Dorel’s Cycling Side Aids Growth in 2012
MONTREAL, Canada – Dorel reported strong results for its 2012 fourth quarter and the year overall on March 5, with the company’s success in the cycling sector pegged as an important part of the equation.
“Driven by double digit growth in sales of Dorel’s premium Cannondale brand, the Recreational/Leisure segment’s full-year revenue surpassed US$900 million (€690 million),” said Martin Schwartz, Dorel’s president and CEO, in a conference call to announce the year’s earnings.
Revenue for the fourth quarter increased 10.9% to US$622.6m (€477m) from US$561.6m (€430m) a year ago. Net income was up 6.4% to US$29.1m (€22m) from US$27.4m (€21m) in 2011.
Cannondale Pro Cycling Team
“We have proven we can do a good job in the bike business and the growth trend we have established during the last couple of years clearly underlines this,” added Schwartz. He also mentioned the move to become title sponsors of the newly named ‘Cannondale Pro Cycling Team’ with key team members Peter Sagan, winner of the Green Jersey at the 2012 Tour de France, and two-time Giro d’Italia winner Ivan Basso.
Executive Vice-President and Chief Financial Officer Jeffrey Schwartz remarked that the 12% growth in the recreational category was organic, not due to price inflation. He also noted that the growth was across the board, including IBDs and mass market channels.
Double digit growth in Europe
“Our increase in sales in Europe is healthy double digits over last year. And this is expensive bikes – in an area that’s economically challenged,” said Schwartz. “But when your product is great, people will spend a lot of money on it anyway.”
Dorel’s clothing and apparel company Sugoi had been underperforming and undergoing restructuring of late. Now the technical clothing company’s fortunes are getting a boost with an official apparel deal with the Ironman triathlon series. SUGOI will also outfit the IRONMAN Executive Challenge program.
Also in the bicycle category, Jeffrey Schwartz mentioned a push by Mongoose to recapture the BMX segment. “Specifically in Recreational/Leisure we believe the success of our new product development and marketing in 2012 will continue into 2013,” commented Martin Schwartz.