Bicycle Market Weakness Due to Oversupply of Mass Retailers’ Private-Label Products and Unsettled Weather

「The category performed exceptionally well during the COVID-19 pandemic as stay-at-home demand increased sales of both indoor jungle gyms and bicycles, but struggled in the current period as consumer spending patterns changed. In addition, as noted above, the suspension of sales of certain bicycle products due to recalls also affected sales.」

「The category performed exceptionally well during the COVID-19 pandemic as stay-at-home demand increased sales, but struggled in the current period as consumer spending patterns changed. In addition, as noted above, the suspension of sales of certain bicycle products due to recalls also affected sales.」

「Indoor play equipment and bicycles continued to have a certain level of standard demand, but both were significantly affected as consumer spending shifted toward leisure, resulting in lower sales.」

「Sales were down 20% from the previous fiscal year, reflecting the loss of the surge in demand during last year’s COVID-19 pandemic.」

「In the third quarter, the temporary surge caused by the previous year’s COVID-19-related exceptional demand had settled down in this category. In October, two new colors were added to the ケッターサイクル series for the Christmas selling season: Cosmos Pink for the 14-inch model and Sapphire Blue for the 16-inch model. The products got off to a strong start, with customer-specific orders placed through catalogs even before launch.」

「Although the category has settled down without the exceptional demand seen last year, products such as the Kickle bicycle launched in April of the current period were featured in the media at launch and sold well, resulting in steady sales for the series as a whole.」

「However, in this category, signs have emerged that the exceptional demand seen last year as people refrained from going out is subsiding, and the trend is expected to decline sharply from last year, creating a difficult situation.」

「The play equipment and vehicles category was affected more than any other by restrictions on going out during the COVID-19 pandemic and made a major contribution to sales growth in the current period.」

「Even after restrictions on going out were lifted, the play equipment and vehicles category continued to sell far better than expected. Shipments of the standard products 白いわんぱくジム, priced at ¥19,800, and ケッターサイクル, available in various models at open prices, substantially exceeded the previous year despite repeated stockouts and replenishments, making a major contribution to sales growth in the quarter.」

「The play equipment and vehicles category performed extremely well as people refrained from going out, and orders for the standard indoor play equipment product 白いわんぱくジム, priced at ¥19,800, surged, particularly through online retailers. ケッターサイクル bicycles also saw strong demand, including an increase in customer-specific orders.」

「In the play equipment and vehicles category, 白いわんぱくジム, a long-established indoor play equipment product priced at ¥19,800, benefited from a successful package redesign during the current period and was re-expanded at major mass retailers, contributing to sales growth in the category.」

「In the bicycle division, ケッターサイクル, which continues to sell well at an open price, has continued to attract expectations from distributors even one year after its launch, with new stores actively creating dedicated displays and holding test-ride events.」

「The bicycle category’s sales growth during the cumulative second quarter was driven by the strong performance of ケッターサイクル, which had not existed the previous year and is available in various models at open prices.」

「For bicycles, sell-through of ケッターサイクル increased alongside its expanded retail distribution, and word of mouth spread.」

「The bicycle division launched 11 new products simultaneously in October. In particular, the four-model ケッターサイクル line attracted considerable attention, expanded its retail distribution, and drove sales from the third quarter onward through increased sell-in volumes.」

「The Company’s core toy and bicycle businesses also remained sluggish as reduced Golden Week foot traffic, extreme heat and torrential rain in western Japan coincided.」

「In the play equipment and bicycle division, bicycle sell-through has recovered slightly and is showing signs of recovery, but shipments remain slightly below the previous year.」

「In addition to the overall market downturn, the growing popularity of balance bikes, which expanded rapidly from the previous year into the current period, reduced the number of children’s bicycles purchased and affected sales in the Group’s bicycle division, which had been strong the previous year.」

「The third quarter is normally the peak autumn selling season for the bicycle division, but during the current period, prolonged rain, typhoons and other factors slowed the market as a whole, delaying its recovery.」

「The Company’s bicycles and other practical products likewise remained in a situation in which market inventories at the end of the previous fiscal year were being worked down during the second quarter, becoming a major factor behind sluggish domestic sales.」

「In the bicycle division, conditions reversed from the same period of the previous year, and by April of the current period, a slowdown in sell-through across the market had become apparent. Major retailers launched sales promotions to stimulate consumption and expanded their ranges of standard children’s bicycles with lower-priced lines not seen in previous years, affecting sell-through of the Company’s products as well.」

「In bicycles, mass retailers increased their private-label product offerings in an effort to recover weak consumer demand, reinforcing the trend toward oversupply. In addition, unusually adverse weather occurred in September, the peak sales month of the third quarter, further depressing the overall market. The Company's proprietary product lineup, which had performed well in the first half, was also affected, with orders shrinking and sales falling well below the previous year during the third quarter.」