Thomas Binggeli has a knack for spotting business opportunities that others overlook. What is he planning with the struggling bicycle retailer?
He evolved from a one-man operation to a Swiss cycling pioneer: Thomas Binggeli in front of his shop in Oberried, Bern.
Thomas Binggeli and Migros. At first glance, these are two partners that do not seem to fit together. On one side, there is the bicycle manufacturer from Bern, an enterprising businessman whose e-bike has even been ridden by actor Leonardo DiCaprio through New York. On the other side stands Switzerland’s largest retailer, a cumbersome giant that risks losing touch with the market.
Now, these unlikely partners have struck a deal: Thomas Binggeli’s company Thömus is purchasing the cycling specialty retailer Bike World from Migros.
Thömus will take over twelve of the fourteen locations being sold and will operate them under the name Thömus Bike World starting next spring. All 111 employees and 22 apprentices of Migros will keep their jobs – even those in the branches in Hinwil and Winterthur, which Thömus will not continue to operate.
Sold sheep to build bikes
With this acquisition, 50-year-old Thomas Binggeli is expanding his bicycle empire. He says, “The bicycle is a megatrend. And around this trend, we are building an ecosystem.”
The foundation for this was laid by Thomas Binggeli as a teenager on his parents’ farm in Oberried near Bern. The story is well-known, and Binggeli has told it many times: When his parents went on vacation, he sold all the sheep and set up a bicycle workshop in the barn. From this one-man operation, he later built the bike manufacturer Thömus, named after his nickname. This was in the late 1990s. Today, the company employs 140 people.
Thomas Binggeli made a name for himself in 2009 when he launched a new e-bike: the Stromer. This model transformed the previously ridiculed senior citizens’ vehicle into a stylish accessory, which soon also attracted business people in cities, and has since been regarded as a kind of Tesla among bike manufacturers.
However, the development and production of the Stromer burned millions. Binggeli’s excellent network in business and politics came to his aid: Among others, Swatch co-inventor Ernst Thomke and then-Zurich FDP senator Ruedi Noser stepped up as investors. Three years ago, Binggeli sold the Stromer brand to a French investment firm – reportedly for a good price.
Shortly after, Binggeli joined Publibike with two business partners. Previously, the postal service had suffered millions in losses with the bike rental service. However, Binggeli believed in the idea: Over 5,000 rental bikes available in more than 30 cities sounded like the future to him. He saw it as a solution to many traffic problems, Binggeli told the “NZZ am Sonntag” a few years ago.
Not a device to buy online
And now, Bike World: a specialty store that Migros wanted to divest because the numbers were no longer favorable. Binggeli describes it as “an optimal step.” The twelve branches would complement his existing eight Thömus sales locations well. “This will make us more present nationally,” he says.
The fact that many customers today prefer to shop online rather than in physical stores does not concern Binggeli. “The bike is not an ideal device to buy online,” he says. He sees the branches primarily as service centers where customers can receive advice, test the bicycles, and bring them in for service.
Through his company, Thomas Binggeli wants to be present wherever the bicycle could be used in the future. Meaning: in leisure, tourism, sports, and commuting. Thanks to electrification, almost everyone can now ride them, “young and old, sporty or not.” Furthermore, the bicycle will also become interesting for areas that have long been wasteland for cyclists due to their topography. “I firmly believe that the bicycle has a great future ahead,” says Binggeli.
Nonetheless, he refers to the business as “a hard turf.” In the case of Publibike, for example, it is difficult to operate profitably if a minimum level of quality is to be maintained. “This requires support from sponsors or, as part of public transport offerings, possibly from government,” says Binggeli.
For now, only Obi remains
The sale price of Bike World remains unknown. Migros will hardly reap a lot of money from the sale. Last year, nearly 400,000 bicycles and e-bikes were sold in Switzerland. This is a fifth less than in the good pre-pandemic years. As a result, many retailers were left with high stock levels.
Thus, the sale of Bike World is a positive sign for Migros: it has succeeded in selling the specialty market despite an oversupply.
Bike World is the third specialty market that Migros is parting with. Earlier this summer, it was announced that Media-Markt would enter Melectronics and the Dosenbach-Ochsner Group would take over SportX. It remains unclear who will take over the furniture store Micasa and the DIY chain Do it + Garden.
Migros plans to divest from almost all specialty markets in the medium term. The specialty stores have been seen as problem children for the group for several years: Recently, sales fell by 7.7 percent to only 1.5 billion Swiss francs. Reportedly, they incurred a loss of 100 million francs last year.
For now, they want to hold on to the ten branches of the DIY chain Obi, which Migros operates as a franchise.
The sales of the specialty markets have implications for the Specialty Market AG in the Migros headquarters. It was created a few years ago as a service company for central services such as marketing. With the sale of Bike World, twelve positions will be cut. Once all specialty markets are sold, the Specialty Market AG structure will no longer be needed.