Consumers might use bicycles more often to save money when gas prices are high or the economy is weak, but that's little comfort to Lance Donnell, chief executive officer of Sinclair Imports.
"They're not riding $7,500 bikes to save on gas," says Donnell, whose Verdi-based company is the U.S. distributor for a couple of high-end bicycle manufacturers.
Instead, Sinclair Imports weathered the recession the old-fashioned way squeezing every nickel out of its costs, working closely with its bank, getting as close as possible to its customers.
Now Donnell says the 26-year-old company is positioned to take on another bicycle line or two, following its success with building the Argon 18 and Stevens bicycle brands in the United States.
The company is the exclusive distributor in the U.S. for the two high-end brands and also distributes parts and accessories to retailers.
Faced with slowing sales as the recession settled in, Donnell and Jim Mitchell, co-owner of Sinclair Imports, began whittling away at the company's costs.
A big move came as they ended contracts with national sales representatives who called on bicycle retailers.
"We've taken the responsibility for our relationship with our customers," Donnell says.
That, in turn, meant the company needed to be careful about reducing its staff.
Employing 17 people in 2004, the company today employs about a dozen. The reduction came through normal attrition, Donnell says, and the company maintained a rich benefits package to retain a quality workforce.
Some of the cost-cutting moves weren't as easy as they first appeared.
The company looked to tighten its shipping costs by use of seaborne container ships rather than airfreight for its imports of bicycles and accessories.
It saved on shipping, Donnell says, but longer delivery times meant the company needed more working capital because it its inventory was turning over more slowly.
"We really needed sufficient capital to run the business properly," Donnell says.
Nick Butler, a senior vice president with Umpqua Bank in Reno and a bicyclist himself, says the bank was impressed with the steps that Sinclair Imports was taking and helped develop the lending programs the distributor needed.
"They adapted. They responded appropriately," Butler says.
Along with shaping financial products to meet the company's changing needs, Umpqua Bank in late 2010 refinanced the 15,500-square-foot office and distribution facility the company owns in Verdi.
Now, Donnell says, Sinclair Imports is in position to expand its product offerings and is using its work with the Argon 18 brand during the recession as an example of the brand-building distribution that Sinclair Imports can provide to other manufacturers.
Since taking on the Argon 18 line in mid-2009, Donnell says U.S. sales of the Canadian brand "have been going straight up."
