Dorel Cuts Jobs Due to Disappointing Bike Sales
MONTREAL, Canada – The continued poor weather across the U.S., Canada and Europe has led to lower than expected sales volumes, particularly in the independent bicycle dealer channel. As a result Dorel Industries stated that second quarter earnings in its bicycle division will be weaker than anticipated.
According to Dorel Industries which markets brands likes Cannondale, Schwinn and GT this situation gets even worse due to widespread discounting by competitors in the bicycle industry. As a result of the disappointing first half, full year earnings in bicycles will not, as previously indicated, exceed 2012 levels.
“Issues beyond our control”
Dorel has initiated significant cost reductions across the bicycle division. This includes a headcount reduction of some 50 positions worldwide, roughly 5% of the segment’s workforce. “These issues in bicycles are mainly related to matters beyond our control. Our bicycle products are proven and our brands remain very strong. Cannondale continues to attract both excitement and highly positive comments,” stated Dorel President and CEO, Martin Schwartz.
“The reality is that we are now into mid-June and the weather has not improved sufficiently which means that we will be unable to make up the accumulated year-to-date sales shortfall. With the cost reductions being implemented, we are optimistic that bicycle earnings in the second half will increase double digit over last year.”