Paul Dickard, a spokesman for Kryptonite's parent company, Ingersoll-Rand, said Kryptonite executives were working diligently to ease customer and dealer concerns but did not expect the problem to affect earnings.

Kryptonite products account for less than 1 percent of the $10 billion in annual sales at Ingersoll-Rand, which makes other security products, such as door locks.

"It's a fairly small business, but an important business in terms of the community it serves," Dickard said.

New York City bike shop manager Ismael Torres took the flawed locks off the shelf the minute he read about the problem — though he is still selling Kryptonite's "New York" lock.

The problem could cost Kryptonite his business, he said.

"I kind of don't trust this manufacturer now," said Torres, who works for Gotham Bikes in downtown Manhattan.

Attorney Marc Weber Tobias, a security expert, said Kryptonite had technology that is pen-proof, and it should have been used in all the locks.

"God forbid they should have figured it out earlier," said Tobias, who notes the company will face claims from people who will say their bikes were stolen because of the faulty locks.

Kryptonite offers insurance policies that promise reimbursements of up to $3,000 — depending on the lock model — to replace bikes stolen while secured with one of its locks.

Megan Tompkins, managing editor of the trade publication Bicycle Retailer and Industry News, said Kryptonite must act quickly and aggressively to win back its customers

"It's absolutely critical to communicate with retailers and make sure the retailers are serving as a point person to tell consumers, 'No, Kryptonite has resolved this problem,' " she said.

The upcoming Interbike Expo, a trade show scheduled for Oct. 6-8 in Las Vegas, will bring major dealers together and give Kryptonite a quick chance to do damage control, Tompkins said.