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  • 19.12.14

    Planet X

    Crusing Yorkshire in search of Holdsworths with top wheeler-dealer Dave Loughran

    Photographs
    Robert Wyatt

It’s a Monday morning in south Yorkshire in the flat, featureless industrial edgelands between Rotherham and Sheffield. Staff at Planet X are catching up after a long weekend at L’Eroica Britannia vintage bike festival, the first UK edition of the celebrated Italian event that takes place each year on Tuscany’s strade bianche. The Magna Business Park, across the M1 from the colossal Meadowhall shopping mall, is on the site of a once mighty Steel, Peech and Tozer steelworks, most of which has now been demolished. Planet X occupy a pair of the large, anonymous office-cum-industrial units built in its place. It’s a strategic location – the Romans built a fort here –  but it feels a very long way from the chocolate box charms and voluptuous gold and green hills of Bakewell in the Peak District where Planet X were unveiling a new range of steel bikes bearing the venerable Holdsworth marque, complete with a lovingly restored Ford Cortina team car in the famous orange and blue livery. Planet X founder and owner Dave Loughran is on a high, but not from the shiny new Holdsworths. He’s spent the weekend flogging cotton cycling caps.

“Fifteen hundred Apis caps. What a fucking buzz. We bought them for £2 and sold them for £5. Everyone got a bargain and nobody got sunstroke. But it’s not about the money.”

Loughran loves buying and selling and when he says it’s not about the money, you’re inclined to believe him. Sheffield-based Planet X is one of the stars of Britain’s decade-long bike boom and as the company readied itself to follow the likes of Wiggle in a venture capital-funded buy-out, Loughran was set to walk away with upwards of £25 million. But when it came to it, he didn’t walk away.

Growing up in the ‘70s and ‘80s in Eckington, a pit village on the outer fringes of Sheffield, Loughran’s first glimpse of bike racing was the sweat and dirt-caked figure of his father, hobbling into the family home after yet another mammoth training ride. It was a childhood illuminated by the fading, flickering light of the British time trialling scene, the last remnant of cycling’s post-war golden era: steel frames and silk tubs, village halls and the tang of embrocation. But this was the ‘80s and new breezes were blowing. For the first time, the Tour de France could be seen in all its gaudy glory on Channel 4’s nightly highlights show and more exotic still was the new sport dreamt up by tanned, neon-clad dudes on the sun-kissed beach boardwalks of southern California.

“I was bang into triathlon,” says Loughran, a rangy figure, bursting with nervous energy and talking ten to the dozen. “I was sort of all right, in the top 20 in the country, but I wasn’t great. Back then I believed all the marketing bollocks – buy an aero helmet and save two minutes, buy a power meter and save three minutes. I thought if I buy all this stuff I could be winning. It was during all the pit closures when it was all shit round here and Maggie Thatcher’s Enterprise Allowance Scheme was on the telly every week. I figured if the Enterprise Allowance paid you 40 quid a week I’d just import some triathlon stuff from the States. My mum’s happy, because she thinks I’ve started a business, I get 40 quid a week living at home, training all the time, and I’ll become a superstar triathlete.”

He was the first to import tri-bars into the UK, buying ten and selling nine to his mates at just enough of a margin to get his own pair for free. He maxed out his mum’s credit card to buy a consignment of heavily discounted Scott Tinley clothing which he sold via mail order to members of the British Triathlon Association, tripling his initial outlay.

“After about six months I realised I was fucking shit at triathlons, but I’m fucking good at buying and selling.”

He was soon distributing imported goods to a handful of triathlon shops springing up around the country, importing frames by LeMond, Casati and Fondriest and diversifying into mountain-biking as the off-road scene took off in the early ‘90s.

One day, leafing through Triathlete magazine, he noticed a tiny advert for a new energy food from Berkeley, California, called PowerBar. Though still living at home, Loughran bluffed his way to become PowerBar’s first export customer and secured a distribution deal for the UK market. When the first shipment arrived he had nowhere to store all the boxes, so he put up a flat pack shed in the garden and stacked them all inside.

We leave the the tap, tap, tap of keyboards in the open plan office shared by designers, buyers and sales staff, and head downstairs into a large warehouse space filled with shelves and boxes. “Welcome to the area of fucking doom,” says Loughran, as he bends down to delve into a large cardboard box of brand new chainsets. The box is labelled ‘missing left hand crank’. This is Planet X’s clearance and warrantee returns section.

"Hey, didn't you used to be Mark Lovatt?"

