Business cycles: a history of Raleigh

Throughout most of its history, Raleigh was the largest manufacturer of bicycles in the world.

Frank Bowden (1848 – 1921) had recently returned from Hong Kong, where he had made his fortune, but wrecked his health. His doctor suggested he take up cycling as a remedy. After six months spent cycling on a Raleigh bike in the South of France, his commercial interest was aroused.

Bowden entered into partnership with the Raleigh manufacturers, who manufactured two to three bikes a week from a small shop in Nottingham. Soon afterwards he took over the whole business.

Raleigh had grown to become the largest bicycle manufacturer in the world by 1896.

During the First World War, the company voluntarily turned over its factories to the government to manufacture munitions.

There were 2,000 workers by 1924, making 400 bicycles every day, and over 100 motorcycles a week.

By 1933 the company had been overtaken by the Hercules Cycle Company of Aston, Birmingham.

During World War II, the Nottingham factory and it’s 9,000 employees were engaged almost entirely in producing munitions for the war effort.

The 1950s were a difficult period for the company. It took time to rebuild the business after the war, but by 1953 one million bicycles were produced. The company had expected to enjoy the post-war consumer goods boom, but the rise of the car impacted sales.

In 1958 Raleigh pioneered moped production in Britain. It was the only major British producer of mopeds, but abandoned the market to foreign rivals such as Honda in 1969.

Raleigh was subject to a friendly takeover by Tube Investments in 1960. In 1967 Raleigh had a turnover of £21 million when it merged with Moulton, which confirmed its position as the largest bicycle manufacturer in the world. By this time the Nottingham site spanned 64 acres, and 70 percent of production was exported to 140 countries.

By 1971 Raleigh had a turnover of £25 million, and production was mostly exported. In 1972 the company had a 67 percent share of the British cycle market, while foreign imports had a mere 9 percent share.

In the early 1970s cycle sales in America boomed, and Raleigh bikes, with their reputation for high quality, were in high demand. As a result, Raleigh cycle sales rose 55 percent between 1970 and 1971, leaving the company struggling to keep up with demand. By 1975 Raleigh employed 8,800 people.

In 1979 Raleigh had a production capacity of 2 million cycles a year at Nottingham, which occupied 7,500 workers on a single site. Together with other factories both in Britain and overseas it produced a total of 4 million cycles annually. 60 percent of British production was exported and it had a 60 percent share of its domestic market. It remained the world’s largest bicycle manufacturer.

By 1981 foreign rivals had captured a 36 percent share of the British market. Raleigh’s share had declined to 45 percent. The company’s workforce had been reduced to 4.000. Raleigh was no longer vertically integrated, and instead imported all of its components apart from bike frames. Its capacity was 1-2 million cycles a year.

In 1987, following three years of losses and after reducing the workforce to 1,800, Tube Investments sold Raleigh to Derby International for £18 million. Derby’s timing proved fortuitous as mountain bikes began to enjoy strong sales growth. In 1989 Peugeot sold its loss-making bicycle arm to Derby.

By 2003 the Nottingham factory’s lease had expired, and the owner wanted to develop the site. Raleigh could have built a new factory, but instead decided to relocated production to the Far East, which reduced manufacturing costs by 25 percent. The bikes are still designed in Nottingham. In 2011 the company sold 850,000 bikes and employed 430 staff. In 2012 Raleigh was sold to Accell for £62 million.

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