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The Pro's Closet cuts staff 15%

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The Pro's Closet cuts staff 15%

Old 10-17-22, 11:03 AM
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The Pro's Closet cuts staff 15%

https://www.bicycleretailer.com/indu...ces-workforce#

Ouch. Contraction in the used marketplace. Seems like everybody's cutting back.
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Old 10-17-22, 01:15 PM
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High priced bicycles, sold used at still high prices, mail order so you find out if you like it or it even fits after you buy and have it shipped...

Seems like the dearth of current production bikes for sale was the only thing that let it get as big as it did.
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Old 10-17-22, 02:01 PM
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Used stuff sold at a premium. I stopped shopping them some time ago... apparently I'm not the only one.
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Old 10-17-22, 02:04 PM
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I sent them info on a bike I wanted to sell. Carbon fiber, Ultegra 11 spd, carbon wheelset. They came back and said they didn't want it, because they had too many like bikes in stock.
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Old 10-17-22, 02:08 PM
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I would have hoped they would have first dropped prices by 15% to try to liquidize some over-stock, but I guess that isn't negotiable.
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Old 10-17-22, 02:37 PM
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Originally Posted by bargainguy
https://www.bicycleretailer.com/indu...ces-workforce#

Ouch. Contraction in the used marketplace. Seems like everybody's cutting back.
Was there an expansion of the used marketplace recently (due to COVID)?

Is this a "contraction" or a return to normal levels?
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Old 10-17-22, 02:39 PM
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Pro's Closet is funded by VC firms and has been growing rapidly since 2016. The S&P 500 is down 17% from a year ago. Inflation is through the roof. Bike retailers have been struggling with supply chains since 2020 and are now seeing inventory piling up as we head into winter.

This doesn't require an economics degree to figure out. The bike industry as a whole is about to get a bit rocky and I don't think this has anything to do with Pro's Closet's business model.
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Old 10-17-22, 02:41 PM
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Originally Posted by njkayaker
Was there an expansion of the used marketplace recently (due to COVID)?

Is this a "contraction" or a return to normal levels?
That seems like a distinction without a difference. I get what you are asking, but in the end they had hired employees and not just temporary or seasonal workers.
If there is an expansion, as you asked, then there is a contraction if numbers fall off. Its a contraction even if it returns to prior(normal, as you call it) levels.

There is no indication that the staff they are letting go was temporary or seasonal.
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Old 10-17-22, 02:47 PM
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Originally Posted by mstateglfr
That seems like a distinction without a difference. I get what you are asking, but in the end they had hired employees and not just temporary or seasonal workers.
If there is an expansion, as you asked, then there is a contraction if numbers fall off. Its a contraction even if it returns to prior(normal, as you call it) levels.
No, it's not. Many businesses saw hot markets due to COVID as the new normal (not as something temporary).

People losing jobs is not a good thing but, if the hires were due to COVID, the reduction isn't a surprise.

People bought lots of new bikes due to COVID and that wasn't going to continue either.
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Old 10-17-22, 02:52 PM
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Plus, workers are getting uppity and demanding living wages, so we need to have higher unemployment. Worker's increasing wages, unlike those of CEOs and senior-level execs, drives inflation.
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Old 10-17-22, 02:54 PM
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Fire sale covid bikes are starting to show up online...
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Old 10-17-22, 02:56 PM
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Originally Posted by njkayaker
No, it's not. Many businesses saw hot markets due to COVID as the new normal (not as something temporary).

People losing jobs is not a good thing but, if the hires were due to COVID, the reduction isn't a surprise.

People bought lots of new bikes due to COVID and that wasn't going to continue either.
It can be both a contraction and a return to normal levels. In that respect it is a distinction without a difference since either way its dropped.
They did not think this would be temporary and these were not seasonal employees so this is a surprise, even if the expansion was in part due to covid supply chain challenges and surplus economic spending.
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Old 10-17-22, 03:15 PM
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Originally Posted by mstateglfr
It can be both a contraction and a return to normal levels. In that respect it is a distinction without a difference since either way its dropped.
They did not think this would be temporary and these were not seasonal employees so this is a surprise, even if the expansion was in part due to covid supply chain challenges and surplus economic spending.
Sure, it could be both.

If it was hires due to COVID, then they shouldn't have been surprised: the "exception" was the hires (not the layoffs).