“You know what you’ll have? You’ll have a box like that and over there you’ll have another box saying ‘missing right hand crank’. The number of times I’ve found a rear wheel and a front wheel, and I’m like, ‘Isn’t that a fucking pair?’ I purposely avoid this area because it stresses me out too much. I reckon there’s about two hundred grand here of stuff we don’t know we’ve got. Officially, this warehouse is empty.”

But it’s far from empty. There’s an old set of lights from an operating theatre, a pre-war cast iron exercise bike and a row of 1990s iMacs (the coloured ones with the cathode ray tubes, remember them?). A motley ensemble of disinterested showroom dummies observes the chaos from among the vintage shop fittings, another of Loughran’s many collection obsessions. But mostly it’s bike parts.

“I love buying tubs. I love it. I buy fucking thousands of tubs. They’re an ever-appreciating asset, aren’t they? I wanted to charge an extra pound for every year we’d had them – on the website put ‘five year old matured tubs.’”

Loughran has what you might describe as a nose for a bargain, though his spending sprees could be described as haphazard. Once, while on holiday with his wife in Rimini, he got wind of a possible deal and sneaked out for a morning with Jamie Burrow, formerly a highly-rated climber on the US Postal team and now a Planet X designer and the company’s man in Italy. The pair returned a few hours later, Loughran having paid £200,000 for the contents of three warehouses owned by the Italian manufacturer SAB. It took Burrow and two helpers months to sort through the stock, sending home seven shipping containers full of SAB frames. In another deal, Loughran bought a huge consignment of Cinelli ‘Spinaci’ bar extensions. These were a common sight in the pro peloton of the mid-1990s until the UCI banned them. They can now be found on the Planet X website at an 87 per cent discount on RRP (if ever you are looking for a case study of the commercial might of the UCI, look no further).

Soon Loughran was turning over big money, enough to start sponsoring riders. In the days before Lottery funding, Olympic development programmes and Team Sky, sponsoring a top rider was sometimes little more than a new bike and few cases of PowerBars. Throughout the ‘90s and under various guises, Loughran brought together the ‘northern mafia’, a coterie of fearsome hardriders including John Tanner, Wayne Randle, Mark Lovatt and Ray Eden. Between them, they dominated the domestic road racing scene.

In 1995, the same year he also won the National 100 mile Time Trial Championship, and a stage and the points jersey at the Irish Rás Tailteann, Ray Eden became Planet X’s first employee and was soon Loughran’s right-hand man. He remained a mainstay of the company until 2011 when his life was cut short in a vicious attack after Eden had intervened to diffuse a domestic row in the street where he lived.

At the Planet X offices we pass a wall covered in photographs of the big, burly, ungainly, but supremely powerful Eden in his racing days (see Ian Cleverly’s tribute in Rouleur 27). Another early Planet X employee was one Dave Brailsford, who worked as Loughran’s export sales manager. When Peter Keen, head of British Cycling, set up the World Class Performance Programme in 1997, Loughran and Brailsford won a contract to procure bikes for the programme’s riders. After a few months Brailsford moved on from Planet X to join Keen fulltime. The rest is, as they say, history.

By the late ‘90s the cycle trade was changing. Local and independent bike shops were closing, with newer, bigger retailers taking their place. The big stores preferred to deal with just a handful of major distributors and didn’t want to do work with small players like Loughran. Losing the PowerBar contract made a bad situation worse and turnover fell from £2 million to around half a million. This was the time of the first “dot-com boom” and it didn’t take a genius to realise the web could do for the traditional mail order bike trade what EPO, steroids and blood bags were doing for the pro peloton.

Online bike shops would mean people would no longer be tied to buying bikes from their local bricks and mortar shops, and restricted to the models and brands supplied by the major distributors. Loughran needed a website and teamed up with Brant Richards, a mountain-bike journalist who had just resigned as editor of a cycling website after his bosses refused to run a 0/5 review he’d given of a product made by one of the website’s main advertisers. They launched On-One as a direct-to-customer, web-based brand, selling single-speed mountain-bikes – back then even more of niche product than it is today. They began with an order of just 100 frames from a factory in the Far East but forgot to specify head tube lengths for each size of frame. Every frame came with the same length head tube, an elementary mistake but, as Brant remembers, it did make the bikes look very neat when they were lined up in a row…

More models were added, including geared bikes, and On-One’s no-nonsense and highly customisable frames attracted a small but enthusiastic following. At the time, the only company doing anything remotely similar – turning out interesting, mould-breaking bikes – was Surly in Minnesota.

A few years later On-One launched the Pompino, a fixed wheel road bike with relaxed geometry, cantilever brakes and clearance for mudguards, a contemporary take on the traditional fixed wheel winter training bike. Cheap as chips (today’s Version 4 is priced at just £129.99, frame and fork), it became a something of a cult classic, begetting a whole new genre of urban fixed wheel and single speed bikes.

