Tough times force Accell to make US management & distribution changes

Haibike and Raleigh owner Accell said it has "readjusted" its US operation thanks to the "overall tough market for bicycles". According to a company statement the Dutch group is to focus on its own and third-party online sales, and sales via multi-sport chains will be reduced.

"Next to an overall tough market for bicycles, sales via the traditional distribution channels (dealers and MultiSport) have been under pressure for a longer period of time in North America," said the statement.

"As such, we also recently saw an unanticipated contract termination by a large MultiSport chain." This refers to Dick’s Sporting Goods switching to Schwinn instead of Diamondback.

Accell’s statement added that "online sales (via own webshops and third party online stores) and sales of e-bikes are growing fast. In addition, the related cooperation with Beeline for home deliveries, ready-to-ride bike assembly and service is doing well."

However, these "positive developments cannot yet fully compensate for the lower sales in general," continued the statement adding that the group will be "further adjusting our American organisation."

Senior management has been replaced, said the statement, and the "activities in North America will be fully integrated."

Inventories destined primarily for the MultiSport chains will be scaled down as quickly as possible, said Accell chairman Ton Anbeek.

“During the past year, a lot of hard and goal-oriented work has gone into the execution of our new strategy in North America and Europe," said Anbeek.

"In the years to come, we expect to show a clear trend reversal of our group performance in terms of turnover, results and working capital. In North America we see sound opportunities for omnichannel, while the evolution of the e-bike segment is running a few years behind the e-bike segment in Europe. As such, the region offers us clear potential for future growth.”

Accell expects group turnover in the second half of the year to exceed that recorded in the second half of 2016. "However, the underlying operating result for 2017 will be affected by the strong sales decline in North America," said a company statement.

"The restructuring of the American organisation and the scale-down of inventories will have an impact of around EUR 5 million. As a result of the above, the underlying operating result for the full year will be lower than in 2016. The operating result (before interest and taxes) for 2017 will in addition be influenced by higher costs in the second half of the year related to the implementation of the new group strategy. We do not anticipate to fully complete the reduction of inventories in North America during the remainder of 2017, which will have a negative effect on working capital at year-end."

Accell-owned brands include Haibike, Winora, Batavus, Sparta, Koga, Lapierre, Ghost, Raleigh and Diamondback.

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