Sting-Ray Stings Back at Dorel

TORONTO, Canada (Sep 22) – Dropping sales of the Sting-Ray combined with a slump in the ready-to-assemble furniture business undermines the near-term profit outlook of Dorel Industries Inc. This year's sales of the chopper-style bike by Dorel's US Schwinn unit will not match the "unprecedented record levels" of 2004, Jeffrey Schwartz, chief financial officer of the consumer-products maker, said Wednesday. His presentation followed disclosure last Monday that Dorel is closing its Ameriwood subsidiary's ready-to-assemble furniture plant in Missouri and that after-tax profits will decline this year amid further weakness in furniture sales at some mass-merchant outlets. The Sting-Ray was a major success for Dorel last year - "It was in fact a home run and retailers couldn't get enough," Schwartz told an investor conference. "Today, retail sales continue to be above average compared to other bicycles however, the retailers' exuberance last year created significant inventory hangover, so our sales have slowed significantly in 2005." There are high hopes for Schwinn-branded motor scooters sold by Dorel's Pacific Cycle business, acquired for US$ 310 million early last year, which sells more bicycles than any other US maker.