Sales at cycles etailer Chain Reaction boomed last year despite profits being hit by investment in extra staff.
Turnover was up almost 25% to £136.5m in the year to December 31, 2011 and the retailer expects 2012 to have been a strong year due to an uplift in sales generated by Olympics fever. Pre-tax profits fell to £7.4m from £9.5m in 2010 as it invested in staff levels and new warehouse management systems
Chain Reaction is actually considerably larger than its arguably better known rival Wiggle. The former clocked up sales of £109.4m in 2010, compared to Wiggle’s turnover of £86m in the year to January 31, 2011
The company calls itself the “world’s largest online bike store” and continues to be owned and managed by the founding Watson family
George and Janice Watson founded the business in 1984 when they established Ballynure Cycles in Ballynure in County Antrim. The business moved to larger premises in Ballyclare in 1989, with the name of the shop changing to Ballyclare Cycles. At the end of the 1990s, the company closed the shop to focus exclusively on selling online under the Chain Reaction Cycles brand
The first ever sale was a chain link sold for 11p
The etailer operates one store, after returning to its roots and opening a 10,000 sq ft stand-alone shop in Belfast last year. The Belfast store features in-store online ordering for next day delivery, a ‘chill out’ lounge and bike maintenance courses. Online pricing is applied. Further store expansion is on the cards for Chain Reaction, with the retailer hiring property agent Savills last year to consider possible locations
The etailer suffered a minor setback in 2008 after its new warehouse extension in Ballyclare was flooded by a nearby stream that had burst its banks. Some stock was damaged and had to be sold in a special ‘Flood Sale’ in November 2008
Chain Reaction is the Royal Mail’s largest customer in Northern Ireland and Parcel Force’s largest export account
The etailer delivers all over the world and, reflecting its international customer base, the website can be displayed in English, Spanish, German, French, Italian, Portuguese, Japanese and Russian
chainreactioncycles.com is reported to get around 1.5 million hits per month
The company has a fairly high profile in some of its international markets. In Spain, for example, local bike dealers established an anti-Chain Reaction Cycles website in early 2011, which has been highly critical of the company’s low prices. Criticism has also been on the rise from local cycle retailers in Australia and the US, who claim that Wiggle and Chain Reaction Cycles have an unfair advantage by being supplied directly by manufacturers rather than through distributors
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