Going the distance

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April 18, 2012

Going the distance

Beverly's Parlee Cycles thrives despite the recession

By Joseph Ferlazzo Correspondent The Salem News Wed Apr 18, 2012, 05:00 AM EDT

In 2007, when Lehman Brothers was collapsing, the U.S. economy was spiraling into recession, and most companies were cutting costs, Bob Parlee, CEO of Parlee Cycles in Beverly, bet against the trend by expanding his company's production of bicycles with a manufacturing partner in Asia.

Due to quality concerns, Parlee says, "It was a hard decision for me to go to Asia, but it made sense in growing the business."

The plan worked. By 2010, Parlee Cycles had quadrupled its annual production to about 1,000 bikes, doubled its staff to about 15 and moved into its current 14,000-square-foot Beverly facility, more than twice the size of its previous digs in Peabody.

Parlee Cycles builds high-end carbon-fiber bikes, like the pros ride in the Tour de France. Prices can range from around $4,000 for a stock bike to well over $10,000 for a custom-built bike.

Carbon fiber is light, strong and easily molded. Parlee, an avid cyclist who has toured New England and much of the United States, first worked with carbon fiber in the 1970s, building aerodynamic components for performance boats with Gloucester-based builder Mark Lindsay.

Ever since a post-college cross-country ride that started in Santa Barbara, Calif., and ended in Alberta, Canada, with a broken frame, Parlee had been on the lookout for a material that could make a stronger, more comfortable ride.

"At that time," Parlee says, "I saw in a magazine that someone had done preliminary work using carbon fiber with bikes and concluded that it was not doable. I said, that can't be right! I realized that carbon fiber was the perfect material for a bike."

In the 1980s, Parlee worked with Brad Story in Essex, building traditional wooden boats. But he continued to think about using carbon fiber to build a better bike. "I was designing bikes and bike parts and trying to sell the designs to bicycle manufacturers, but there was a strong 'if-not-invented-here-then-not-interested' mentality."

After 16 years of building boats with Story, Parlee decided it was time to bring his ideas for building a carbon bicycle to life. In 2001, when most bicycle manufacturers were still using steel and aluminum, Parlee opened shop to work exclusively in carbon.

Parlee remembers talking with prospective investors about funding his efforts to, as he puts it, "build the finest carbon bikes in the world." Investors were more interested in making a company that would grow big, fast. Parlee says these discussions made him realize that "I would not compromise my product because of someone else's investment expectations." This principle has guided the development of Parlee Cycles ever since.

Over the next five years, Parlee Cycles grew to produce about 200 bikes annually. Sales were driven by Parlee's growing reputation that it built the best bikes in the industry.

"The Parlee ride quality is exceptional," says Marty Miserandino, co-owner of Fitwerx bike shop in Peabody, a dealer of high-end bikes and bike equipment, including Parlee Cycles. "We had them from day one. We've had customers who own what are considered the best brands in the business, and then they ride a Parlee and there's no going back. It has a smooth ride, climbs and accelerates perfectly, and the handling is incredible."

The secret to the exceptional ride is Parlee's proprietary manufacturing process, which fuses the carbon tubes of the bike frame together in such a manner that it acts as one continuous piece of carbon, allowing shocks from bumps and potholes to be evenly dispersed throughout the frame and resulting in a smooth, responsive ride. By contrast, the frames of most bicycles are made by soldering the tubes together with a filler material such as paste or epoxy, creating a structure in which the shock from even a minor bump goes straight up the center tube and into the rider's spine.

Then, in 2006, Parlee Cycles won the Race Bike of the Year award from the influential U.K. publication Cycling Weekly, in a huge upset victory over the oldest and most respected European brands. Parlee Cycles was now officially on the map as the carbon bicycle brand to beat, and demand for Parlee carbon bikes increased.

But market demand for carbon bikes was not growing in the high-priced custom-built market segment that Parlee Cycles served. Rather, it was growing for high-end stock road bikes, where prices started in the $4,000 to $5,000 range. It was clear to Parlee that the world was ready for a stock, non-custom carbon bike, and that his company needed to offer such a product in order to grow. So he rolled the dice and headed to Asia to find a manufacturing partner that could produce high-quality, lower-priced bikes. The result was the Parlee Cycle Z4, introduced in 2007.

Then, just as the Z4 hit the market, the custom-built Z1 model was named by Bicycling Magazine, the largest bicycling publication in the world, as its 2007 "Dream Bike" of the year. In 2008, the Z1 was nominated again. Brand awareness skyrocketed, and sales followed.

In hindsight, expanding Parlee Cycles just as the economy nose-dived was not quite the gamble it appeared. According to the National Bicycle Dealers Association, from 2005 to 2010, road bikes were the fastest-growing segment of the U.S. bicycle market, and sales through high-end bike shops and dealers like Fitwerx grew even faster. Parlee had timed his market expansion perfectly.

As for the future, "I feel good about where we are and the respect we have earned worldwide," Parlee says.