“I’m a bit of a contrarian,” says Loughran. “As soon as things become mainstream or commercialised, I turn away from them. I’m very bad like that. We were the first to do fixies, we were the first to do 29’ers and single-speed. As soon as it becomes popular I almost deflect to do something else. I’ve lost the lead so many times.”

For all the interesting, quirky projects, it was a road bike that was to cause the phenomenal sales growth that made Planet X such a hot ticket for potential investors. Seven years since its launch, the design of the Pro Carbon has changed very little (critics would say this is one of its shortcomings) but it still accounts for a third to half of the company’s sales. It would make for a cute story if the bike had been developed over many years on the hard roads of Yorkshire by the likes of Tanner, Randle and Lovatt, but the truth is that it is an off-the-peg ‘open mould’ design from XDS Bicycle Company of Shenzhen, China, the world’s biggest manufacturer of carbon fibre bicycles (and a company you’re unlikely to have heard of, unless you work in the bike trade). As well as making for Planet X, XDS manufactures thousands of carbon frames for many of the big name, premium brands – though don’t expect them to be quite so open about it… 

Former US Postal pro Jamie Burrow, one of many ex-riders working at Planet X

Thanks to the economies of scale in mass production, a vast pool of relatively cheap skilled labour and significant government aid, the Chinese bike industry can export quality bike frames at prices very few others can touch. At the same time, the British government’s Cycle to Work scheme allows buyers of new bikes up to a value of £1000 to qualify for tax breaks worth as much as 40 per cent. Although only one in ten of Planet X’s bikes are sold via Cycle to Work, it’s enough to make £999 a hugely significant target price and the anchor for all Planet X’s best selling bikes.

If Loughran the wheeler-dealer is the embodiment of Adam Smith’s invisible hand of the market, the Pro Carbon is just as much the bastard offspring of China’s industrial policy and the British tax system. Producing a £999 carbon road bike that doesn’t fall apart within a year can only be done by squeezing suppliers until the pips squeak and then, as Loughran puts it, “shagging the hell out of the price.”

The Pro Carbon may be an XDS design but Planet X next helped the Chinese company with the geometry for a carbon time trial bike, the Stealth Pro Carbon. In exchange, Planet X got exclusive rights to sell the design in the UK market (they couldn’t afford the global rights) and XDS went on to make the bike for half a dozen other brands. Cadel Evans rode a Ridley-badged version in time trials at the 2007 Tour de France. This fact was not ignored in subsequent Planet X publicity about the Stealth Pro Carbon.

We are riding in Loughran’s Mercedes estate, en route for Planet X’s main warehouse in nearby Greasborough but have just driven around the same roundabout three times. The vehicle is becoming a centrifuge. By the seventh time round, I am getting queasy and Loughran’s dog, Texas, sitting in the back with photographer Robert, is looking confused. We are going round and round in circles. Lost in Rotherham. Some would say it’s the perfect metaphor for Planet X since Loughran executed his coup, firing his chairman and chief executive and calling off the buy-out.

After a sheepish phone call back to head office for directions, we’re back on our way. If the traditional units for measuring large areas are the size of a football pitch and the size of Wales, this warehouse falls somewhere between the two. It must be visible from space so it’s quite something for Loughran to have lost it. Inside there are long, towering canyons of crates and boxes, row after row after row, not unlike the closing scene in Raiders of the Lost Ark, when the Ark of the Covenant is tucked away for safe keeping among crates of slowly maturing tubular tyres.

Instead of stock spread across three sites, everything can now be kept under one roof. Orders are processed using a computer system that helps warehouse staff pick out the right items for each consignment of parts or bike build. “We didn’t use to have picking locations,” recalls Loughran. “I remember asking Ray [Eden] ‘Where’s the blue stems?’ and he replied: ‘They’re behind where the green pedals used to be’. That was when we realised we needed to get some systems and processes in place.”

Every Planet X bike is assembled to order on an airy mezzanine floor, with qualified mechanics following the individual customer’s specifications – components can be upgraded; crank and stem lengths specified; saddle, handlebars and finishing kit to order. While not quite a full custom build, it offers a degree of flexibility and tailoring for fit that’s rare at the value end of the bike market, where bikes tend to be built on assembly lines and shipped to the UK as finished products. A single mechanic responsible for each build adds accountability to the system in case of any problems down the line.

