Big Dog Gets Smaller

September 8, 2008

All Posts, News

Big Dog Motorcycles of Wichita, Kansas announced last week that it had laid off 22 employees and intends to lay off 27 more. It is the third layoff Big Dog has announced in the last year.

In 2004, Big Dog employed 340 people. After the pending layoffs are completed the company will have only about 100 employees.

Right Size Company For Market?

“We had to right size the company for the market,” company owner Sheldon Coleman Jr. told the Wichita Eagle. Coleman estimated the company will have sales of $40 million this year. The company had sales of $100 million four years ago. Coleman attributed the Big Dog’s declining sales to a “cyclical” economic downturn.

“It surprised me at how far the economy has dipped,” Coleman told a Wichita reporter, proving that he can actually speak plainly. “I underestimated it.”

Big Dog sells high-priced status bikes. The base prices of Big Dog’s motorcycles range from $24,000 to $36,000. By contrast, the sticker price of a Harley-Davidson Dyna Super Glide is about $12,000.

High Priced Cruisers Forever

Coleman said the company will debut three new models at the Big Dog Dealer show this week in Kansas. The new bikes include two more high priced motorcycles and a cheaper model called “the Coyote.”

Coleman insists, however, that the heart of Big Dog’s business should remain high priced custom cruisers. Coleman thinks the company will rebound when the economy rebounds.

Trailer Bikes May Be Fad

Motorcycle industry analyst Don Brown, of DJB Associates, disagrees. He thinks bikes like the one’s Big Dog sells were a short term fad, driven partly by the fleeting popularity of television shows like “Orange County Choppers.”

The heavy cruiser bike is, “less popular than it was,” Brown said.

But Coleman is convinced there is still a market for pretty, high powered bar hoppers. Big Dog’s share of that market has risen to 50 percent as competitors like American IronHorse have gone the way of the Indian. “Consumers want it, and when good times return, they will buy it.” Coleman told the Eagle.

Meanwhile, while Big Dog was announcing layoffs, shares of Harley-Davidson Inc. sold on the New York Stock Exchange fell to $39.20. The stock has traded as high as $55 in the last year.

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