Fietsfabriek Colleagues Bankrupt

Last Week of May
Photo by Marc of Amsterdamize

Some industry insiders, myself included, were at least suspecting things weren’t going smoothly at Amsterdam’s populair transport bike producer De Fietsfabriek. Yesterday their filing for bankruptcy got leaked and now the press is all over it like flies on poop. That’s not really surprising considering the uncanny knack those guys had for keeping the media’s attention. It is (or was) indeed a very charismatic story about a temperamental and driven Kurdish immigrant’s success with that most Dutch of products; the bicycle. I have to admit that it sounds far more exciting than “Highly educated industrial designer and ex bike industry guy from New York makes conservative, high quality bikes in Holland”. But I suppose the downside of celebrity status is that you’re even more newsworthy when things go wrong.

A lot of people apparently think it’s really important news for WorkCycles since friends, colleagues and acquaintances have been sending me links and commentary all day long. Just for the record: We’re not exactly cheering here. Regardless of the situations that led to their financial difficulties I sympathize with their situation as a fellow business owner. According to the news reports the two partners are looking at personal responsibility (Fietsfabriek was an unincorporated partnership) of about 1.2 million euro. How on earth does one dig themselves out of such a hole?

Most who’ve forwarded the news do so both because WorkCycles and De Fietsfabriek are often compared as Amsterdam colleagues/competitors. Magazine and newspaper articles have often featured both of our bikes and interviewed both myself and either Dave or Yalcin from Fietsfabriek. However the suggestion is really that WorkCycles would benefit hugely from the disappearance of Fietsfabriek. I’m no so convinced of this. It is true that both firms produce their own unique lines of heavy-duty city bikes, transport bikes and trikes (bakfietsen) and both are based in and have multiple shops in Amsterdam. We’ve even sold our bikes through a handful of the same dealers, though for what it’s worth the WorkCycles line has generally (or always?) replaced the Fietsfabriek line.

But as Dave Deutsch, one of the Fietsfabriek partners, and I have discussed several times we’re very different companies that make very different bikes that appeal to different audiences. WorkCycles are mostly black or grey or other boring colors. We’re willing to paint them anything you wish but that’s just what our customers want. Our bike designs, and perhaps our entire company “look and feel” is straightforward, the focus being an admittedly nerdy, no-BS, technical perfection. Fietsfabriek, on the other hand, has been much bolder: bikes with frame designs that are fun bordering on silly, in colors spanning the rainbow. I’ve seen them quoted as saying they’ll build whatever the customer wishes. Sorry to disappoint you but WorkCycles won’t make such claims; We’re flexible but we build bikes with a collection of parts and principles we’ve thoroughly tested and trust. Of course I have to think that WorkCycles bikes are better, but I suppose they think the same of their own product.

Royal Cyclery
Photo by Marc of Amsterdamize

The differences between our products and approaches have fortunately led to each company appealing to different audiences. Fietsfabriek is much bigger and better known in Amsterdam while WorkCycles is stronger elsewhere, particularly in other countries. Regardless Fietsfabriek’s extroverted charm and constant media attention has brought them a much younger, hipper customer base than ours. When customers go “shopping around” for a bakfiets or sturdy city bike in Amsterdam they’ll likely visit both but the experiences are so different that customers seem to choose where they belong.

But still, isn’t the Fietsfabriek one of WorkCycles main competitors? Only from a tunnel vision perspective. Our competitors are everything else people might spend their money on instead of transport bikes: kitchen remodeling, cars, travel, a flat screen TV. In particular the rampant bike theft is worse for our turnover than another bike company that brings considerable media attention to small bicycle manufacturers. If Amsterdammers could perceive it as safe to park their bikes we would sell far more, better equipped, more expensive bikes.

Will WorkCycles benefit anyway? Of course, probably to some extent. All things considered Amsterdammers will continue buying bikes at about the same rate so some of the would-be Fietsfabriek customers will inevitably come to us in their absence… and just order their bikes with different specs and in brighter colors than have been typical Workcycles. But while these types of bikes were totally novel in 2003, now in 2010 they’re fairly mainstream and can be found in many hundreds of shops all over the country. Thus whatever vacuum that opens will be filled not just by WorkCycles but also by many dealers offering bikes from a variety of large and small manufacturers. And therein lies one of the fundamental challenges for both of our companies: There’s far more competition now than just a few years ago. Compete or die.

Slices Of Saturday
Photo by Marc of Amsterdamize

The newspapers first all published approximately the same piece which simply reported that Fietsfabriek has filed for bankruptcy as a result of huge debts and that the curator is working on a continuation. According to those in the know there’s a debt of 1.2 million on a yearly turnover of about 3 million. There are 60 employees for which permission for layoffs has been requested. (To me these are strange numbers: a debt of almost half the yearly turnover and 60 employees for just 3 million turnover.)

