The bicycle industry is facing a steep uphill climb as it struggles to bring in new customers amid lagging interest.

Cycling shop Banker Supply Co., however, is betting Los Angeles can serve as ground zero for the industry’s resurgence, thanks to a business model that seeks to bring a greater number of women and minorities into the fold.

As part of that effort, the company moved its headquarters to Echo Park from Pittsburgh and opened its second U.S. store in the neighborhood – an expansive 2,000-square-foot space – last month.

Nick Drombosky, Banker’s founder, said he decided to launch the store after learning valuable lessons from his first venture, Pittsburgh’s Fiks:Reflective, a bike accessories company he still owns and operates. While it was relatively easy to pick up international distribution for his products, Drombosky said, the company had major problems getting its products onto U.S. shelves thanks to authorized dealer agreements that sometimes force shops to carry 85 percent of their products from a single supplier.

“There’s 4,200 independent bike shops, and I could only get my product into, like, 16,” he said.

Jay Townley, a partner at Lyndon Station, Wis., consulting firm Gluskin Townley Group, which works with bicycle companies, said the issue has become so problematic that he often tells clients not to carry major brands, which typically require authorized dealer agreements.

“It is one of the major problems that bike shops have that the industry has not up to this point seen fit to do anything about,” Townley said. “What we advise bike shops to do is get out from under this whole economic model – get rid of the big brands so they can’t pressure you or you do locally made bikes.”

Banker launched its business two years ago using that model, which means shoppers won’t find major brands such as Trek Bicycle Corp., Giant Manufacturing Co., and Specialized Bicycle Components Inc. at its stores.

Drombosky, 29, acknowledged it was a risk not to carry major labels but said the strategy has been working so far.

“We had one weekend where 24 customers traveled over 100 miles,” he said. “If our (1,000-square-foot) Pittsburgh store could pull people from D.C. and Cleveland … it says a lot about the industry.”

But Banker, and other small retailers, have a long way to go.

Flat tires

Bicycle ridership among U.S. adults has remained flat since 1995, according to a recent study by the National Sporting Goods Association.

Townley said stagnant ridership has been partly caused by retailers pushing pricey racing bikes the average rider doesn’t need.

“(Lance Armstrong) made his first win in 1998 and by 2000 the whole mind-set of the bike racer was established,” he said. “So, the shop business did really well from the standpoint of increased pricing.”

While interest in bike racing took off for a time, the culture wasn’t particularly welcoming to women and minorities, said Matt Powell, a sports industry analyst with New York research firm NPD Group Inc.

“Shops are learning they need to be more inclusive and bring more people into the activity,” said Powell, who added that problems increased for the industry once the sport’s popularity died down.

“The preference of the consumer to something they could ride to work (or) light recreation has really turned the industry upside down,” he explained.

Launched by Drombosky, he came up with the idea for Banker after a few drinks one night with friends as they discussed the state of the industry.

“It was one of those drunken ideas with your friends where you’re all sitting around thinking, Man, it would be really cool if we did this,” Drombosky said, who brought in Julius Brenninkmeijer as a co-owner.

He took $10,000 – all of it credit card debt – and launched the Pittsburgh store in 2014. He did most of the renovations himself to keep costs down. After two months in business, Banker hit $15,000 in sales, Drombosky said. He declined to state current financial figures, but described the company is profitable.

However, while the shop was performing well, Drombosky, who was born in South Korea and raised in Pittsburgh, said he wasn’t happy in his hometown.

“It’s a place that I have been called a ‘chink’ probably at least once a month in an aggressive way,” he said. “Personally, I needed refuge.”

At the same time, he and Brenninkmeijer decided that they needed to launch their next store in a much bigger city in order to prove their concept worked. New York was an option, but Drombosky said he looked at ridership data across the country and Los Angeles stuck out.

“The bike market here and cyclists are very diverse compared to everyone else in the U.S.,” he said. “The amount of young Latino men and women riding bikes is remarkable, and I’m not sure the industry has recognized (Los Angeles) is a huge market. For the most part, you talk to people in the bike industry and they’re, like, L.A.? Why L.A.?”

Drombosky is hoping to build on the progress made at Banker’s Pittsburgh store, where 70 percent of sales come from women, a huge increase over the roughly 15 percent figure nationally, according to Townley.

“He’s doing well above the national average for bike shops, who tend to cater to upper-income white males,” he said.

Banker doesn’t approach cycling as a sport and does not carry mountain or road bikes, Drombosky said. Smaller brands such as Brooklyn Bicycle Co. and State Bicycle Co. share space with accessories and apparel from brands including Mission Workshop, Levi Strauss & Co., and Cadence.

The idea is to give consumers affordable bikes priced under $1,000 with low maintenance costs. As part of its unconventional approach, Banker also eschews the traditional bike-rack display in favor of a platform made of plywood and drywall that allows shoppers to easily view bikes.

“Some people think (the store) is pretentious,” he said. “But you realize we’re less pretentious than the average bike shop and that’s definitely contributed to what’s going well – talking to people. Who would have thought?”