Being Frank: COVID-19 Impact on Cane Creek

Brent Graves
Brent Graves – President and CEO

COVID-19 has likely impacted everyone to some degree, and while it has impacted Cane Creek, things could be a lot worse. I’ll try and spare you the CEO-speak that is intended to project how morally and ethically correct corporations want to appear, and instead share some of the situation we’ve been facing. I aim to stay away from politics as well – primarily because what we do at Cane Creek and why we do it is as removed from political rhetoric as possible.

March was rolling along relatively normal for most of the month. Lockdowns in Seattle and the Bay Area (CA) certainly raised awareness, but the announcement of a stay-at-home order in our area led us to shut down operations for the first two weeks in April. Lack of information and answers left us unsure of what we could do and could not do as individuals and as a business. During those two weeks we stumbled some as we learned how to work remotely as a group. In that time our objective was to keep the pilot light on so that all of our work would not grow cold. Halting operations is not a luxury most small companies can afford to do for too long. We’re like sharks, we have to keep moving to stay alive. We need to ship and be paid for our product in order to pay our employees and provide health insurance for them.

Reports of bicycle retailers around the U.S. staying open as “essential businesses” led to the re-opening of some of our distributors to supply those retailers. This seemed to be fueled by people re-discovering the bicycle while their normal activities were forbidden. Our website activity began increasing which led to more web orders. At the same time retailers were contacting us to find products that our distributors were out of, and then those distributors started looking for parts. More recently we have seen a similar pattern from Europe. While it seems the “mini bike boom” some are talking about is not being evenly experienced by all, it is definitely resulting in much stronger May demand than we expected. With the shutdown and uncertainty our April demand was off about 35%, but May is at or above normal level. I say “at or above” because May is benefitting some from April pent-up demand.

Better than expected demand is a good problem to have, but it is still a problem. With no precedent, we did not know when we would have what level of business. So we closed our supply chain down except for parts we needed to complete orders in hand that customers would accept (cannot take that for granted). That was about a 95% closure. Fortunately our vendors were very accommodating and recognized what was in Cane Creek’s best interest was in their best interest as well. When demand started picking up as mentioned above, we took a conservative approach and ramped things up slowly. Not knowing if the demand pick-up would last meant not only that we wanted to avoid getting dressed up for a cancelled dance, but we also did not have the production capacity any longer.

When we re-started operations, it was with a skeleton factory and warehouse crew, and everyone else worked from home. While the skeleton crew punched above its weight class, it’s not possible to be at 100% capacity with 30% staffing. The health precautions (masks, gloves, safety glasses, wipe-downs, partitions, rotating crews, distancing between workers, etc.) challenged productivity but were necessary for protection and peace of mind. The bright spot in all this was seeing the commitment and resolve everyone at Cane Creek demonstrated. We’ve been down on the mat before (another boxing metaphor), and got up, recovered and grew stronger. Now this COVID-19 has thrown a wicked left hook that made us drop to one knee. And I’ll be damned, we’re getting up again!

Now more than ever, no one knows what the future holds, but this experience has reinforced that riding bikes makes life better, and that’s why we will continue to be here.