Helmet technology company MIPS reported a 46% drop in net sales year-over-year for the final quarter of 2022, reports Bicycle Retailer. For the full year, the business was down 7%.
This follows an overall 50% drop in helmet sales.
According to the CEO of the Swedish company, Max Strandwitz, “A drastic slowdown in the bicycle sector in the second half of the year had a substantial negative impact on sales in sports, our largest category.
Strandwitz, however, maintained that he was confident of a quick recovery, starting this year.
“We maintain our previous assessment that the bicycle market will begin to recover in the spring of 2023,” Strandwitz said. “Our assessment is still that over time there will be excellent growth opportunities and strong consumer demand in the bicycle category.”
MIPS stands for “Multi-Directional Impact System,” which the company manufactures to fit inside bicycle helmets and is designed to reduce damage from rotational impacts.
It’s not the only company to suffer from falling demand in the bike industry. Just this week, US high-end frame maker Parlee filed for Chapter 11 bankruptcy in the US, while Specialized recently laid off 8% of its workforce, or 125 people.
This is largely a result of increased demand during pandemic shutdowns, with consumers making the most of extra leisure time and nearly traffic-free roads around the world.
However, as the industry rushed to meet demand, producing and ordering as much as possible, demand in the post-covid world declined, a decline that was accelerated by a global financial crisis and the reduction that has resulted in disposable consumer money. .
Industry commentators are predicting that 2023 could be the year to buy a bargain bike, with overstocked retailers and suppliers slashing prices as they try to make room for this year’s new gear model. Besieged Specialized even took a tongue-in-cheek approach to things, hosting a “We overdid it” sale; cold comfort of course, to those who have been made redundant.
Likewise, there are predictions that 2023 will see the industry “settle down”, with a return to some sort of normalcy in 2024.