Founded in 1926, Pashley Cycles is Britain’s longest established cycle manufacturer, designing and hand-building traditional bicycles and tricycles. Generating £5million annual turnover and about 8% net margin, the group, encompassing the Pashley and Moulton bicycle brands, employs around 70 people in total, with £4m revenues from Pashley and around £1m from Moulton. Over the last 5-6 years, their export turnover has grown from 15% to 45%, with USA and Japan being their most important export markets. There are about 160 products in the range, taking into account variations in frame size and colour. Women’s bikes account for half their sales and 75-80% sales are of traditional consumer bicycles, with carrier cycles contributing a further 20% of turnover.
All Pashley cycles are manufactured out of the company’s head office and factory in Stratford-upon-Avon. Moulton bicycles in the lower range of their price points, starting from £1000, are also produced at the Pashley site, with the upper end Moulton bicycles, retailing for between £4-16k, being made in Bradford on Avon, the traditional home of the Moulton brand. Around 85% of all Moulton bicycles are exported, primarily to the Far East.
95% of company sales are made via distributors. Pashley has recently introduced a new accessories range, being sold B2C directly via website channels. This covers bicycle accessories as well as ladies and men’s clothing collections, targeting the smarter rural and urban cyclist who is looking to combine work or leisure with a spot of cycling and prefers not to sport lycra in pursuit of this. The range includes practical but stylish ladies and gents trousers, jackets, shirts and T shirts, as well as prop stands, tyres, bells and pumps.
“We have about 70 items in this part of our range. Our objective with this has always been to start out carefully to ensure we have the systems in place to be able to service orders from direct selling, especially in the case of products specific to Pashley Cycles. Our tyres, for example, do tend to be in special sizes in certain areas within our cycle range,” says company owner and Chief Executive, Adrian Williams.
“We’re finding that by providing this range direct to our customer we’re getting quite an insight into their needs which we’d not had in the past through our dealers. Customers are going into bike shops and asking for certain parts which they cannot buy there and now they can come straight to us. We’re aware that dealers and distributors are keen to have our product, but we‘re still checking to ensure our supply chain can keep up with us and won’t let us down if and when sales really take off . It’s got us into the digital marketing side too, something quite new to us, as we now have our own Facebook page and have even started tweeting.
Education Business Collaboration
“We’ve collaborated in the past with Ben Hicks and Dr Jos Darling, Mechanical Engineering, University of Bath. We employed two Masters post graduates via KTPs to look at small batch manufacturing of quality products and instigating a test facility for assessing the integrity of our componentry. Both of these worked very well. We have taken on a couple of graduates from Birmingham City University and now we’ve started talking with WMG HVM Catapult, University of Warwick about specialist aspects of production.
“Of course, there’s been a growing interest in cycles recently, both in consumer and commercial areas. Whilst for us traditional Royal Mail work bikes have shrunk over the past decade from 50% to 5% of carrier cycle business as Royal Mail moved from bikes to trolleys, we’re now seeing a shift away from this trend. Other commercial users, for example TNT Post, are keen to use bikes and are now buying specifically-designed bicycles and spares from us. Less traditional providers like Amazon are also looking to move to cycle delivery and are very determined to muscle into this space. We’re also seeing a massive shift towards people using bikes for commuting, leisure and business use – for instance, food vendors and estate agents are using our cycles as the easier, quicker, cheaper and healthier way of moving around people and product.
STEM and Creativity
“In terms of how we as a business draw on STEM and creative skills, we see a great spectrum of skills that are important for us. With products, such as a bicycle or an accessory, there are different aspects to it. Technical aspects include strength, construction, design and sustaining use, as well as how it can be made. Alongside that is the aesthetic and whether the product will be appealing. It might do the job, but if it looks awful then people simply won’t buy it. It’s very difficult to find this combination in one person, so generally we need to have teams who can discuss these aspects together. Concepts can also come from individuals and we encourage our staff, whoever they are and wherever they work in our business, to come forward with their ideas. But the journey of taking idea through production to market needs quite a few others in place.
“I feel that we do miss the old apprentice approach. I did a four year sandwich degree when I was starting out as an aero engineer. I worked in lots of different departments, includi8ng commercial, composites, machine shop and wind tunnel. This gave me a great perspective into the wider business and how it all fitted together. I am convinced that it is really important for students to get out and into industry as well as working through the more academic aspects of their degrees.
“There has not been much involvement with other organisations in our business over the years. However, just recently I was given some support to exhibit overseas via ERDF funding. We have also just acquired some new premises in Stratford and, thanks to some timely information from UKTI, I found out that I could access a grant for 20% of the cost of expansion in our new premises.
“It is great to see government encouraging manufacturing at last. We are putting investment in for future growth but where are the people we need? We don’t have the feeder companies of semi-skilled and skilled workers that we require, such as brazers and welders – we are picking up these people but it has proven very difficult. We are just recruiting a production manager and are also looking for a Sales and Marketing person as we speak.
“We are still mulling over direct sales routes such as our own stores. Our dealerships do not generally do the best job of presenting our range, either in its entirety or how we would want it to be presented. We are a family-owned business and we embrace the customer, yet our dealers don’t tend to give them the service that they deserve. So yes, we are asking whether we can do this on our own, either online or through our own shops. We do think there is greater opportunity for collaboration across cycle brands in similar parts of the market, working together to ensure range breadth and depth in making any retail offer to our customers. The difficulty we have is that one range on its own could be too narrow to really have the necessary attraction for customers and therefore to make a retail offering viable. I am looking at the potential success of a factory shop and enhancing the factory experience, and I do have the added bonus of some space now.
“It isn’t easy making the bottom line, especially in an industry where copyists prove a challenge all the time. We invest into product design and development and then overseas producers come into the market with cost advantages whilst taking our ideas and designs.
“A top priority for government could be to look at this situation where you have an indigenous cycle industry that has gone from 100% capacity production to around 2% of its former size, then to explore if there is a way in charging duty on the 98% of bikes that are imported and for an element of this levy to be apportioned to independent producers. This could aim to strengthen sectors where companies are investing in design, development and people to ensure that we are able to keep investing in a craft and skills base appropriate to the 21st century.”
In recent years Pashley has drawn to a far greater extent on new product design and innovation. As the Royal Mail carrier cycle business has declined over the past decade, the company has brought to market more than 10 major new products, including the Guv’nor, Clubman, Poppy, Penny and the Aurora. They have their own design team of five people, including recent graduates from Art & Design at Birmingham City University.
Pashley Cycles has been dealing with many parallel challenges at the same time and all within a compact family business. They have had to contend with substantial changes in product sales makeup with the decline in Royal Mail work bikes, introducing at least five new ranges. They have challenges around the practical skills required, accessing finance, grants and business support – which has only been available on the off chance that they speak to the right people, hardly strategic. The most worthwhile support they have had has been working on knowledge transfer partnerships and on other projects with universities, gaining specific expertise and access emerging talent. For the UK to nurture its own ‘Mittelstand’ it seems the eco-system will need to be a great deal more robust, transparent and accessible.