Accell Group decision to stop selling Raleigh bikes to mass merchants in North America cost it millions of dollars in the six months ended June 30.


 

While unfavorable east coast weather and exchange rates hurt sales, the Dutch company attributed a €11 million, or 14.4 percent,  drop  in North American sales during the period largely to Raleigh’s new channel strategy. Accell reported sales reached €65 million ($89 mm) in North America during the period, when Accell was winding up a major restructuring following its 2012 acquisition of Raleigh Cycle Ltd.

 

The impact of the new distribution strategy was apparently compounded when independent bicycle dealers cut back orders from Raleigh and other brands when winter spilled over into April along much of the eastern seaboard. North American sales of Diamondback bicycles increased thanks to growing orders from multi-sports retailers such as Dick’s Sporting Goods and Sports Authority. Sales in parts and accessories, meanwhile, dropped as harsh weather reduced cycling participation and a distribution agreement with Shimano ended.

 

On a global basis, Accell’s bicycle, parts & accessories (BP&A) sales came in flat at €497.4 million as rising sales of e-bikes and a higher proportion of high-end sports bikes offset declining unit sales of traditional bikes. Unit sales of bikes declined 8.9 percent, or by nearly 80,000, in unit terms and 6.0 percent on an organic basis, which is to say excluding brands and businesses divested during the period. Average selling price (ASP), however, grew 10 percent (12 percent organically) to approximately $520 thanks to the higher mix of high-end bikes. This resulted in the BP&A segment generating a profit off €45.4 million, up 5.1 percent from the first half of 2013.

 

Sales of electric bikes increased 14 percent thanks to continuing strong growth in the Netherlands and Germany and the launch of electric bikes in the United Kingdom, Italy, France and the United States, where the French brand Lapierre and the German brand Haibike began selling e-bikes for the first time.

 

Global sales of sports bikes, meanwhile, declined 14 percent, due primarily to Accell’s decision to sell its Hercules brand in Germany and the changes at Raleigh. Accell did not disclose the change in organic sales for North America, but said it expects organic sales of bicycles to continue growing worldwide in the second half of the year.