Originally Posted by mstateglfr
distinction without a difference"
Is one of those phrases that sounds more clever than it is.
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Old 10-17-22, 03:23 PM
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Originally Posted by prj71
Fire sale covid bikes are starting to show up online...
I have noticed Craig's list bike prices starting to be more reasonable lately.
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Old 10-17-22, 03:27 PM
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Originally Posted by njkayaker
Sure, it could be both.
If it was hires due to COVID, then they shouldn't have been surprised: the "exception" was the hires (not the layoffs).
Is one of those phrases that sounds more clever than it is.
All sorts of industries were surprised that numbers for interest/sales havent kept at high levels. The benefit of hindsight is strong in this instance. You sitting here saying 'of course it was bound to come down' with confidence of knowing you are right since its come down and will continue to come down doesnt mean their hiring at the time was an exception. The entire exercise industry was going to transform and shift to a new normal(<--talk about a phrase that sounds more clever than it is). That hasnt happened, clearly.

At the time and in the moment, consumer goods, transportation, financial markets, etc etc- all saw massive growth and companies absolutely thought they would capitalize on that surge and manage to sustain it.
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Old 10-17-22, 05:08 PM
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Originally Posted by mstateglfr
All sorts of industries were surprised that numbers for interest/sales havent kept at high levels.
This is particularly dumb. Expecting people would keep buying computers/pelotons/bicycle after buying them while stuck at home made no sense. There is no way people could sustain those purchase levels.

Originally Posted by mstateglfr
The benefit of hindsight is strong in this instance. You sitting here saying 'of course it was bound to come down' with confidence of knowing you are right since its come down and will continue to come down doesnt mean their hiring at the time was an exception.
It's not a "hindsight" issue anyway.

It should be clear to everybody now that there COVID exceptions and that there would need to be corrections. What's happening is that current layoffs/etc are being considered as exceptions when things have been cooling off for over a year already. It shouldn't be a surprise.

People should have seen the COVID exceptions as exceptions when they happened. The real take-away is that business people are not as smart as they sell themselves.

Originally Posted by mstateglfr
The entire exercise industry was going to transform and shift to a new normal(<--talk about a phrase that sounds more clever than it is). That hasnt happened, clearly.
"New normal" is a good way to describe it. Peloton might be the biggest example of thinking that the massive increase in sales would continue. PC manufactures are another. Bicycles too.

The case with Amazon is different. COVID got more people used to buying things online and "brick and mortar" stores suffered. I doubt that will come back to match pre-COVID levels.

All sorts of things are described as drops from abnormal COVID levels when it makes more sense to compare the change to pre-COVID levels. One reason people don't do that is that it's less "dramatic".

Last edited by njkayaker; 10-17-22 at 05:19 PM.
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Old 10-17-22, 05:35 PM
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Picking up an order at a bike parts distributor's warehouse in New Haven in about 1974, I asked the warehouse manager how the business was going. He said that the owners had ordered and recently received some astronomical number of Huret Allvit derailleurs (half a million or so, as I recall) that were just sitting there, with no one ordering them. (The early '70s bike boom was rapidly tapering off then.)

He said that the owners had just been moaning to him that they'd lost several million dollars that year. He said he told them, "You didn't lose that money! You never had it to lose!"
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Old 10-18-22, 07:34 AM
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Originally Posted by njkayaker
The real take-away is that business people are not as smart as they sell themselves.


A lesson that has to be learned (or re-learned) every generation.

"New normal" is a good way to describe it.
Peloton might be the biggest example of thinking that the massive increase in sales would continue. PC manufactures are another. Bicycles too.

All sorts of things are described as drops from abnormal COVID levels when it makes more sense to compare the change to pre-COVID levels. One reason people don't do that is that it's less "dramatic".
The only part of this I quibble about is the "new" in "new normal." While bicycle sales are still in flux, who's going to be surprised if the 2024 bike sales numbers look a lot like the 2019 numbers? If anything, 2024 may be a little lower as there's a potential surplus of used high-end bikes people bought in 2020-2021 (and perhaps 2022 if the manufacturers ramped up production).
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Old 10-18-22, 07:48 AM
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Originally Posted by njkayaker
People should have seen the COVID exceptions as exceptions when they happened. The real take-away is that business people are not as smart as they sell themselves.
Again, with the benefit of hindsight yes this is obvious. You will argue it was obvious in the moment it was happening, but many did not see that and here we are. You should run businesses since you have such a clear talent for forecasting.
Banks struggle to forecast, economists struggle to forecast, Fortune500 companies struggle to forecast, but this should have been obvious for everyone?