If you can read Dutch or wish to read an online translation you can check the article out in Het Parool.
Fascinating are the reader’s comments that follow: Some blame the bankers. Some blame the saturated market. A few bakfiets haters take the opportunity to demonstrate their moral superiority and insult some parents. And a surprising number imply fraud, one claiming rather specific knowledge of an enormous tax fine for avoiding customs charges. That’s some pretty hefty stuff to be accusing in the comments section. Truth or just an axe to grind? Who knows.

Later in the day Het Parool published an UPDATE. Herman Stil apparently researched further, calling around to Fietsfabriek dealers, their bike designer and partner Yalcin Cihangir. Ouch, this piece paints a much uglier picture. One former dealer announces that they opened a bottle of bubbly upon hearing the news and goes on to run off a list of problems. (In the comments below the same dealer denies the bubbly part but supports the rest of the statement.) Other dealers offer similar descriptions including poor quality, many broken frames, chaotic delivery and administration and add that their critique only led to intimidation. Several dealers listed on their site replied that they haven’t done business with the Fietsfabriek in years. Michael Kemper, the German designer of the Fietsfabriek bikes claims he hasn’t been paid the agreed royalties in two years. Yalcin denies all of the accusations and fires back that his critics aren’t bike makers, just people who want to share in his success. Concerning Kemper’s accusations he turns them around claiming that Kemper began producing the bikes himself and selling them to the dealers behind his back. Cihangir is quoted as saying “I’ll come with new models, a new Fietsfabriek. Just wait.”

What to believe? It’s really hard to say. I assume some of the worst accusations are hyperbole or half-truths on both sides. But my impression has always been of a company with a genius for seat of the pants marketing and promotion but not for organization, infrastructure and long-term relationship building.

The irony of all this is that perhaps the biggest publicity they ever got was from a hugely successful two-part documentary in 2004 by Frans Bromet called “Failliet of niet? – de fietsfabriek” (“Bankrupt or not? – the Fietsfabriek”) in which Yalcin struggles getting his new Fietsfabriek business on its feet out of an imploding bike builder called ‘t Mannetje, a criminal Jan Willem Deijmann and seemingly everybody doing their best to cheat everyone else.

Business-wise I’m not particularly fussed about where it goes but I certainly wish the best for Dave, Yalcin and their employees.

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20 Responses to “Fietsfabriek Colleagues Bankrupt”

  1. amy jordan Says:

    Good post Henry! Interesting to read your take on things.

  2. John . Dublin Ireland Says:

    Interesting this,I have only ever seen just Pictures of The Fietsfabriek Bicycle as we have few Dutch Bikes in Ireland. The Dutch Bikes we have is mostly Brought over from the Netherlands and none was sold here until recently.

    All of a sudden we have a great Resurgence in Cycling here and a Renewed interest in the Old style Upright Bike with Chain Guards and Coat Guards. Old Raleighs and Humbers are being Resurrected again and a lot of Pashleys and Dawes Heritage Bikes are getting Sold together with one or two Dutch Bike makes.

    Reliability and Quality is the Key to keep Selling Bikes,if you sell Bikes that do not last very long you will not stay in Business. Of course price plays a big part as well,if it is very Dear then only a small minority will be able to buy your product. So you will have to sell several styles of the same Bike,with just the basic amount on some Bikes and the more upmarket Equipment on the others in order to keep going.

    But the one Criterion you have to have is good Quality,if People get to know you sell Quality Bikes then they will keep coming back to you in future.

    You must be doing something right because there is always a great interest in Azor Bikes and the Monarch Bikes on UTube in the UK and the United States and everywhere else. Anyone I know who owns a Dutch Bike loves them whether it is an Azor or Batavus or Gazelle.

  3. DrMekon Says:

    As I’ve posted on my blog ( http://bit.ly/15AVEL ), our first cargobike was a DeFietsFabriek 995 (in dark brown – more conservative than my yellow and red Cargobike), and it was lovely. Utterly solid, flawlessly put together, and massively overbuilt. Unfortunately, their rain cover design was useless, flapped about, and leaked water. The ex-UK distributor spent months trying to get FF to sort it out. Eventually, he just bought one when he was over there, and gave it to me himself. The replacement was worse than the original, at which point I started asking your employee Chris about getting Clarijs to do a one-off. I subsequently got a bakfiets.nl cargobike, and later sold the 995. The UK distributor subsequently gave up selling their bikes, and as far as I know, there hasn’t been a UK agent since. It’s a shame, as some of their Kemper-designed bikes look great. I love the 26-20 Packmax Duo – the lower CoG on the small wheeled version looks like a great touch.

  4. Stephan Schier Says:

    Thanks Henry. We all benefit from your balanced review of this situation.

    It is unfortunate that 60 employees (? it does seem like a large amount relative to stated revenues) will lose their jobs.

