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Apparel & OutdoorCentralLifestyleSustainability

Following a winding—and not terribly smooth—path

By December 2, 2014 No Comments

A passion for the outdoors has always been the driving force at Burley. But that’s about the only thing that has remained consistent.

Much has changed in the 36-year history of the Eugene, Oregon-based company, which began as a cooperative in 1978 and was bought by local businessman Michael Coughlin in 2006.

The company has long been known for its innovative child bicycle trailers, but for the majority of its existence it was known just as much for its initial organization as a worker cooperative. In this arrangement, every worker owned a single share and had a single vote in the business’ management—regardless of what his or her job was.

The wheels begin to turn

The roots of Burley were planted in the 1970s when Alan Scholz started making bike bags in his bike shop in Fargo, North Dakota, inspired by his wife Beverly Anderson, a racer also known as “Burley Bev.” The pair later moved their burgeoning business to Cottage Grove, Oregon. And as their bags became more popular, they went in search of a way to get their wares to Eugene’s Saturday Market while remaining devoted to their car-free lifestyle.

Burley transit bags in actionBut there was room for improvement.

Scholz built his first trailer using swing set parts, and soon customers were asking as much about the trailer as the bags. He went to work on a new design—one that could be attached to all types of bicycles and carry not only goods, but also children.

In 1978, the Burley Design Cooperative was established when the Scholzs partnered with their seven existing employees.

In a Fall 2010 article in Oregon Historical Quarterly, Joel Schoening writes, “Although many of the early members believed cooperatives were better than conventional businesses because they offered a meaningful voice in management and more equitable distribution of profit, they considered themselves neither a model for others nor part of some clearly defined social movement. Their primary motivation was a desire for the same quality of work life that motivates nearly everyone.”

They were also driven by the idea that the products they were making were reducing dependence on oil and having an environmental impact. Their customers—particularly in green Eugene—felt the same. And so Burley’s niche was born.

Success is a rocky road

Things worked well at the co-op for years—it went through a bit of a reorganization in the early 1980s. By 1986, however, the new plan was working, and customers noticed the attention to detail

“The quality of the products was bolstered by the fact that the members, as cyclists themselves, made regular use of the merchandise,” the Oregon Historical Quarterly said. “Firsthand experience with their own products allowed them to find and correct design flaws almost immediately.”

But popularity brings its own challenges. Staffing for growth became difficult, as did meeting demand. Burley struggled to keep up. And adding member-owners who had the skills the business needed, didn’t necessarily jibe with the co-op model. This created a conflict that, Schoening writes, in combination with a drop in sales and a national decline in the bike industry, laid the groundwork for the end of the Burley co-op.

Taking the wheel

Michael Coughlin was working in the Citizen Building in Eugene in August 2006, when he was approached by another tenant in the building, an attorney who’d been working with Burley.

“She told me they were 30 days from bankruptcy, so she asked me, ‘Would you be interested in looking at it?’ ”

Coughlin, a Eugene businessman and community leader and a lifelong Oregonian, didn’t consider the idea for too long.

“I’d known about Burley,” he says. “They were a great brand, I knew that, but I didn’t know the details. I thought, ‘Well, I think I can fix this.’ They’re a great little company to have in Eugene—and keep in Eugene.”

Just a few weeks later, in September 2006, he bought the company from the remaining member-owners of the cooperative.

“At the time, they were making tandem bikes, recumbent bikes, rainwear, cyclocross bikes, road bikes, commuter bikes, and trailers,” Coughlin says. “But their gross margin was -2 percent. I realized we couldn’t fix all that stuff, so we blew it up and focused on child trailers.”

“Members of the co-op would get a percentage of the profits, which was all good,” he says,” But they tended to pay out all the profits, so there was no money left for working capital.”

In 2001, the company posted its first loss. And by 2003, the losses got steeper.

“When they were losing money, the members of the co-op had to write back a check instead of receiving a cut of the profits, so people started abandoning ship,” Coughlin says. “It ended up being a death spiral for the company.”

The spiral, however, was far from irreversible. And through his efforts, Coughlin has managed to steer Burley in a more positive direction. But it wasn’t easy.

“First, we focused on updating the trailers,” he says. “The co-op wasn’t investing in product research.”

Changing lanes

It became clear that to save Burley, they would have to outsource manufacturing. The price discrepancy between keeping production in Oregon versus moving it elsewhere was simply too steep.

“After about three months, I realized that had to go offshore,” Coughlin says.

But the move overseas wasn’t undertaken lightly. Burley contracted with factories in China that paid fair wages, provided a safe working environment, provided time off, and used only adult laborers. The lower price-point trailers were outsourced in 2008, and the higher-price items moved in 2009.

