Accell Group N.V. reported its North American bikes sales grew 4 percent in 2014 as sales to multi-sports retailers like REI more than offset a decline in sales to mass marketers and independent bicycle dealer channel, where sales lagged expectations and declined.
The company reported total North American sales, including its Parts And Accessories and Fitness segments, fell 9 percent to €117 million ($155 mm), compared to increases of 15 percent in its native Netherlands, 9 percent in Germany, 13 percent in the rest of Europe and an 11 percent in other countries.
“North America was the only region in which turnover and profit lagged expectations,” said René Takens, chairman of Accell Group.
The decline reflected Accell's decision to stop selling Raleigh bicycles to mass retailers in the United States as well as delivery problems resulting from the integration of SBS (Seattle Bike Supply) and Raleigh, which “has not yet resulted in the envisioned improvements.”
The report comes as Accell expanded its partnership with REI (Recreational Equipment Inc.), which has added Accell's Raleigh and Diamondback bikes in recent years as well as the IZIP and eFLOW e-bikes made by U.S. subsidiary Currie Technologies Inc. Last month, REI began selling Ghost mountain bikes, which are made by an Accell-owned company in Germany. The deal marked the first time REI became the exclusive U.S. distributor for a bicycle brand, the first time it has offered bikes over the $3,000 price point and the first time it has carried an outside bike brand at all its stores. The only other bike band REI carries at all 137 of its retail locations is Novara, it's in-house brand.
Accell reported modest sales of its e-bike sales in North America last year, despite a major launch at the Sea Otter Classic in April that featured e-bikes from its German Haibike and French LaPierre brands. Accell's Raleigh brand has also since launched e-bikes in the U.S. market.
To alleviate independent bike dealers skepticism of e-bikes, Accell North America tasked Currie Technologies to establish an Electric Bicycle Competence Center at its Simi Valley, CA headquarters. Bosch eBike Systems, which supplies electric drives used on several Haibike, Lapierre and Raleigh models, established an office in California, exhibited at Interbike for the first time and hired Magura Direct to service its drives in the United States.
The effort helped Haibike win the E-Bike of the Year Award at the Interbike international bicycle trade fair, but Accell reported last week that “Turnover from electric bikes only saw a modest increase, because the market for electric bikes in North America remains fairly small. “
Accell Group, which is the largest bike seller in Europe, reported total net sales grew 4 percent to € 882.4 million ($1.2 bn) last year compared with € 849.0 million in 2013, driven largely by higher electric bike sales in Europe. Operating income excluding exceptional items came in at €44.3 million ($59 mm), compared with € 36.9 million in 2013. Net profit reached € 26.1 million ($35 mm), up 37 percent.
Accell said sales by its entire Bicycle segment increased 5 percent to € 658.1 million ($875 mm)in 2014 (2013: € 626.0 million). Organic sales grew 10 percent with the largest increase coming in its home market of the Netherlands (+12 percent). Sales of electric bikes grew 23 percent higher and accounted for 41 percent (2013: 35 percent) of Accell Group’s overall turnover in the bicycle segment.
The number of bicycles sold amounted to 1,725,000 (2013: 1,835,000). Operating income at the Bicycle segment increased 16 percent to € 46.0 million.