Dorel Industries Inc. unexpectedly announced it had replaced the president and CEO of its nearly $1 billion bicycle business last week and launched a search to find his permanent replacement.
In a terse statement issued December 18, the Montreal-based consumer products conglomerate disclosed “the departure” of Robert P. Baird, group president and CEO of its Recreational/Leisure segment, which owns the Cannondale, Schwinn, GT, Mongoose, Caloi and IronHorse bicycle brands and makes Sugoi and Cannondale cycling apparel and footwear. The press release offered no explanation for Baird’s sudden departure. Dorel appointed Peter Woods, the segment's CFO, as interim president, effective immediately.
“We are now initiating a search for Bob's successor,” said Martin Schwartz, Dorel president and CEO. “We thank Bob for his service with Dorel and wish him well in the future. Our recreational business has become a billion-dollar operation. We have an excellent team in place throughout the organization as well as brands that are highly respected by both dealers and consumers.”
Baird joined Dorel in 2005 as a member of the company’s board of Directors. In 2008, he was put in charge of the Recreational/Leisure segment. Previously, Baird had served in senior executive positions in the U.S. at Philips Electronics. He also has extensive experience in the consumer goods Industry across multiple companies including Samsonite, Scott Paper, Bristol Myers and Procter & Gamble.
The Recreational/Leisure segment outperformed Dorel’s other two segments ready-to-assemble furniture and juvenile products from 2008 through 2012, when Cannondale’s gains in the much larger European market helped push revenues to $928 million, or 37 percent of Dorel’s revenues. Toward the end of 2012, Dorel announced it would move the headquarters for the business from Cannondale’s old location in Bethel, CT, to a larger space in Wilton. About the same time, Schwartz was happy to announce that Cannondale would sponsor its own pro cycling team starting in 2013.
The segment’s holdings are broad, complex and sometimes confusing. Its Pacific Cycle Group (PCG) sells Schwinn and Mongoose bicycles to mass merchants like Walmart Stores Inc. and Costco Wholesale Corp. and Roadmaster and Iron Horse bikes to sporting goods chains. PCG also sells Schwinn and InStep jogging strollers, bicycle trailers and motorized scooters.
Cycling Sports Group (CSG), meanwhile, focuses on selling Cannondale and GT bikes to independent bicycle dealers, or IBDs, and its Apparel Footwear Group (AFG) makes Cannondale products under the Cannondale and Sugoi brands.
Adding to the confusion since last year has been an apparent disagreement over what to call the business. While Dorel's corporate office in Montreal has consistently referred to the combined business as its Recreational/Leisure segment for financial reporting purposes, press releases issued from Connecticut have referred to it as “Cannondale Sports Unlimited” since late 2012.
All three of the businesses are supported by a sourcing office in Taiwan and sales and distribution companies in Australia, Japan and China. Dorel Recreational/Leisure even owns and operates 70 retail stores in Chile and Peru and in early 2013 announced that CSG had acquired a controlling stake in Brazil’s largest bicycle manufacturer and retailer – Calois.
Dorel Recreational/Leisure’s performance, and that of much of the global cycling industry, deteriorated this year when an unseasonably cold and wet spring in North America and Europe slowed sales of new bikes.
In November, Dorel reported the segment's sales for the first nine months of 2013 had declined by 4.0 percent, or by $28.5 million, as mass merchants delayed deliveries of holiday inventory until October and IBDs continued to work through inventory left over from spring. The company said it expected IBDs to postpone orders for its Spring 2014 models until next year, indicating that segment sales will likely decline for the first time since the end of the Great Recession.