For the past year, the man responsible for streamlining Planet X’s systems is Barry Dunn, chief operating officer, lured away – along with a handful of logistics staff – from Chain Reaction Cycles, the world’s biggest online bike retailer, based in Northern Ireland. Dunn says Planet X grew so fast in such a short time that it couldn’t keep up. “Things were pretty grim, we were pissing off a lot of customers,” he admits. “There were only three phone lines and four people answering them. Now there are 30 lines and 23 people answering, but we still can’t answer all the calls.”

For Harvey Jones, one of the founders of Wiggle, who, when the time was right, took the money and walked away, it’s a very familiar story. “Founders can become extremely disruptive,” he says. “Professional managers are there; the founder stays as a non-exec director but comes in and causes mayhem. It happens time and time again. From the point of view of the founder-entrepreneur, it’s hard to see through the ceiling above you. You know about the journey you’ve been on, and been successful. You’re an expert in where you’ve been and you’re good at running the company you run. But trying to see how a company can double in size is extremely difficult. It’s extremely difficult to see weaknesses in the company you’ve built and hard to take criticism from outside.”

On the other hand, Jones maintains that the companies that lose their founders sometimes end up losing their way. “Values stay with the founder and it’s far too easy to dismiss that. It’s easy to replace your staff who are passionate cyclists with people from Tesco, but your customers are also passionate cyclists and they tend to see through that.”

For Loughran, growth is a sensitive subject. “All I’ve had for the last three years is ‘what’s our growth plan’: growth, growth, growth, how are we striving for growth? Growth became a number. We grew phenomenally in the last year and it became a pressure cooker of: ‘How do we build 300 bikes a week, how do we build 350, how do we build 400?’ It was all because my management team was driving for a buy-out and they had to show to all the vulture capitalists a ten, 15, 20, 25 million-pound success story. It takes the founder to come back and take the long-term view and say ‘I don’t give a shit if we drop back to 15 million’.

“We can build 300 bikes a week now and everyone can have a great life and the mechanics don’t have any pressure and we can have good availability. If we strove for 500 bikes a week we wouldn’t have the supply chain, everybody would hate each other, it wouldn’t be a nice company. When I came back in, the first thing I did I had meeting with all the staff and I did a great Winston Churchill speech. I was like: ‘Growth’s the wrong word, we’re on an excellence strategy. We want to make excellent products, deliver excellent customer service and generally be excellent’.”

Loughran has bags of personal charm when he wants to turn it on but as Carlton Reid, a longstanding bike industry-watcher, puts it: “He’s very bright but very abrasive, an incredibly hard guy to work for.”

Loughran’s contempt for large sections of the bike industry is barely concealed, from the big distributors, who he describes as “dinosaurs”, to the new wave of companies selling cycling gear as a new category of high profit-margin luxury goods, who he thinks are either greedy or spending way too much on marketing.

As for who Loughran admires in the business world, the first name that comes up is Mike Ashley, the billionaire founder of Sports Direct, which operates more than 500 stores worldwide. Loughran has consciously followed the Sports Direct model: build a business around multiple brands that you own and cut out as many tiers in the supply chain as you can. Loughran also looks up to Grant Petersen, the iconoclastic bike designer who once headed up Bridgestone USA before starting Rivendell Cycles, a small company in northern California making elegant, consciously retro bikes in lugged steel. “I love them because they do their own thing, a hundred per cent what they believe in,” he says.

Loughran’s biggest hero, however, is the entrepreneur Hugh Facey, founder of Gripple, the Sheffield company with 300 employees that makes tiny widgets for joining and tensioning wire. Once described by the Daily Mail as ‘the best boss in Britain’, Facey has put in place a revolutionary employee share ownership system that will eventually mean the company is co-owned by staff and an independent trust set up to safeguard the interests of the workforce. I check in with him a few weeks later to ask whether such a radical idea wasn’t just another flight of fancy. He confirmed he was still committed to the plan, “yes, definitely.”

We leave the giant warehouse at Greasborough and drive ten miles to the outskirts of Barnsley to visit the biggest of Planet X’s three bricks and mortar stores. “Baaarnsley. Home of Waaayne Rrrannndle”, beams Loughran, lengthening the vowel sounds and parting the consonants, in a comically exaggerated South Yorkshire brogue. “You’re not vegetarians, are you?” he asks, as we pull into the car park. “I’ll send out for some pork pies. Fantastic pork pies just up the road.” As soon as we walk in he sends for the pork pies and disappears into a back room where he gets involved in what a diplomat would describe as a ‘full and frank exchange of views’ with the shop staff over a rogue box of warrantee returns.

