Leading U.S. electric bike retailer, Rad Power Bikes, has just announced the closure of its retail store in New York City, citing the need for further organizational changes following a recent wave of layoffs.
A spokesperson for Rad Power Bikes stated that, as part of necessary organizational shifts, the Rad Retail store in the New York area would be closing.
The Brooklyn store, launched in October 2022, has been in operation for over a year, providing local shopping, service, and test-ride services for customers. According to Rad’s website, Rad Retail has several other stores across the United States, including locations in Seattle, Denver, Salt Lake City, St. Petersburg, Florida, as well as stores in Berkeley, Santa Barbara, Huntington Beach in California, and San Diego.
Four months ago, Rad announced its exit from Europe and planned to stop selling electric bikes to customers in the UK and European Union starting in 2024. The company had indicated plans to lay off over 40 employees at that time, marking its fifth round of layoffs since April 2021. This included a reduction of 100 positions in April 2021, followed by 63 job cuts in July 2022. The third round of layoffs took place in December last year, and the fourth in April this year.
While Rad Power Bikes commands a large consumer base in the United States, it also faces several lawsuits related to safety issues with its electric bikes, including cases involving wrongful death, property damage, and a recall of nearly 30,000 bikes due to safety concerns.
Founded in 2007, Rad began direct-to-consumer sales of electric bikes in 2015. It has grown into a leading electric bike seller in North America and raised $304 million in 2021. While witnessing substantial demand during the pandemic as more people purchased electric bikes, the post-pandemic era saw most electric bike companies reporting excess inventory. The massive expansions during the bike boom period left many teams redundant. These consecutive cost reductions are seen as efforts for corporate recovery, as the high sales of electric bikes have dwindled, and the excessive expansions by some electric bike manufacturers have led to heavy costs, prompting them to trim expenses.
The closure of the New York store by Rad Power Bikes is aimed at aiding more efficient operations:
“The Rad Power Bikes team has been working diligently to position the company well amidst the current market realities and become a sustainable, enduring business. While we’ve made some tough decisions in the past few months, organizational changes are necessary to further enhance our operational efficiency.”
The current financial state of Rad Power Bikes remains unclear, given its funding by large venture capital funds and private companies. However, the rounds of layoffs in recent years and the withdrawal from Europe and New York stores indicate Rad’s move toward tightening operations.