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Harley-Davidson Is Losing Its Cool

The iconic brand of conservative boomers is suffering as bike and merchandise sales fall. Now layoffs are planned.
Ron Dallin sits on a Harley Davidson motorocycle at the Timpanagos Harley-Davidson showroom in Lindon, Utah, U.S., on Wednesday, July 15, 2009. Harley-Davidson Inc., the biggest U.S. motorcycle maker, said second-quarter profit fell 91 percent and it is cutting output and another 1,000 jobs as the recession curbs sales.

Harley-Davidson’s motorcycle unit is skidding dangerously, but its teddy bear business has already crashed. 

On Tuesday morning, the company posted a quarterly update that was dismal all around. Perhaps most alarming, however, was a 17 percent drop in revenue from general merchandise, a sales slump that outpaced declines in dollars derived from bikes, parts, and financing. Souvenir sales were even worse in the first quarter when it recorded a 21 percent drop in merch revenue. The company that rides on the strength of its brand appears to be moving far less apparel, jewelry, and do-rags than it has in the past.