The wave of new London bike shops

Businesses fail (or just close) all the time. Most new businesses fail. If the closure of one example business means the basic concept doesn't work, restaurants are clearly a bad idea doomed to extinction.

I'd imagine that Sigma or Mosquito have more in common with Bike Room that that lot, and I know at least Velorution isn't exactly a poster-boy for economic viability :)

The examples I cited are more leisure bikes than hardcore roadie but still, overpriced and aiming at the well-heeled. As for Velorution's busines model, it can take several years to turn a viable business into a profitable one. Smart money knows that.