    This is a delicate time. We need new customers to receive great service and for them to be able to trust in the longevity of their products and their brands. We want this movement toward practical, sturdy, comfortable and handsome bikes to continue as a trend (not a fad).

    Who remains to take care of existing Fietsfabriek customers? Let’s hope we (as dealers) can pick up the slack and continue to improve consumer confidence in the “Dutch bike”.

  5. Frits B Says:

    I see ‘t Mannetje sells all the Michael Kemper designs too, so depending on the source these should continue to be available and service should not be affected.

  6. Todd Edelman Says:

    If this was the USA and it was the auto industry, you know what would happen…

  7. Tad Salyards Says:

    It’s never good to see a big player go down in your own ecosystem. Kudos to you, Henry, for not dancing on their grave and having the class to temper the attacks on a competitor. Society owes a large debt to those who are willing and able to start businesses and take on risk. Everybody with a job should recognize that.

    I’m sure that you’ll benefit from the closure, but that has more to do with your solid trajectory and logical “fietsmanifesto,” not the downfall of a rival.

  8. henry Says:

    Stephan, Frits,
    Concerning who’ll take care of Fietsfabriek bikes in their absence: Well, we service a LOT of Fietsfabriek bikes at the WorkCycles shops, but really any bike shop with the space and interest can repair their bikes. Perhaps I shouldn’t speak for colleagues but ‘t Mannetje might not be so helpful here. Though they sell similar Kemper designed bikes I suspect there’s a lot of “bad blood” between these two firms. Remember, Fietsfabriek essentially grew out of the infighting within ‘t Mannetje.

    But really the main problem for Fietsfabriek owners will be warranty issues; Of course nobody will repair those bikes for free in the manufacturer’s absence. We’ll continue to happily repair and modify Fietsfabriek bikes at our normal rates.

  9. henry Says:

    Todd,
    Something as blunt as a government bailout of the Fietsfabriek is not too likely but critics have suggested that the Fietsfabriek bankruptcy is a fraudulent way of achieving approximately the same result: Run up huge debts as a result of risky business practices, investments (and possible siphoning of funds out of the company) and conveniently declare bankruptcy to screw some suppliers and employees. Then with much of the debt cleared restructure and begin again.

    Though I’m not so familiar with the workings of a bankruptcy the above scenario seems somewhat unrealistic Fietsfabriek wasn’t incorporated meaning that the owners are, in principle, liable for the debt.

  10. Frits B Says:

    Henry,
    The normal procedure of a bankruptcy is that a “curator” is appointed by the court who establishes how much of the debt can be covered by the sale of the assets and then apportions these revenues to creditors. The taxman comes first. And as in this case the main debt seems to be to the taxman (or so the newspapers say) there won’t be much left for the other creditors. A further complication in this case seems to be that the factory in Turkey is not included in the personal assets as it is incorporated under Turkish law and therefore cannot be touched; in other words, it’s just another supplier. As Fietsfabriek itself was a commercial partnership, not a company, each of the owners is fully liable for all debts and will remain so until these are all paid or the creditors agree to waiver part of the debt. They will be very poor unless they can find new backers.

    Government help is entirely out of the question. Selling bikes is not an essential industry, nor is an enormous number of jobs at stake.

  11. alexis Says:

    Poor FF! The bikes are nice to look at but the components and finishing is suspect and inconsistent…and I can say this from having to work on a number of them. My favourites are the Kemper designed ones with the bucket over the 20″ front wheel. I expect we will see more customers at least for repairs and mods. When I moved to A’dam 2 years ago I was considering working for De Fietsfabriek…so I’m glad I went for Workcycles.

    My suggestions Henry;
    -Get more colourful frames ordered?
    -New store in De Pijp?
    -Offer a deal on FF bikes overhauls.

    Good day!

  12. henry Says:

    Frits,
    Thanks for the explanation. When I wrote that I wasn’t so familiar with the workings of a bankruptcy I should have more specifically referred to under what conditions a firm in this situation will be allowed to continue after restructuring, and what that restructuring would entail.

    When painted in the appropriate colors the WorkCycles Fr8 bike variants overlaps nicely with a few of the Fietsfabriek bikes. A couple batches of fun ones (matte oxide red and mint green amongst others) are on the way and ordering custom colors is no problem.

    If and when it’s time for a third Amsterdam WorkCycles south will indeed be the direction of choice. I hear there might soon be a few spaces available in and around the 1e Jacob van Campenstraat ;-)

    Deals on FF bike overhauls? We considered that but their bikes are already quite labor intensive to repair and getting the message out to FF customers tactfully is a challenge. It’s a good direction but needs some development.

