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Pandemic-Driven Cycling Boom Pedals Argentine Bike Store to $1.5B Revenues

Goldenbike has opened 30 franchises in less than a year and plans to launch in the U.S., Chile and Uruguay

Photo: Goldenbike
April 12, 2022 | 02:55 pm

Buenos Aires — A decade ago, Maximiliano Minoli and Damián Pardal decided to open a bicycle shop in the Buenos Aires neighborhood of Villa Urquiza. Installed in a former vegetable store of 35 m2, they saw how the demand and the popularity of that means of transport was growing, and over time they were able to annex an adjacent store to continue growing the business.

But at the same time, in their heads they were thinking of an ambitious business plan that consisted of turning that first store into a chain of bicycle shops. Years went by and the idea became more and more established. But it was the pandemic and bicycles’ surge in popularity as a means of transportation that brought a boom, and their dream began to take shape.

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“The pandemic was crazy, with the demand for bicycles and the need for bike shops. People started to become aware of having a balanced, healthy life, and safe transportation with respect to Covid-19,″ Cristian Ceccherini, marketing manager of Goldenbike, says.

“We had only two stores of our own, but even before the pandemic we had the idea of franchising the brand, and the pandemic gave us the necessary push.”

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Photo: Goldenbikedfd

In mid-lockdown, after franchising the first store, everything began to ‘pedal’ very fast, with the company opening one store after another. Today, a year and a half later, there are already 30 franchises of the brand.

The same happened with the company. “The company grew as the demand grew and made the human resources part of the company increase a lot, which today already has more than 100 employees in total,” says the executive.

Although he acknowledges, “without the pandemic, I don’t know if we would have had that explosion. The pandemic helped to sell the first franchises and then continue with a rhythm of growth”.

The Business Model

Goldenbike currently operates throughout Buenos Aires. Each franchise has a cost of $20,000, and the investment in which is recovered after the first year of operation.

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The company estimates that the average annual turnover is $100 million per store, revenues that correspond to 80% bicycle sales and the remaining 20% to the workshop and repair segment. In terms of total turnover, its latest results show some $1.5 billion.

But as well as the increase in demand, there has been a large increase in the prices of bicycles. Ceccherini says the company’s advantage is that it buys in large volumes for all the franchisees, which allows it to have competitive prices compared to the rest of the market, generating a win-win situation for buyers and business partners.

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In addition, the company emphasizes that all franchises must comply with strict quality and aesthetic protocols, from the products they sell to their display.

Photo: Goldenbikedfd

“In this city alone, 405,000 bicycle trips were registered in 2020, so we believe that in 2021 that figure will have doubled; this shows us the huge potential,” Ceccherini says, adding that they are also testing their own bicycle brand.

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Freewheeling

For both Minoli and Pardal, there is still a long way to go, but they are not slowing down. For this year, they plan to grow 300% annually with a very strong expansion strategy: 60 stores in a conservative scenario, and 100 in a slightly more aggressive one.

At the same time, while already present in Buenos Aires (in La Plata, Olavarría) and in Mendoza, they plan to open stores in Santa Fe, Mar del Plata, Tandil and Córdoba, in addition to expansion to other countries, especially Uruguay and Chile, although the first big step outside the country will be taken in Miami.