While the bicycle industry has faced opportunities and challenges amid the coronavirus pandemic, Luke Kuschmeader is leading his international bike rack company onto new trails – both financially and operationally.
Kuschmeader, president of Kuat Innovations LLC, which he co-founded in 2008, opened a 9,000-square-foot warehouse over the summer in a Los Angeles suburb as a solution to supply chain issues caused by ongoing shipping delays.
“We’re having a huge challenge getting products shipped to the Midwest,” he says. “So, we circumvented that and set up operations on the West Coast. It allows us to ship in two days really anywhere west of the Rockies.”
High demand for the company’s vehicle hitch- and roof-mounted racks for bikes and accessories, which are manufactured in China and Taiwan, has continued for the past 18 months, Kuschmeader says. It’s led to a three- to four-month back order for most of Kuat’s core products. Roughly 90% of the company’s product line is made in Ningbo, China, where the factory has increased capacity nearly 300% and more than doubled its employee count to 350.
“There’s certainly a lot of pressure on the sales and customer service side just trying to explain the situation that we’re doing all we can. Ultimately, we’ve had an amazing year,” he says. “We’re thankful that we’re in an industry that wasn’t decimated by COVID.”
Kuat is on pace to have its largest sales year yet – an increase of nearly 100% year-over-year, Kuschmeader says, declining to disclose figures. He says the company first hit $1 million in revenue in 2010 and has had “pretty explosive” growth since then.
The employee count also has steadily increased, he says, reaching a record this year of 80, comprising 50 in-house workers and 30 independent sales representatives across the country. Kuat had 29 local employees in January 2019 when it moved into a $3.5 million, 40,000-square-foot warehouse and corporate office on 14 acres near the entrance to Partnership Industrial Center West.
The facility’s expansion is already in the works. Construction is expected to start in early 2022 on 4,500 square feet of additional office space.
“We’ve reached capacity much, much quicker than we anticipated,” he says, noting another 30,000 square feet to be split between warehouse and manufacturing space also is planned. “I don’t think we’d be breaking ground for at least a year on the addition of the warehouse. So, we might be two years away from that being operational.”
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