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Business cycles: a history of Raleigh

Raleigh was the largest manufacturer of bicycles in the world throughout much of its history.

Frank Bowden establishes the business
Frank Bowden (1848 – 1921) was the son of a Bristol manufacturer. He trained as a lawyer, and went to Hong Kong to make his fortune.

Bowden was successful, but the Asian climate had destroyed his health by 1886. 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 health was much improved, and his commercial interest was roused.

Bowden entered into partnership with the Raleigh manufacturers, who manufactured two to three bikes a week from a small shop in Nottingham, in 1888.

The Raleigh Cycle Co was registered with a capital of £200,000 in 1896. By this time the business was the largest bicycle manufacturer in the world.

Frank Bowden went overseas to promote export sales. Whilst he was away the company floundered. Bowden returned to England and retrieved his son,  Harold Bowden (1880 – 1960), from university to help him reorganise and manage the business.

Frank Bowden acquired full control of the business from 1908.

1,700 workers produced over 60,000 cycles every year by 1913. Harold Bowden was responsible for day-to-day management of the business by this time.

During the First World War the company voluntarily offered its factories to the government to manufacture munitions. Frank Bowden was made a baronet in 1915 in recognition of his service during the war.

Raleigh was one of the largest munitions manufacturers in Britain by the close of the conflict, with a workforce of 5,000.

Harold Bowden succeeds his father
Sir Frank Bowden died in 1921 with an estate valued at £475,000. Harold Bowden inherited the entire business.

Sir Harold Bowden (1880 – 1960)

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

Unable to find suppliers to furnish it with components of sufficient quantity and quality, Raleigh became a vertically-integrated business, manufacturing every part at its Nottingham site apart from tyres and chains.

During the General Strike of 1926, 800 Raleigh workers joined in sympathy. Following the strike, Bowden introduced a profit-sharing scheme for his workforce. He wanted his employees to be proud to work for Raleigh, and believed it was essential to afford them fair treatment.

The brand and design rights of the Humber Cycle Co were acquired in 1932. The Humber cycles functioned as a premium alternative to the Raleigh brand. All production was centralised at Nottingham.

Raleigh had been overtaken in sales by the Hercules Cycle Company of Aston, Birmingham by 1933.

Sir Harold Bowden retired as managing director of Raleigh from 1938, but remained as chairman.

The war and post-war period
The Nottingham factory and it’s 9,000 employees were engaged almost entirely in producing munitions during the Second World War.

The post-war period was to prove difficult for Raleigh as it took time to rebuild the business after the war. The company had expected to enjoy the post-war consumer goods boom, but the rise of the car had a negative impact on sales. However the business had an output of one million bicycles by 1953.

Sir Harold Bowden retired as chairman in 1954.

Raleigh acquired the bicycle subsidiary of BSA of Birmingham in 1957. Production was consolidated at Nottingham.

Raleigh pioneered moped production in Britain in 1958.

Takeover by Tube Investments
Raleigh was subject to a friendly takeover by Tube Investments for £10.8 million in 1960. This represented a merger of the two largest bicycle manufacturers in Britain, which together held 80 percent of the domestic market.

Tube Investments consolidated all production at Nottingham from 1961.

Raleigh merged with Moulton in 1967, 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.

Raleigh was the only major British producer of mopeds, but abandoned the market to foreign rivals such as Honda in 1969.

Raleigh had a 67 percent share of the British cycle market in 1972, while foreign imports had a mere nine percent share.

Cycle sales in America boomed in the early 1970s, and Raleigh cycles, 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. Raleigh employed 8,800 people by 1975.

Ian Phillipps was appointed chairman in 1974. The finance director informed him that the Nottingham site was “the biggest white elephant in Britain”. Phillips reduced a product line of 7,000 different bicycles to around 1,000.

Raleigh had a production capacity of two million cycles a year at Nottingham in 1979, and employed 7,500. Together with other factories both in Britain and overseas it produced a total of four 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.

Foreign rivals had captured a 36 percent share of the British cycle market by 1981, and 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.

Following three years of consecutive losses and after reducing the workforce to 1,800, Tube Investments sold Raleigh to Derby International for £18 million in 1987. Derby’s timing proved fortuitous as mountain bikes began to enjoy strong sales growth.

Peugeot sold its loss-making bicycle arm to Derby in 1989.

The lease on the Nottingham factory expired in 2003. Raleigh relocated production to the Far East, which reduced manufacturing costs by 25 percent. The bikes are still designed in Nottingham. The company sold 850,000 bikes and employed 430 staff in 2011.

Raleigh was sold to Accell for £62 million in 2012.