Erik Saltvold, founder and owner of Erik's Bike Shop Inc., is accelerating through the intersection of bicycling and power, with e-bikes.
Erik's Bikes pedals for records from expanded, solar-powered HQ
Like many bike retailers, 2020 was a spectacular year for Erik's Bikes, which has grown to 32 stores in seven states.
July 11, 2021 at 7:00PM
The company recently opened a new 110,000-square-foot headquarters and warehouse in southeast Minneapolis, twice the size of its former HQ in Bloomington.
Saltvold, 57, and a partner invested $10 million in the facility, which is topped by a 215-killowatt array of 538 solar panels. The system provides up to 70% of the building's power and a reduction in carbon dioxide equivalent to that of 6,600 acres of forest.
About 100 of Erik's 500-plus employees are based at the Kasota Avenue facility, a former Conagra snack-production facility that now boasts locker rooms, energy-efficient lighting and a host of amenities.
"The location is easily reached by mass transit and safe bike routes," said Saltvold, a lean bicyclist who makes the 40-mile round trip from his Minnetonka home a couple times a week on his e-bike.
"Many of our employees bike to work," he said. "And we thought this would be a great [flat] roof for solar. Plus, we are thrilled that, with IPS Solar, we are limiting our environmental impact."
IPS Solar is the 30-year-old "granddaddy" of Minnesota's solar industry, which is now experiencing hockey-stick growth and aims to account for 10% of the state's power generation by 2030.
Eric Pasi, an IPS veteran in charge of business development, said the solar system on the Erik's Bikes HQ is 11 times larger and far more powerful than one installed atop the Erik's Bikes store in Eden Prairie in 2015. Saltvold plans to recover the $600,000 cost in seven to nine years.
The move comes after the company experienced a huge jump in revenue to more than $70 million last year. Bike-related sales grew 60%, shaped by a surge in demand from people who were cooped up at home following the coronavirus outbreak.
"It's the ultimate social-distancing exercise," Saltvold said. "Biking boomed."
Saltvold expects another good year in 2021, but he said growth won't be as robust as last year.
"We're still seeing elevated demand but it's subsided from the craziness last year," Saltvold said. "We're seeing even more demand for e-bikes. That's a triple-digit growth rate. E-bikes are great for older people and they are a ton of fun to ride."
The National Bicycle Dealers Association reported earlier this year that bicycle-unit sales grew nearly 30% in the U.S. last year. That followed a decline in 2019 and a modest growth rate of 3% between 2014 and 2019.
"The American cycling businesses, which has been constantly under siege from tariffs, safety and aging demographics, is poised to thrive," the association's trade publication said.
Sales of e-bikes, which help riders keep a steady pace while still exerting, are leading the growth. E-bike sales already are about one-third of Erik's overall bicycles sales.
With 32 stores in seven states, Erik's is one of the country's largest independent bicycle dealers. Fifteen years ago, the company had 11 stores and about $18 million in annual sales.
The bike retail industry is still largely dominated by small, family-owned shops. The biggest corporate players are manufacturer-retailers Trek of Wisconsin and California-based Specialized.
At Erik's, you can spend a few hundred to several thousand dollars for a bike, including $5,000 for a 2020 Bianchi Aria E-Road Electric ride.
Saltvold launched Erik's in a garage that was once a small barn on farmland his parents bought in the early 1960s in Richfield. His mother drove Saltvold to downtown Minneapolis to buy bike parts.
To launch, he used $130 of the money he saved from a paper route. That still is the only paid-in capital. He has financed Erik's growth through reinvested profits and a modest amount of debt from Bremer Bank, Erik's lender of 30-plus years.
"We've been fortunate to have a lot of great people, including long-term employees," Saltvold said. "Our president, Dave Olson, started as a sales person 30 years ago."
Saltvold, a low-key leader, was a good student and hockey goalie at Richfield High. He took a special program where he studied mostly business-related courses in the morning and worked later in the day. He dropped out of the University of Minnesota after a semester, to build a bike business.
By 17, he'd leased a 1,600-square-foot retail space in a strip mall at 72nd and Chicago. He moved to Portland and I-494 for 15 years. The ever-larger Richfield store is now part of a mall on Cedar Avenue anchored by Target and Home Depot.
Saltvold plans to slowly sell some of his stake in the company to key managers who will become his partners. He said he has no plans to sell or retire.
"I still enjoy this," Saltvold said. "I feel like I've never 'worked' a day in my life at Erik's."
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