikes. After two years’ rapid growth, the 155,000 e-bike sales in 2022 were also still 74 per cent above 2019 levels.

Raleigh has around 11 per cent of the UK’s e-bike market, according to Kidger.

The company is relying on its strong name recognition with UK consumers to compete against a range of competitors, including Taiwan’s Giant and large US brands such as Trek and Specialized.

Accell was listed on the Euronext stock exchange when it bought Raleigh but was taken private in 2022 by a consortium led by KKR, the US private equity firm. The deal valued the company’s equity at €1.56bn.

Meanwhile the Bicycle Association estimates between 8,000 and 10,000 cargo bikes were sold in the UK last year, while some retailers are reporting annual growth of unit sales as high as 40 per cent.

According to Kidger, Raleigh captured around 5 per cent of the UK’s 2022 cargo bike sales, while Babboe, another Accell group brand, had 10 per cent.

Although Accell does not disclose separate results for the Raleigh brand, figures filed at Companies House show the company made a pre-tax profit of £2.82mn on sales of £74.5mn in 2020, the most recent year for which figures have been filed.

The Raleigh brand was an advantage when selling e-bikes and cargo bikes, Kidger said, because the marque had particularly powerful associations for those aged over 50 who are most likely to buy e-bikes.

“The Raleigh brand can continue to carry us forward, especially if you look at the age demographic of the people that are buying electric bikes,” he said.

The focus on two niche areas could have felt like a comedown for Raleigh. A Dutch rider, Joop Zoetemelk, won the 1980 Tour de France on one of its bikes and generations of British cyclists grew up barely realising other brands were available. Its racing and touring bikes had a strong reputation for quality in the US.

However Kidger said a review by Accell several years ago decided there was no prospect of the company’s competing to sell “mass-market bikes”.

“We took a strong look at it in 2017-18 . . . and that has just further developed into a much narrower strategy in terms of premium electric bicycles,” he said.

Like the e-bikes, the company’s cargo bikes also feature electric assistance. While Raleigh retains a design function in Nottingham, the bicycles are now all manufactured at Accell sites in mainland Europe, many of them at a specialist e-bike facility near Budapest in Hungary.

Yet Raleigh does not feel able entirely to neglect loyal, nostalgic fans.

Horsfield, from York, and around 20 other enthusiasts were at the Nottingham store for a preview of a new, retro product whose details remain confidential.

Kidger acknowledged that the margin on such models was “not massive”. “We do them as brand activation, rather than a way to make money,” he said.

That nod to the past, however, was gratifying for another enthusiast in Nottingham, Michael O’Reilly, chair of the annual Raleigh Chopper Show, which celebrates a famous type of children’s bike.

O’Reilly said he recognised Raleigh’s retro range was not the “be-all and end-all.”

“Obviously, I appreciate that the e-bikes and cargo bikes in terms of active travel are necessary and essential,” he said. But, he added, he was happy the brand was respecting its past. “I think it’s fantastic that at last Raleigh have recognised the heritage element,” O’Reilly said.