Product development, design, and testing remain in-house in Eugene, as does quality control—but they invest in bridging the distance between operations and manufacturing. In October of 2014, quality control staff were 10 days into a visit to their factories in Asia to make sure things were as they should be. Every shipment that arrives in Eugene goes through an intensive quality control checklist, and a report card is issued each month on subjects such as responsiveness, on-time deliveries, and number of returns.

A Burley trailer goes through testing

In the Burley warehouse, the testing room is more like a torture chamber.

In one corner is a drum tester, where trailers and other products are put through their paces—the equivalent of going over a bump 10,000 times—to make sure they can withstand at least three times the safety standard required by the ASTM, according to Nick Coughlin, Burley’s Support Specialist.

Other tests include the drop test (ensuring the integrity of the child restraint system), a rollover test (checking the frame’s strength in a “worst case scenario”), a push-pull test (making sure the hitch connection will hold for more than 100,000 stop-and-go cycles), and a tip-over resistance test (certifying that the trailer has a low enough center of gravity to avoid falling).

Because of this testing—and its careful design process—Burley’s products tend to last.

Another portion of the warehouse houses older parts, for second- or third-hand Burley owners. The company believes that even a Burley trailer purchased at a garage sale should have the same level of support as a brand new one.

“If it’s fifteen years old, it’s going to be a stretch,” Michael Coughlin says. “But if it’s six to ten years old, we’ll have the part.”

This continues Burley’s environmentally friendly past, as well, since products are often passed along from one family to another.

“We’d much rather have it still being used, instead of throwing it in the dump,” Coughlin says. “It’s so fun to hear about two to three generations of kids using a trailer.”

Exploring other realms

Coughlin didn’t want to keep the company’s niche so small forever.

“Once we got our footing on trailers again, we put the pedal to the metal on product development,” he says.

Burley Travoy

One popular addition was the Travoy commuter trailer, which was recognized in 2010 with a Eurobike Gold Award. It is designed to carry smaller loads, to be used as a rolling cart when detached from the bike, and to fold up when not in use.

Next up, the company has a jogging stroller—called the Solstice—launching in 2015.

Some of the company’s child trailers convert to a stroller when removed from the bike, but product designers decided to put their many years of child-safety expertise toward this new product.

“We’ve always had customers asking about a stroller, so it’s been on our radar,” Coughlin says.

But the demand didn’t lead to immediate supply, as the stroller went through about two-and-a-half years of research and development.

The top priority—after safety, of course—was one-handed operation, since parents are routinely holding the baby for whom they are trying to unfold a stroller. It also underwent rigorous safety testing. Not just for how long the wheels and axles would hold, but also for various chemicals.

“We test for more restrictive chemicals than you would believe,” Coughlin says. “Regulatory safety is huge. And retailers know that we will do all that testing.”

The stroller is slated for an exclusive release with REI in January 2015. In May 2015, it will open up to other sellers.

Because of all the in-house design and testing, the stroller went through several versions.

“We build a prototype and test it. Then do another one and test that. Then make some changes and test that,” Coughlin says. “We don’t just design the whole thing, send it out, and then test it.”

A jogging stroller fits in with Burley’s main mission of getting people outside, which is just part of helping bike culture grow, particularly in the United States.

At this point, 40 percent of the company’s sales are international. And it’s doing especially well in Europe, with more than 15 years of selling its products there.

“In the U.K., they are building out their bike infrastructure now, which is all good for us,” Coughlin says. “But in the US, bike ridership has declined over the past 10 years. Kids’ ridership has declined 18 percent over the past 10 years.

“We just want to make a good safe product for parents to take their kids out to play and to get kids into that lifestyle,” Coughlin says. “Less kids riding bikes is not a good thing.”

Where do we explore from here?

The stroller has led Burley to an expansion into fabrics and soft goods.

“We’ve historically had a mechanical engineering focus,” Coughlin says. “But now we’re adding industrial design expertise.”

The company’s Willamette Valley location has helped grow that part of the business, he adds: “In Portland, there are so many soft goods designers, there’s a big pool of resources to tap into.”

Not to mention, the market for bike-related products remains healthy here, even if ridership is down nationwide.

“Portland is the most happening bike place in the United States—even more so than Europe,” Coughlin says.

Burley is in the process of expanding from its current building, where it’s been based for two years, into another 10,000-square-foot warehouse building in the back.

This could be the home of whatever its next venture, or adventure, is.

“We’re working on different vertical niches to fuel our growth for the next three to four years, with 20 to 30 percent growth targeted each year,” Coughlin says. “It’s a family-held business, and we can grow it at the pace we want.”

For more on Burley, visit http://www.burley.com, follow Burley on Twitter, or like Burley on Facebook.

Burley team