Cyclermate Ltd. Part 1

Historical background
In 1988, Lewis Llewellyn and Dai Armstrong were made redundant as a result of the closure of their town’s steel works in south Wales. Both had been employed by the firm for more than 20 years. Lewis had worked his way up from apprentice to be chief mill engineer, and Dai had progressed from “office boy” to a senior marketing post. The men belonged to the local cycle touring club, and through this had become close friends. As the prospects for continued local employment were poor, they decided to use their savings to set up a bicycle manufacturing business – an obvious choice, given their shared interest, and combined expertise.
The product they selected was a “traditional” upright cycle, following a design typical of the 1940’s and 1950’s. They believed that there would be a strong “niche” market for such a product, given the upsurge in interest in cycling, and increasing consumer interest in “retro” styles.
Working in Lewis’s garage, they built their first prototype. Dai persuaded a local cycle shop to put this on show. Within week they had two orders, and the business was launched.
By the end of 1990, the business had grown to such an extent that they were unable to meet demand. Taking advantage of the relatively low prices of commercial and industrial property, they purchased a disused 15,000 square feet warehouse with an included 2,000 square feet of office accommodation for £240,000. The buildings were big for their needs but they were optimistic about growth and expansion. The business was moved into this new space, and three employees were taken on to assist in production, packing, administration and selling.
Over the next fifteen years, the business continued to expand. Demand was strong, despite little marketing. Occasional small adverts placed in national newspapers stimulated mail order sales, and