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R & E Cycles owner discusses industry, local changes

R & E Cycles has a simple manufacturing philosophy, as owner Dan Towle puts it. “Is what we’re doing adding value to our product?”

In 1987, Towle’s wife let him know about a help wanted sign in the window of a bike shop.

“What really drew me to working there was a job, and once I got there, I realized, ‘wow, this is a great shop,’” he said. “So eventually I ended up owning it.”

The original owner sold the shop in 1990 to someone outside the bicycle industry. By 1991, Towle didn’t think the shop was going to make it and found another job instead. In 1993, the original owner reclaimed the store after the new owner went bankrupt. He called Towle, his wife, and another former employee asking if they would be interested in buying.

“We bought it sight unseen,” he said. “My wife was in China when we bought it. Back then, there was no email or anything in China so we had once a week communication by fax.”

In 2003, their partner retired and Towle and his wife continued running the store.

“When we got married in 1984, our original plan was to move to Eugene, Oregon and buy a bicycle shop there,” he said.

Instead, they ended up in Seattle. Towle was a musician as well and the couple was drawn to the city’s environment for metal. Since then, he has seen and adapted to numerous changes in the retail industry.

“If you went back to the ‘80’s, a brick and mortar store like ours was the place that everybody came to buy everything related to bicycles. So, we manufactured custom bicycles, but it was a very small part of our business.”

When Towle started working at R&E, the store specialized in name brand bikes, accessories, and clothes.

“One thing that started changing almost immediately when we bought the shop, we started seeing a big decline in accessories,” he said. “That really started moving to mail order and the online very quickly. So, we made a big change in what we sold. We started only selling bicycle accessories like clothing. We had a much smaller inventory, but it was what we made for us, with our branding on it because we realized that’s something they weren’t going to be able to buy online somewhere else.”

By 1996, Towle said they started applying that thinking to their bicycles.

“You can’t buy a Rodriguez bicycle anywhere, you have to buy a Rodriguez bicycle from us. So we started putting a heavier focus on that.”

While downsizing their inventory, R&E also downsized employees and storefronts. Currently, Towle has about 12 employees and one building, versus the 55 employees and four buildings when he started in 1987.

“It came down to the philosophy of, if you don’t have something unique to offer, you’re not going to be a brick and mortar store anymore,” he said.

Towle said about 50 percent of their sales are made online. They ship custom bikes all over the world, including Canada, Japan, Russia and Taiwan.

From there, R&E just kept adapting.

“By 2006, we made a gigantic change in how we make custom bicycles,” he said.

One day, Towle was giving a customer a tour of the shop. The customer asked questions about various bikes in the process of being made and learned that they weren’t yet sold, but being made in advance. He asked if any of them were already sold, and Towle pointed him to the stack of custom bike orders on a desk.

“He said, ‘Well are you working on those?’ And I said no, we couldn’t work on those until these were done. And he said, ‘Well that doesn’t seem like good customer service,’” Towle said.

Towle explained they did this because for custom bikes, the machines take so long to set up for each model, making it too time consuming to work on those orders first.

“He said, ‘You’re a custom bike shop, why would you use machines made for mass production?’ I said that’s the kind of machines that are available, and he said, ‘You’ve got smart people. Make your own machines,’” Towle said. “So we did.”

The shop shut down for three or four months to make the machines and retool the shop. Now, every custom bicycle is made one at a time; there is no mass production.

“Normally, one at a time is somebody who builds 20 bikes a year,” Towle said. “We build between 300 and 400 a year. The customer was right. We’ve been doing that 11 years and business has been better than ever.”

Aside from industry changes, Seattle’s minimum wage has also changed how Towle does business. The shop stopped hiring seasonal summer employees and teenagers to do cleaning.

“Raising it to $15 an hour pretty much means that I’m only hiring people that are highly skilled, I’m not going to be able to hire a low skilled worker to come in and train anymore,” Towle said. “We used to have a coffee shop and I used to hire barista. I would advertise it as barista/bike shop assistant, so they would help us count inventory and price things. Some of them really enjoyed it; we would teach them how to repair bicycles and a lot of them turned into mechanics. Some of them showed great aptitude for office stuff and helped us out with bookkeeping. Those years were a lot of fun.”

The coffee shop was intended for ambiance and to bring in new employees who wanted to learn the ropes of working in a bike shop, but Towle ended up closing it in 2013.

“As the staff dwindles down, we just leave it as it is. Very high skilled, long term employees are what’s there, and that’s it,” he said. “I don’t know how I would bring anybody else in.”

Towle said the government doesn’t always seem to ask if they are adding value to the community when proposing new taxes and policies.

“If the government could take a look and say, ‘How can we do this, is this really necessary?’ then I think some of that stuff might work,” he said.

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