JAPANESE USED BIKE DEALER GOES PUBLIC
June 21 2005.
IK Co., a dealer of secondhand motorcycles, plans to go public on the Jasdaq Securities Exchange on June 30.
IK buys used motorbikes through its nationwide network of 35 "Bike-Oh" outlets specializing in purchasing and sales through auction companies.
Dealers and repair shops usually buy used bikes as part of the normal course of business, but IK sends personnel from local outlets to sellers to inspect their machines and determine the proper purchase price.
An assessor examines some 30 items, such as the bike's frame, exterior body and engine, and inputs the inspection data into a notebook personal computer with a program developed by IK that shows typical auction prices for bikes of that type and model year. If the seller accepts the offer, the assessor buys the bike on the spot in cash.
In the year ended August 2004, IK bought more than 66,000 bikes, taking an average of 7.8 days to sell each one. The company is trying to cut storage costs by selling bikes faster, while raising purchase prices to increase the volume it handles.
Gulliver International Co., a leading used car dealer, is "Our benchmark for management," said IK President Yoshihiro Kato.
IK incurred a sharp drop in profit for the year through last August because it began to advertise on television to enhance its name recognition. In addition, the company promoted a shift from storage-oriented outlets to roadside dealerships and greatly upgraded its computer system.
For the current business year, IK expects a parent-only profit of 526 million yen, up 6.1 times over the previous year due to the end of certain spending programs. Sales are projected to rise 21% to 11.7 billion yen.
IK plans to open seven Bike-Oh outlets and some 10 smaller urban units in the next business year through August 2006.
The company will use the proceeds from the initial public offering to set up new outlets and purchase bikes. In September, it will open a directly managed sales dealership to reduce reliance on auction companies for sales.
Kato, 34, said IK aims to continue expanding its pretax profit by 20% per year and pass benefits on to shareholders by boosting its stock price.

Source: The Nikkei Financial Daily.