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Dorel’s 2006 Focus: Higher Margin Products, Low Cost Production

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MONTREAL, Canada – Dorel Industries Inc. told shareholders attending today’s annual general meeting all efforts are on ensuring that operations company-wide are running smoothly and are contributing to profitability. Stating that there have been positive developments as well as some challenges over the past year, President and CEO, Martin Schwartz, detailed what is being done in each division to maximize output and introduce higher price point products. “RTA in particular has needed and received considerable attention. We have been disappointed with our returns in this segment for some time and are working aggressively to turn things around.”

Dorel’s 2006 Focus: Higher Margin Products, Low Cost Production

MONTREAL, Canada – Dorel Industries Inc. told shareholders attending today’s annual general meeting all efforts are on ensuring that operations company-wide are running smoothly and are contributing to profitability. Stating that there have been positive developments as well as some challenges over the past year, President and CEO, Martin Schwartz, detailed what is being done in each division to maximize output and introduce higher price point products. "RTA in particular has needed and received considerable attention. We have been disappointed with our returns in this segment for some time and are working aggressively to turn things around."
 
Mr. Schwartz said that while Pacific Cycle continues to sell more bicycles than any other US bicycle company, the North American bicycle market has been steady with little change to the 17 to 18 million units sold annually. Pacific is now seeking to generate additional dollars, focused on the mid to high price point categories. With the leading mass merchant market share, Pacific tops the industry both in dollars generated, at 25%, and units sold-30%. The Schwinn brand is as strong as ever, with GT and Mongoose close behind.
 
Pacific launched a line of gas-powered motor scooters in 2005. There were 38 dealers selling the units in February, and since they received their EPA certification earlier this Spring, there are now over 120 dealers. At an annual rate of 20%, the motor scooter market is the fastest growing in the motorcycle segment. With higher gasoline prices prompting many to be more energy conscious, scooters are likely to become even more popular. Pacific also entered the metal swing set business, under the Playsafe brand. A full line of back yard recreation products, such as trampolines and soccer nets, is also planned.
 
"While the bike industry is not an easy one, we are confident that we have the products, the brands, the relationships and a clear strategy to outperform the market. We remain pleased with the 2004 Pacific Cycle acquisition as it is the foundation on which to build a much larger recreation business. We are looking into a number of new lines, including electric products to capitalize on the emerging trend in personal transportation which will utilize a new technology incorporating light weight batteries," stated Mr. Schwartz.

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