People who buy a big-ticket item at Cycle World of Houma usually go home with a sleek-looking vehicle that converts gasoline into fun. But lately customers have been more interested in a boxlike contraption that converts gasoline into electricity to light their homes, power their appliances. They want to safeguard their mundane comforts, not transcend them. So generators are selling; motorcycles and ATVs are not. You see, Cycle World of Houma is in storm-battered Louisiana.
"We're extremely concerned about the future of the business with respect to all this damage that has occurred, primarily from Ike," Glenn Diedrich told Dealernews Monday. He owns the dealership, which carries Honda, Kawasaki and Yamaha. The store itself lost only a small awning, but the storms did do moderate damage to a warehouse about 10 miles away.
Whereas Hurricane Ike caused the most havoc in the area, it was the earlier storm — Hurricane Gustav, which hit on Monday, Sept. 1 — that knocked out the store's power until the following Sunday. What's more, officials forbid evacuees to return until the following Friday.
"I had employees scattered from Texas to Arkansas to Mississippi to Tennessee to Alabama to Florida," Diedrich said. "They're all back now, but they were all affected in some way by the hurricane."
Cycle World of Houma usually delivers about 110 units per month, but as of Sept. 15, the dealership had sold only 10. On the other hand, although the store usually sells fewer than 10 Yamaha generators in an entire year (it doesn't carry Honda ones), it sold about 40 before Gustav and about 40 afterward.
"Yamaha helped us to get a special shipment of 50 generators after Gustav hit us," Diedrich said. "This was a tremendous help to many new customers as well as some existing ones."
To meet demand Diedrich even had a skeleton crew working during the week of official closure. But because generators retail for about $3,000 or less, the sales spike had only a so-so effect on the bottom line. "You have to sell three or four generators to make up for one regular unit," Diedrich said.
Walk-ins at Cycle World were down drastically. Diedrich thought the only immediate relief might come from scooter sales due to rising gas prices and gas shortages. But like generator sales, scooter sales do only so much for margins.
Katrina and Rita: Great for Business
Diedrich reported no major damage, but many of his neighbors weren't so lucky. The southern part of Diedrich's own parish (the state has parishes instead of counties) suffered extensive flooding. "It could have been much, much worse if we had had flooding damage," Diedrich said.
Mother Nature also spared Cycle World in 2005. "Katrina hit to the east of us, and Rita hit to west of us, and we were completely untouched," Diedrich remembered. "And our business after those hurricanes actually increased by about 20 percent. It was terrific — for us."
Why the sales increase? According to Diedrich, people who were rebuilding the oil and gas industries had extra cash for toys. Plus, work-ready ATVs make up half of Cycle World's sales.
And there were the insurance claims. "Lots of people lost their ATVs, motorcycles and dirtbikes in those storms, and they were getting money to replace them," Diedrich told us.
Will the same thing happen this time? Diedrich had no idea. He seemed to be more in the charity business when we talked. He had loaned 12 ATVs to the sheriff's department of his parish.
"We just kind of stand tall, and do what we can to get back to business as usual," he said. "But there's not going to be much that is in our control."