Online bike shop riding high on £13.3m profit
A family business which grew into the world’s biggest online bike store after starting as a village shop has revealed pre-tax profits of £13m in its latest accounts.
Chain Reaction Cycles in Ballyclare sells bikes, bicycle parts and accessories through its website for shipping around the world and recently opened a shop in south Belfast.
According to a directors’ report and financial statements, pre-tax profits for Chain Reaction Cycles Ltd grew from £8m to £13.3m for the year ending December 2010.
The accounts also show turnover rose by 40% to £109.4m. Another 75 staff were recruited so that it now employs 365 people. Average spend per order also grew slightly to almost £84. There were 1.3m orders, up from 0.9m in 2009. The business has five promises to customers, including only selling quality products and aiming to dispatch goods on the day they are ordered.
A second firm, Chain Reaction Cycles Retail, has now been set up to manage Chain Reaction shops, with the first opening last month on Boucher Road in south Belfast.
Overall, the directors’ report is optimistic about the company’s future. “The cycling industry is currently in good shape, benefiting from a positive image and technological advances despite very difficult economic circumstances elsewhere.”
They said “emerging markets” would be targeted for more growth, with the website now featuring multi-language and multi-currency options to make it easier for overseas customers to use.
The firm’s history began in 1984 when George and Janice Watson set up a small bike shop called Ballynure Cycles in the village of the same name.
In 1989 they moved to bigger premises in Ballyclare and changed the name to Chain Reaction Cycles.
Their son, Chris, started out by sweeping the shop floors and later ensured the shop’s stock reflected new trends in cycling, like mountain-biking. Two years into a university course, he left to concentrate on the family firm and developed its mail order side, eventually setting up a website — www.chainreactioncycles.com — in 1999.
Mail order has the firm the Royal Mail’s biggest customer in Northern Ireland.
Founders George and Janice remain directors of the company, along with Chris. His sisters, Lola, Sabrina and Georgia, also work for the family firm.
Story so far
Their business now features in the Belfast Telegraph Top 100 Companies and the Watson family, who run Chain Reaction Cycles, appeared in the Sunday Times Rich List this year with a fortune of £75m built on retail of bikes and accessories. In 2006, managing director Chris Watson told the newspaper the firm had funded its growth through cash flow and not outward investment. But he said the company did not take its success for granted. “If you’re not expanding, then you’re sitting still.”