There are few issues extra evocative of the free American spirit and the nation’s wide-open areas than the picture of a Harley-Davidson motorcycle zooming down a stretch of empty freeway. However whereas taking one in all the legendary hogs for a spin should be liberating for riders, the corporate’s unbiased dealership homeowners are feeling an more and more tight monetary and business squeeze.
A rash of studies in latest weeks have sounded alarms in regards to the troubles Harley sellers face, and the rising variety of dealerships closing store in consequence. Whereas Harley-Davidson nonetheless counts greater than 650 of these places in operation throughout the U.S., specialist automotive media warn that these numbers have been considerably reducing as gross sales of the beefy bikes decline, and supplier working prices develop.
“I hate to confess this, however there are too many dealers for the variety of new automobiles which might be being bought in the present day,” second-generation Harley dealership proprietor George Gatto instructed the bike publication RevZilla. “Margins on the brand new bikes are the worst we’ve ever seen . . . They’re not making any cash.”
Consequently, homeowners of a rising variety of Harley-Davidson dealerships have hung the “Closed” signal for good. These embrace some well-known, high-profile shops in New York Metropolis and Florida, and the century-old Dudley Perkins location in San Francisco. However studies say many extra closures in smaller cities and cities throughout the U.S. drew far much less consideration whereas including to the tally of shuttered companies.
That flip of occasions marks a swift reversal of Harley-Davidson’s fortunes, and now leaves many unbiased sellers and the mom firm itself combating for survival.
As was the case with many firms promoting comparatively costly items, the results of COVID-19 created a gross sales growth for Harley-Davidson and its sellers. Authorities stimulus checks and rock-bottom rates of interest allowed some customers who’d by no means had the cash to afford a hog to purchase one after 2020. Extra conservative customers who’d had the funds however waited additionally took the plunge.
In the meantime, as occurred within the auto sector, disrupted provide chains restricted Harley inventories, permitting sellers to cost prime greenback to prospects they added to more and more lengthy ready lists. Enterprise had by no means been so good.
Flush with rising income, many dealership homeowners splurged on upgrades and expansions of their showrooms. Those that didn’t have been ultimately obliged to take action by Harley-Davidson company insurance policies that require sellers to abide by centralized guidelines, and undertake selections made by the mothership.
However as soon as these dealership enchancment investments have been made—driving occupation, warmth, and upkeep prices increased in consequence—the gross sales growth petered out. Shoppers dealing with spiking inflation, rising rates of interest, tightening job markets, and different hardening realities of post-pandemic life may not give $24,000 to $40,000 Harleys one other thought.
However on the similar time, bikes churned out by producers in search of to meet up with demand continued flowing into showrooms, additional boosting supplier stock prices. The identical was true of Harley-Davidson-branded bike tools.
Whilst that gear gushed into dealerships, Harley-Davidson company managers continued growing their booming e-commerce platform, which reduce out intermediaries like sellers by promoting on to customers.
“They overproduced, so what do they do?” Gatto stated of the converging developments that price sellers dearly. “They mark it down 40%, 50%, 60% on-line, with free delivery. Why would you go right into a dealership once you’re getting half off on-line?”
In accordance with the latest studies, Harley-Davidson’s company management—now led by new CEO Artie Starrs, who took over in October—responded to the downturn by shrinking the checklist of centralized guidelines sellers should observe. The corporate decreased different necessities, together with minimal stock volumes, to assist ease monetary strain on dealership homeowners.
Whereas which will ease among the ache, the worry is that regularly falling demand might show the much more harmful menace. The COVID-era growth apart, Harley-Davidson’s unit gross sales have dropped by 45% over the previous decade. That was once more mirrored within the firm’s third quarter 2025 outcomes, which reported a worldwide gross sales decline of 6%—5% within the U.S.
These latter figures led Morningstar analyst Jaime Katz to warn that it’s going to take loads of work, and a long-lasting return of sturdy gross sales, for Harley-Davidson and its unbiased sellers to start out driving simple once more.
“There may be little proof {that a} restoration for bike demand is within the playing cards anytime quickly,” Katz wrote in an traders’ memo following third-quarter outcomes. “After a number of years of stock reduction at dealers, the agency has but to search out equilibrium and has signaled additional unit reductions to guard supplier profitability.”
—By Bruce Crumley
This text originally appeared on Quick Firm’s sister website, Inc.com.
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