2 years ago I sat at my desk working from home in my spare bedroom and wondered why everyone would suddenly want to work out facing a smart mirror, but I admittedly didnt have all(any) of the industry data to form an educated opinion on the matter.

Regardless, TPC has cut jobs, which is the point of the thread. Whether they should have hired temporary staff or full time staff is another discussion. They expanded during good times and are now contracting.
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Old 10-18-22, 09:22 AM
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Originally Posted by mstateglfr
Again, with the benefit of hindsight yes this is obvious.
You aren't using "hindsight" correctly.

The layoffs are a current event. No one is looking back at them.

The issue is understanding what the layoffs (as a current event) means.

Everybody knows that there was a COVID-related bike boom. So, with that as a cause, it wouldn't be surprising if there were increased hires.

To make any sense of the layoffs, the pre-COVID and COVID-era employee count should also be reported.

It's silly to report the layoffs as an "unusual" event and, effectively, ignore the whole COVID thing.

TPC quickly expanded in size and workforce since beginning in 2006 as an eBay store. In May 2021, TPC announced it raised an additional $40 million in Series B funding that would be used to grow its workforce, among fulfilling other goals. That announcement followed TPC reporting the doubling of first-quarter sales year-over-year. It reported then that revenue more than quintupled in the past two years.
The article obliquely mentions a COVID run up.

So, TDC expected the COVID-related boon to continue. It didn't.

It doesn't take a genius to expect that the boon wouldn't continue. That expectation isn't "hindsight".

The layoffs are not surprising.

Last edited by njkayaker; 10-18-22 at 09:34 AM.
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Old 10-18-22, 09:33 AM
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Originally Posted by njkayaker
You aren't using "hindsight" correctly.

The layoffs are a current event. No one is looking back at them.

The issue is understanding what the layoffs (as a current event) means.

Everybody knows that there was a COVID-related bike boom. So, with that as a cause, it wouldn't be surprising if there were increased hires.

To make any sense of the layoffs, the pre-COVID and COVID-era employee count should also be reported.

It's silly to report the layoffs as an "unusual" event and, effectively, ignore the whole COVID thing.
After an event takes place, anyone who says 'well that was obvious' can either explain why they knew it would happen or be categorized as using hindsight to make that claim. The event doesnt need to be a specific number of days/weeks/months in the past. A hot take on something that just happened can be categorized as hindsight.

I am sorry you dislike what data was and wasnt(were and werent) included in the layoff announcement.
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Old 10-18-22, 09:39 AM
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Originally Posted by mstateglfr
After an event takes place, anyone who says 'well that was obvious' can either explain why they knew it would happen or be categorized as using hindsight to make that claim. The event doesnt need to be a specific number of days/weeks/months in the past. A hot take on something that just happened can be categorized as hindsight.
No, this makes no sense. The layoffs are a current event. That you didn't expect there would be all sorts of corrections after COVID run-ups just means you aren't paying attention.
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Old 10-18-22, 09:40 AM
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Originally Posted by njkayaker
Was there an expansion of the used marketplace recently (due to COVID)?

Is this a "contraction" or a return to normal levels?
Originally Posted by mstateglfr
That seems like a distinction without a difference.
"Contraction" generally describes a reduction in overall economic activity as measured by variables such as GDP and Unemployment Rates. Casually speaking, though, mstateglfr is correct: it doesn't matter whether the economy is returning to "normal" (whatever that means) levels of activity or subnormal levels of activity. Job loss = contraction.
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Old 10-18-22, 09:52 AM
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Originally Posted by Koyote
"Contraction" generally describes a reduction in overall economic activity as measured by variables such as GDP and Unemployment Rates. Casually speaking, though, mstateglfr is correct: it doesn't matter whether the economy is returning to "normal" (whatever that means) levels of activity or subnormal levels of activity. Job loss = contraction.
Knowing why there was a "contraction" is useful information. He's only "correct" if your goal is a lack of understanding.

It certainly "matters" whether that contraction is a return to normal levels or subnormal levels. Since, obviously, one is better than the other.

Last edited by njkayaker; 10-18-22 at 09:56 AM.
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Old 10-18-22, 09:57 AM
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Originally Posted by njkayaker
Knowing why there was a "contraction" is useful information. He's only "correct" if your goal is a lack of understanding.

It certainly "matters" whether that contraction is a return to normal levels or subnormal levels. Since, obviously, one is better than the other.
i'm not arguing any of that. Just telling you what "contraction" means to an economist.
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