Accell Group N.V. reported its North American revenues declined 9 percent in 2014, as its decision to halt Raleigh sales to mass merchants and integrate its parts and distribution businesses hurt sales.
Accell Group N.V. reported its North American sales fell to €117 million, while sales grew 15 percent in its native Netherlands, 9 percent in Germany, 13 percent in the rest of Europe and declined 11 percent in the rest of the world.
The Dutch company said it was able to grow North American revenues at its Bicycle segment 4 percent because sales to multi-sport retailers grew, while sales to independent bicycle dealers, or IBDs, lagged expectations and declined.
North American sales of electric bikes saw only a modest increase despite a major push by Accell's Haibike, Lapierre and Raleigh brands at the Sea Otter Classic in April, 2014.
Accell's global bicycle sales increased 5 percent to €658.1 million ($875 mm) in 2014, compared with €626.0 million in 2013. Organic sales, or sales excluding divesting and acquired businesses, grew 10 percent with the largest increase coming in its home market of the Netherlands (+12 percent). Sales of electric bikes grew 23 percent and accounted for 41 percent of Accell Group’s overall Bicycle sales compared with 35 percent a year earlier.
Global sales of sports bikes declined 6 percent, due to the decision to halt sales of Raleigh bicycles to mass retailers in the United States. Sales of traditional bikes remained stable. The number of bicycles sold amounted to 1,725,000, down 6 percent from 1,835,000 in 2013.
Operating income at the Bicycle segment increased 16 percent to €46.0 million ($61 mm).
Parts & Accessories
Turnover in the Parts & Accessories (P&A) segment rose by 5 percent to €211.5 million ($281 mm), compared with €201.5 million in 2013, with most the growth derived from Accell Group’s XLC brand, where sales grew 17 percent.
In North America, turnover in parts & accessories dropped by 40 percent. The market declined slightly and a larger number of parts suppliers are now distributing their products directly to dealers. The integration of SBS (Seattle Bike Supply) and Raleigh by Accell North America also led to delivery problems and has not yet resulted in the improvements envisioned.
Total group sales grew 4 percent to €882.4 million ($1.12 bn) or 8 percent organically. Currency exchange effects had a negative impact of €7.6 million in 2014, mainly due to currency translation effects of the Turkish Lira. Net profit for the 2014 financial year came in at €26.1 million ($35 mm), up 37.4 percent from €19.0 million in 2013.
Accell ended the year with inventories valued at €244.5 million ($325 mm) compared with €251.2 million a year earlier. The number of bicycles in stock was significantly lower than at the end of 2013 due to the optimization of the logistics planning. The average cost price of bicycles increased due to a larger share of electric bikes.