Huffy gets on bicycle again after ’04 crash

DAYTON, Ohio — Years after a bankruptcy refocused the company on its core of bicycles, Huffy Corp. has moved into new headquarters, increased hiring and again has what one analyst calls a “a solid share” of the U.S. market. Huffy ships products to 40 countries, has boosted its local workforce by 20 percent and is still hiring, looking for engineers and materials experts. The company is ready to launch a new Batch Bicycles line at a new price point next month, and is introducing bikes made of new materials, as well as electric bikes and batterypowered scooters and toys. These moves come after several years of the company maintaining a lower profile. “That has changed,” said Bill Smith, Huffy’s president and chief executive, in an interview at the company’s headquarters. “We are back.” The Dayton-based employees continue to oversee production of bicycles that long ago shifted overseas, even as design and engineering of those bikes re-

mained local. “Huffy is still a very relevant brand,” said Matt Powell, senior industry adviser in sports for NPD Group Inc., a Port Washington, N.Y.-based company that follows consumer trends. The Davis Sewing Machine Co., Huffy’s predecessor, moved from New York to Dayton in 1892 before the manufacturer found its stride as a bicycle maker in the 1930s. Decades of innovation followed as the company became a household name in America, dabbling in sports goods and other product lines, like lawnmowers and even gas station equipment. But the industry and the company were shaken in the 1990s when imports of massmarket bicycles from China surged. In 1998, Huffy closed its Celina, Ohio, production plant. “What we did was, we shrunk the business to the core, which is and always has been bicycles,” Smith said. “We’ve been on a rebuilding effort ever since, and I think we’ve done quite well in that regard.” In recent years, Huffy has more than doubled its market share and tended to its bottom line. Since January, Huffy has hired 25 new employees in the Dayton area, a 20-plus percent boost in payroll. “For a company our size, that’s pretty significant, because we moved into the building with 105 [employees],” Smith said. A 25-year veteran, Smith has been marketing chief, president and chief merchandising officer of the company, among other roles. Today, the landscape is challenging. Retail shopping habits have changed, and the demise of Toys R Us, the largest retail bankruptcy in history, means fewer outlets for Huffy bicycles. Families are smaller, and children don’t play outside as much as previous generations once did. Still, Smith said, “We prefer not to be spectators in a changing market. We prefer to be active participants. So we’re changing our business.” Those changes are many. They include the new Batch brand, which is aimed at independent bicycle retailers, a step away from big-box retailers like Walmart. Batch will have no minimum buy requirement for independent dealers and is priced in what Smith calls the “white space” — that region between inexpensive consumer pricing and more expensive models. “Huffy has a solid share in bicycles in the U.S. and has shown growth in recent years,” Powell said. “The move into [independent dealers] with more moderate products should be a winner.” Huffy is also exploring new materials, including a magnesium alloyw that Smith calls “a super lightweight material.” And the product line is being expanded to include battery ride-on vehicles for children and electric bikes. Huffy is also stepping into new markets, preparing to contend in the European Union. “It’s a broad effort to kind of reshape the business,” Smith said. The company went into Chapter 11 bankruptcy in 2004 after losses hit $7.5 million in 2003, up from $1.4 million in 2002. For a year, the company did not file quarterly reports. Even then, company leaders said Huffy would rebound by focusing again on bicycles. Smith declined to share precise revenue figures for the privately held business, but he said the trends have been positive. “For several years after the bankruptcy, we kept a deliberately low profile,” he said. “We were very focused on what we had to do, and we had limited resources in turning the business around.” This rebuilding effort began in earnest after the bankruptcy. “We feel we are carrying on the Huffman legacy,” Smith said, referring to the company’s founding family. “There is a history to this company that is tangible. And it’s local. And it resonates with people.”