I’m left to wander the showroom with photographer Robert. It’s Monday lunchtime, not traditionally the busiest hour for bike retail, and the place is deserted. We munch on the pork pies, which were, I am happy to report, exceptionally good. So too is the shop: as impressively stylish an emporium of bicycles and their associated paraphernalia as I have ever had the pleasure to browse: all industrial chic, vintage wooden shop fittings, plump Chesterfield sofas and gilt mirrors. These days, an in-house espresso bar is par for the course, but this is the only bike shop I know of that contains an Airstream trailer, polished to a mirror shine.

Loughran emerges, and we hop into the Merc. “They’ll hate me now,” he reflects. “But in the back room there was ten grand of Powertap hubs hoicked in the corner. What I said to the lad was ‘I’ve given you a right rollicking but actually you’re quite good. I’m quite impressed.’”

The owners of multi-million pound businesses are supposed to spend their weekends on yachts or at the golf course. Dave Loughran must not have read that memo. Instead, he’d spend most of the weekend poring over the stock file, a giant spreadsheet that lists every item of inventory, the cost price, the sale price, how many are in stock and how many on order.

“I used to get the stock file on Friday at five o’clock, and when I stopped doing it, it was almost 2 o’clock in the morning. This is how bad I was, though I loved doing it. I’d change the prices, reorder stuff and move stock from the showroom to the warehouse. I knew if I did five hours on Saturday and three hours on Sunday I could go through the entire stock file, all three thousand product lines, and have a load of actions ready for the staff on Monday.”

When he stepped away from the day-to-day running of the business, appointing a board of directors, a new CEO and management team, Loughran finally had time to do “normal stuff” like collecting his two kids from school. And riding his bike. It was enough time to ride off the couple of stone he’d gained in a time when his waistline was expanding almost as fast as his company. But eventually, the gravitational pull was too much. “I felt like I’d had my arms cut off. Other people were running my company, spending my money.”

Loughran admits relaunching Holdsworth is a decision made more by heart than head. “The wrong thing to do now is Holdsworth. It’s stupid. So that’s what we’re going to do. Let’s do something that’s a challenge, that doesn’t make any sense, that’s bucking the trend. I’d almost like to fail at something. Everything I do turns out successful.”

As things stand, Planet X generates sufficient profits from its two main brands (Planet X for road bikes and triathlon, On-One for off-road and urban bikes) to allow Loughran to indulge his inner bike nut, by contracting a handful of terzista workshops in Italy to make relatively small numbers of artisan tube-to-tube carbon fibre frames under the Viner brand as well as the new Holdsworth line. His latest acquisition is Carnac, the iconic French shoemaker.

It’s great that someone is keeping these historic brands going but the big question for Planet X is whether such commercially marginal sidelines are diverting time and attention from the core business. The value end of the bike market has never been more competitive and consumers have never been more willing to shift allegiances. Just as Planet X came from nowhere and grew to be the second biggest assembler of bikes in Britain (after folding specialists Brompton), there will be other disruptive newcomers that try to do the same. Will the Chinese companies that make frames like the Pro Carbon start selling direct to consumers? Then there’s the vexed question of the multi-brand strategy. Does selling high-end bikes alongside value models burnish the Planet X brand? Or will distressed marques lose what’s left of their cachet by an association with a company whose reputation is for cheap and cheerful? In a market as consciously price differentiated as cycling, can one company hope to cover a full range of product lines, from best value for money, to best that money can buy?

In the time that I’d been working on this feature, almost the entire senior management staff of Planet X quit the company, including chief operating officer Barry Dunn and Brant Richards, head of design. Once Loughran decided he wasn’t going to cash out and sell the company to the management, an exodus was only a matter of time. It’s no secret that the large swathes of the bike industry who Loughran has rubbed up the wrong way are looking on with glee at what’s seen as a corporate bloodbath, the wheels finally coming off the Planet X juggernaut.

Looking back at the journey he’s made over the past three decades, from the first ten pairs of tri-bars, the first postal order and the first boxes of PowerBars stacked in his garden shed, Loughran says he couldn’t have dreamed of it turning out any better. “Mentally I still don’t see it as a proper job. I’m still a kid at university messing around with bikes.”

True, he could be sipping Mai Tais on a yacht in the Caribbean. But that wouldn’t be very Dave Loughran. He loves cycling, he loves buying and selling, he is providing work for 130 people and, together, they’re turning a profit of more than £1m a year. Only time will tell how this story ends, but whatever happens, I’m certain Dave Loughran will be enjoying himself.

Jack Thurston is the author of Lost Lanes: 36 Glorious Bike Rides in Southern England and presents the Rouleur podcast.

 

 

 

 

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