  13. David Wilson Says:

    Great article Henry, thanks for that! You were giving FF much the benefit of the doubt when we spoke a month or so ago. The shop in Den Haag is still open, so hopefully a transition to new ownership will happen. I also hope the US retailers and other franchisees can rebound somehow through FF or other avenues. It would be sad to lose any outlets for transport bikes in the US at this time. And I think you are correct, it’s the other worldly distractions that are the real competition.

  14. Jen Says:

    Ironically, a new store Rolling Orange) selling Fietsfabriek just opened in Brooklyn (Carroll Gardens). Lovely people; young, energetic and passionate. They said it was just the retail arm that went bankrupt –not the factory. Right now, they seem to stock cargo bikes and the Oma/Opa fiets from FF, and a couple of Batavus models. It’s a great space in a neighborhood where this style of bicycle should do very well, and they said interest has been phenomenal.

    In general, I found their bikes to be fun and stylish though my own esthetic preferences lean more in the classic, minimalist direction. It’s probably true that FF has a younger appeal…certainly if the customers in Rolling Orange this weekend were any indications! And if so, it’s great to have a line of high-quality bikes that appeal to this demographic, though I note the quality control issues referenced above.

  15. henry Says:

    Jen,
    A NY friend had passed along a link to Rolling Orange so I was aware of them. I guessed they were the dealer Fietsfabriek had talked about but wasn’t sure.

    It’s not true that only the retail part of FF is bankrupt. Actually the entire company is except for the framebuilding facility in Turkey. Unfortunately for them all of the parts were sourced and the bikes assembled in Holland so I’m not sure how much the frame shop will help them until they can buy parts and build bikes again. It only complicates matters that Michael Kemper, their bike designer, is one of the creditors to be paid from the bankruptcy and is speaking out against them. Thus they have a factory in Turkey but might not be able to sell the bikes they’re tooled up to build. Even if they do manage to restructure and continue doing business it’s going to be a steep and rough road ahead.

    I imagine Rolling Orange will (at least temporarily) fill in their line with more models from Batavus… and yes, perhaps from Workcycles too.

  16. Carlos Labraña A. Says:

    i know from peter fietsfabriek Berlin, that the guys from fietsfabriek usa order now bikes from Berlin. Peter has now own model frame is made by van Raam. 10 x better than the old quality from fietsfabriek netherlands. i know that michael kemper also deliver some fietsfabriek models direct to dealers in the netherlands. he has own production with some guys working only on transportbikes. its funny that now all fietsfabriek cargobikes are made in germany ;-)

  17. wessel berkman Says:

    stop the stories!

    De Fietsfabriek is still alive!

    We’re building and selling nice personalized (the real personalisation!!)bikes for our proud customers with good quality!!

    Come and look to the new models (so you dont have to wait till others make bad copies of it….

    questions?: mail to w.berkman@brownpapercompany.nl

    regards, the fietsfabriek team

  18. henry Says:

    Wessel,
    Good luck Fietsfabriek.

    Each year there are several more entrants into the bakfiets and unique city/transport bike market so it gets steadily more difficult for a small manufacturer such as Fietsfabriek or Workcycles to distinguish themselves.

    I just looked at your site but there you still have the familiar models. Are there new (I assume NOT Michael Kemper designed) bikes in the pipeline? Will they still be made in Turkey?

  19. wessel berkman Says:

    …well the Fietsfabriek is still alive!

    we built already more than 10.000 bakfietsen for hip parents who want to have a special bike (instead of a mass production product)

    Our specialty is customizing your dreams in a bakfiets: choose out of 38 colors and your name in steel in the frame of the bike!!!

    Look: http://www.defietsfabriek.nl for the complete collection

    Good marks stay alive!

    Welcome in the shop

    regards Wessel

  20. wessel Says:

    Henry,

    Good questions!

    80% of our bikes are personalized in colours and steel with name and logo’s. We have 12 basic modells. Who can do this?

    This is our world. We love cycles and we love clients! Communication on wheels! Our clients are smiling when they ride their bikes!

    See the new Heineken bike: http://www.flickr.com/photos/defietsfabriek/5869284582/in/set-72157627042407078

    The organisation is structured and we are working on new modells! Production take handmade place in Turky and Tjechie. Michael is helping us.
    We have 73 dealers in Holland and 8 outside.

    Look to the new childbakfiets! Who has it?http://www.flickr.com/photos/defietsfabriek/5860581489/in/set-72157626899010107

    New logostyle first impressions: http://www.flickr.com/photos/defietsfabriek/6017363948/in/set-72157627042407078

    Something new is comming in the electric segment! We are working on new designs. Come to the fietsvak in february!

    see many bikes we sold the last months: http://www.flickr.com/photos/defietsfabriek/sets/

    Youre welcome in Amsterdam noord: aanbeeldstraat 10F to see what we do! All questions are welcome: wessel@defietsfabriek.nl or 06 54 935 671

    regards Wessel

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